Contract Incentives of NBA Players

[bdm860]

Thought this was an interesting article:
http://www.nj.com/nets/index.ssf/2009/07/nj_nets_incentives.html

It talks about the different contract incentives of some NBA players, and good it's good for a few chuckles too.

Baron Davis, for example, gets $1 million just for playing 70 games and leading his team to victory in at least 30 of them.

Really, what's better than going 30-50, and then watching Donald Sterling's head explode by forcing him to hand over an extra million as a reward for this grand achievement?

But here's one example of an oddball incentive: Matt Bonner of the Spurs gets $100,000 if the sum of his field goal percentage, free throw percentage, and his 3-point percentage matches or exceeds 169 percent. What sabermetric whiz came up with that one?

Some are designed to keep a kid from turning into a fatbody -- the Heat, for example, give Mario Chalmers $19,580 just for showing up for summer league, and for going through a team "skill/conditioning program." Actually, Riles -- who advocates running until you puke all 12 months of the year -- gave a half-dozen of his players that very incentive. Which means Micky Arison is the only owner cutting checks in June and July.

Some incentives are bizarre. Consider Nick Collison of the Thunder -- nice player, probably worthy of anybody's power rotation. He gets $100,000 if he wins -- wait for it -- MVP.

Adonal Foyle gets $500,000 if he wins MVP, and another $500K if he wins MVP of the NBA Finals. Wonder how many gin and tonics the GM and agent went through before they came up with those. Or how many times did the guys pass the bottle around before they figured that Luke Ridnour would merit an extra $1.5 million for winning Defensive Player of the Year?

If Carlos Boozer plays 65 games, averages more than 32 minutes, and finishes in the top 12 in boards (total or average), he gets $333,333. To which we say, the guy is getting $12.6 million, fercryinoutloud, why should his team expect anything less than top 12 in boards?

Larry Hughes gets a $1.6 million bonus if his team -- whatever team he's on in '09-10 -- wins 55 games or more. Once again: This guy makes $13.6 million base salary. Shouldn't he be expected to lead his team to 55 wins, aside from the fact that he's, you know, mediocre?

Rafer Alston has a base salary of $5.25 million, but he also has some add-ons. If he wins Player of the Week, he'll get $15,000 -- and he can keep winning them and get $15K a pop, with a max of $120,000. If he wins Player of the Month, that's $50,000. And if he makes the All-Star team, he'll earn an additional $325,000.

Tony Battie (base: $6.06M) has some odd incentives. He gets $100,000 if he plays in 50 games AND averages eight rebounds. He pockets another $100,000 if he plays in 50 and averages five free throw attempts per game. And he'll bring home an extra $100,000 if he is just active for 50 games and the team reaches the second round of the playoffs.

[bdm860]

And of course this might lead to the question, can't we get around the salary cap by offering some rich incentives.  Sign players to minimum contracts but give like a $5M bonus if we win the champhionship.  Don't know how official this sight is, but it talks about the rules behind NBA contract incentives. (Of course this may all be in one of Roy's Salary Cap FAQ threads).

http://members.cox.net/lmcoon/salarycap.htm  (See question #61)

There are three types of allowable incentives: performance incentives, academic/physical achievement incentives, and extra promotional incentives. The latter two types of incentives are always included in team salary. Performance incentives are classified as either "likely to be achieved" or "not likely to be achieved," and are only included in team salary if they are "likely to be achieved." The league office determines what is likely and what is not. Their guideline is whether the criterion was achieved in the previous season. For example, if a player had seven assists per game the previous season, then an incentive based on seven assists per game would probably be classified as "likely to be achieved," but an incentive based on eight assists per game would probably be classified as "not likely to be achieved." Unlikely bonuses in any season are limited to 25% of the player's salary in that season. In the first year of a contract the base salary, likely bonuses and unlikely bonuses must all fit within the salary cap or exception. The league also determines a team's available cap room by adding in the unlikely bonuses for all players who signed that season. This prevents a team from signing multiple players to lower salaries but with lots of unlilely bonuses, and therefore committing to more salary than it has cap room to offer.

Exceptions are reduced by the aggregate of the salary and unlikely bonuses, so if the Mid-Level exception is $5.5 million and a player is signed to a $2 million base salary and $500,000 in incentives, the team's Mid-Level exception is reduced by $2.5 million, leaving $3 million.

Incentives must be structured so that they provide an incentive for positive achievement by the player or team, and are based upon numerical benchmarks (such as points per game or team wins) or generally recognized league honors (such as MVP or all-NBA first team). The numerical benchmarks must be specific -- e.g., a bonus may be based on the player's free throw percentage exceeds 80%, but may not be based on the player's free throw percentage improving over his previous season's percentage. Certain kinds of incentives are not allowed, such as those based on the player being on the team's roster on a specific date, or for a specific length of time. An incentive also cannot be based on the player suiting up for a specific number of games.

All performance incentives are re-evaluated at the start of each season to determine whether they should be classified as likely or unlikely to be achieved. In addition, players' performance incentives may be re-evaluated if they are traded. For example, a bad team may have a player with a performance incentive based on the team winning 41 games, that the league classifies as "not likely to be achieved." If that player is traded to a contending team, the league may reclassify the incentive as "likely to be achieved," and include it in the new team's team salary.

Note that the incentives are classified based on the prior season, not on an assessment of the current season. Suppose Team A won 25 games last season, and Team B (with the league MVP) won 45. Also suppose the MVP had a performance incentive based on his team winning 30 games. This incentive would be classified as "likely to be achieved," since Team B achieved this standard the prior season. Now suppose this player is traded to Team A for draft picks. Even though adding the MVP should easily push Team A's win total above 30, the incentive would still be reclassified as "not likely to be achieved" since the classification is not based on an assessment of the current season, but on the results of the prior season.
 

[zerophase]

that was extremely entertaining to read... tp.

[Hoyo de Monterrey]

TP bdm great find.

That's how we represent the dms everywhere

[yall hate]

the goofy, unlikely to reach ones make sense.

The team gives out something that they likely will never have to pay.  The agent can say, look you can make x dollars, aren't I great, and the player just goes and plays.  There is very little harm to those silly ones (i.e., nick collison - mvp)

[paintitgreen]

the goofy, unlikely to reach ones make sense.

The team gives out something that they likely will never have to pay.  The agent can say, look you can make x dollars, aren't I great, and the player just goes and plays.  There is very little harm to those silly ones (i.e., nick collison - mvp)

Agreed, they're very smart. The Ridnour DPOY one is great. If a guy's knock is that he doesn't play good defense, you give him large incentives based on defense. They'll be classified as unlikely, and thus not included in the salary cap figure, but if he actually did become DPOY, he'd actually be worth all the money you're giving him.