Heading into the next season, Golden State Warriors’ star Stephen Curry is going to have the biggest contract, with $43 million. He is already ahead of Thunder’s Chris Paul and Rockets’ Russell Westbrook. But this amount could drop significantly. How?
The coronavirus pandemic led to the suspension of the NBA season back in March. When the season resumed, it was continued in the Orlando bubble without any fans. And as it stands, next season could be a continuation of this no-fans basketball. So this will lead to huge losses, and inevitably player contracts will take a hit.
Currently, the escrow rate is at 10%. It is the percentage of the salary that the NBA holds back. Depending upon how the season goes, the players can get it back (in case there are huge profits) or it all goes back to the owners (in case there are huge losses).
So with the NBA projected to have losses for the second season in a row, this escrow amount is predicted to grow to 40%. In April, ESPN had reported that it could be around 25%, but it looks to be much worse.
Stephen Curry can manage, but the newer players are hit the worst
If the 40% escrow is carried out, Curry’s $43 million contract will be a $25 million contract. Similarly, Nets’ Spencer Dinwiddie will go from earning $11 million to $4 million. Finally, Celtics rookie Carsen Edwards would go from $1.5 million to around $900k.
After this escrow comes in all the other taxes and agent fees, which could leave the players with barely 30-40% of their original contract money. As former NBA champion Paul Pierce and ESPN’s Amin Elhassan pointed out, a player like Edwards could go from earning $1.5 million to around $300k after taxes and fees.
So players who have just entered the league or are on smaller contracts will be hit the worst. The established players have money coming in from other deals and also have their garnered income from over the years. But the newer players don’t have that.
While an amount like $300k is still a lot more than what an average American earns, it is still a huge hit for those players who have worked their way up to the league.
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