Name: Discussing how escrow could impact players in the 2020-21 NBA season | The Jump
Uploaded: 2020-10-31T19:02:16.000Z
Duration: 6 min 53 s
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The imperative

Let's talk about some money, money, money because people don't normally pay attention to this right.

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But the MBA usually actually holds onto a percentage of each players salary.

Past simple

A and the Players union is that however much total revenue the league makes in a given year, the owners and players split it.

It's about 50 50 except when you do a guy's contract in advance.

You don't know for sure what the revenue is going to be like every year of the next few years, right?

So the league usually holds back about 10% of each guy's salary in escrow.

And then at the end of the season, if the league made more money than expected in that 50 50 split is actually higher.

If revenues fall short summer, all of that money goes back to the owners.

That way they have to chase players down and be like Oh, actually yield 20 bucks, right?

Well, the contracts players have signed were not designed with coronavirus in mind, right?

We've been going on to maybe a second season without ticket sale revenues.

So if next season has to begin without fans holding back 10% not going to do it, that s grown number the league could put out it could be a high as 40% of guys salaries.

So it took three guys that, like different salary levels, right?

Steph Curry will be the highest paid player next season.

But in this scenario, they're taking away 40%.

That is a $17 million haircut that he would be taking.

A mid range player like Spencer Dinwiddie drops from making $11.5 million to $6.8 million and a second round pick like let's say, Carson Edwards would see his salary drop.

He thought he was making a billion and a half.

Keep in mind, players still, after they get that money, they have thio taxes, right, calculus, uh, high, right?

Um, you've also got agent percentages, things like that.

And look No one is crying for these guys, Paul.

They're all making way more than the average American.

That Steph Curry number is still very, very high, but it's still if you're a player and you think you're making X million dollars 40% rip those projections.

Call your financial advisor now and say Rip those projections up.

You could say, OK, Curry, he's making 43 25.

That's not so bad is pretty good, but the guys at the bottom are gonna feel it the most.

You see, like a Carson Networks who goes from 1.5 900.

Then you cut the 900 half attack the agency.

Its really hurt the players at the bottom, you know?

And it doesn't just hurt them because they make less Steph Curry.

LeBron Kevin Durant thes guys, we're fine.

We kind of talked about this remember when they were talking about?

And it's not about the Stars, because they have the wherewithal to say, I don't need to play.

But guys like Carson Edwards guys like Jevon Carter in Phoenix.

Thes guys haven't made generational wealth, and so this is It's a hit in their pocket.

The other thing, I wanna point out, everyone always says, Oh, but the people play in Florida, Texas.

Yes and no, because what a lot of states have done is if you play a game here, for instance, were playing the Lakers tonight.

Even if I live in Florida or Texas State with no state income tax majority, it's it's They tax you per day, so it's a 103 165th percentage of your income.

It is still way, way better than the average American is their position.

They're in I will just say if you are a guy who thought you were making a million and a half dollars and then after the escrow hit, it is gonna be $900,000.

And after the tax hit, as you say, Paul is gonna be about 4.

50 and then your agent takes a bite on all that stuff.

You thought you were making a million and a half dollars and you're making around 3 54 $100,000.

And I don't know how much guys have planned for that.

It is part of what all Americans are dealing with, obviously, on a much, much more serious scale with coronavirus and they wave of unemployment we've had.

And this is why there is so much back and forth right now between the owners and the players over when's the start date?

Because more money would come in if they started earlier.

How many games we're gonna play things like that because the salaries air really being affected and really quick that 40% isn't a number that they pulled from the sky.

It's supposed to be representative of the loss of in arena revenue, which MBA estimates anywhere from 35 to 40% of all the be.

I think a lot of things as the players sit here, Paul, and decide when they really want to start.

If you see some of this money, the dollar signs going out the door, it might affect you.

It also might affect whether you decide to opt in or not opt in this season here, some notable players again.

This is the salary they are supposed to get if they opt in.

But take 40% off of that Gordon Hayward number, right?

Do you think that it will effect if guys opt in or not?

Well, I think you wanna often, because something's better than nothing, right?

I mean, you know, especially with the days that were in, you know, teams are gonna offer shorter contracts, less money, so it's best Oh, opt in.

But the other thing is what the n b a could do.

You know, they could wait later in January, favor to see if they could get fans back in the arenas, and it affect that number a little bit different.

You know which direction that the leaders heading in.

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Discussing how escrow could impact players in the 2020-21 NBA season | The Jump

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