Tag: Longform

How sneaker free agency works: The biggest misconceptions

HoopsHype’s new series gives an inside look at shoe deals, with part four focusing on the biggest misconceptions about the sneaker industry.

This is part four of a four-part series that gives readers a behind-the-scenes look at shoe deals and the sneaker free agency process, with insight from various NBA agents, sneaker executives and industry experts. Check out part one here, part two here and part three here.

In recent years, fans have become much more knowledgeable about shoe deals and the sneaker-free-agency process. Top media outlets like ESPN and Yahoo! Sports have ramped up their coverage of the sneaker world as whole, hiring industry experts like Nick DePaula to break news and provide terrific analysis. 

Also, social media allows sneakerheads to be more informed than ever. Not only can fans follow their favorite brands and players, top NBA reporters treat sneaker-deal terms as breaking news and it’s in their feed alongside other scoops (like trades and free-agent signings). Most people initially learned of Zion Williamson’s record-breaking rookie deal with Jordan Brand when Adrian Wojnarowski tweeted it to his four million followers.

However, there are still quite a few misconceptions about sneaker deals and the industry as a whole, according to various NBA agents and shoe-company executives who spoke to HoopsHype. 

“Fans think that every player is making millions of dollars and that every superstar player is making crazy money from their sneaker deal and that’s not the case,” one NBA agent said. “A lot of guys are in six-figure-and-below deals and when you’re looking at what a typical NBA player makes, that’s not anything to them. The guys who are in the millions are in a very rare class. There are the guys who have signature shoes, but the number of guys who make royalties or have minimum-guaranteed royalties from their signature shoe is even smaller. 

“There aren’t many guys who make $10 million per year or more from their sneaker deal and that’s around the average NBA salary now, so the impact that the sneaker deals have on these guys and how they operate isn’t as significant as people think. It’s good money, but it’s not crazy (in most cases).”

Zion Williamson’s Jordan Brand shoes (Photo by Jonathan Bachman/Getty Images)

Fans often overestimate how much players are making if they’re with a company like Nike or Jordan Brand. The public was surprised to learn that Kawhi Leonard was making less than $500,000 from Jordan Brand (before leaving for New Balance). Jimmy Butler was getting a similarly small paycheck from Jordan Brand before becoming a sneaker free agent.

But it’s not just the fans who do this. Sometimes, players believe they’re going to get a ton of money from their sneaker contract only to be disappointed when that’s not the case.

“I think there’s this expectation that everybody gets a big shoe deal, but not everybody can get that kind of contract,” NBA agent Roger Montgomery said. “I think that misconception hurts agents sometimes because every player thinks they can get a huge sneaker deal because they’ve heard about some of these big deals that other players got. They may just get a merch deal that only gives them free product. It’s still a shoe deal, but it’s not the piece of the pie that they expected.”

Sometimes, rival agents prey on a player’s unrealistic expectations. Rival agents constantly try to poach successful players away from their peers. They usually try to persuade the player and his inner circle that the current agent did a poor job negotiating their contracts and that they’d be able to get the player significantly more money from their shoe company or NBA team.

Even certain All-Stars have trouble getting a lucrative shoe deal because the brands are looking for certain positions and styles of play (as we covered in part two of this series). For big men, especially those in small markets, it can be very difficult to get a big payday from a sneaker company.

“A player may be an All-Star, but that doesn’t necessarily mean that he can sell sneakers,” one sneaker-company executive said. “Sometimes, an agent will say, ‘My player was an All-Star, so he deserves to be paid like these other All-Stars!’ Well, a sneaker company is mainly focused on whether he can sell sneakers and being an All-Star doesn’t guarantee anything. Also, something I see a lot is when a player signs a big contract, their agent will try to come to the sneaker company and say, ‘Look at the deal he signed with his team! He deserves a bigger shoe deal!’ He may be a great player and have a big NBA contract, but, again, it doesn’t mean he can sell sneakers. These things come across my desk and I’ll see how much some of these guys want and I’m just like, ‘What?!’ He may be a dynamite player, but I don’t care; I need guys who can move sneakers.”

In 2018, an Eastern Conference general manager told HoopsHype that some NBA players are more loyal to their sneaker brand than to their NBA team. After all, it’s not uncommon for a player to be with the same shoe company for their whole career, but bounce around from NBA team to NBA team. 

“A player may make more money from their shoe deals than from their NBA deals over the course of their lifetime,” the GM said. “You wonder, ‘Who is the player loyal to?’ Suddenly, the shoe company may become a factor when decisions are made. Because there’s no salary cap in those negotiations, a company like Nike can give a player as much money as they want and as long of a contract as they want [whereas] NBA teams obviously can’t do that. The relationship between the player and his shoe company is probably more stable and long-lasting than the player’s relationship with their franchise too. There are plenty of examples of players who have lifetime shoe deals, so it can be a relationship that continues long after the player has retired. It’s more common to see a player change teams than change shoe brands.”

When asked about this idea, there was some agreement and some push-back.

“It sounds weird to say, but there are some guys who really do have a family-style relationship with the people from their sneaker brand,” DePaula said.

Photo by Astrid Stawiarz/Getty Images for Frito-Lay

“I think people who jump to the conclusion that players are more loyal to their sneaker brand than their NBA team must be on the outside looking in at the sneaker business,” one NBA agent said. “A lot of guys are upset with their sneaker company – they sometimes don’t have the best relationship with their sneaker company despite getting paid a lot of money from them and being with them for a long time. I don’t want to name names, but there are players who would surprise you that are upset and who don’t necessarily have a great relationship with their sneaker brand. It’s almost the same way they look at their team like, ‘They were the ones who could pay me the most money and since it was the best offer business-wise, that’s why I signed it.’ Some players are very loyal to one brand and some have a great relationship with their sneaker company, but you can’t always make that assumption.”

“I think it is hard to compare the two relationships,” former NBA agent Matt Babcock added. “A commitment to a team means that the player is required to team up with specific players and coaches, so there’s a direct correlation with that player’s career success. It also determines where that player and his family live. It is a very involved commitment. On the other hand, a commitment to a shoe company is significantly simpler. A player can wear the shoes wherever he wants and they just need to change the color of the shoes if he switches teams.”

One final misconception is that the United States’ basketball-sneaker market is booming right now. In reality, sales have been down recently. 

“Trends are very cyclical,” one NBA agent said. “After Michael Jordan, shoe companies were chasing the success of his sneakers and giving out a lot of signature deals in the ‘90s. But when LeBron James first entered the NBA in 2003, the basketball-shoe market was down. Then, it exploded around the time of the 2008 Olympics. The market was exploding until we got to this recent trend of athleisure/minimalist type of stuff that everyone is wearing. Now, there’s a big focus on running shoes, NMD-type shoes and minimalist shoes, so basketball shoes aren’t really in style right now. That’s kind of been the issue.”

“You have to understand the marketplace over the last three years and see why companies made the decisions that they made,” Montgomery added. “We have to figure out what these companies are trying to accomplish. It’s the same thing we have to do with NBA teams. A team may have cap space, but they may want to hold onto that space for the future. These shoe companies have a budget and, each year, that budget changes. It’s just like the salary cap. If a company is coming off of a not-so-great year, they may be thinking, ‘This year, we’re going to pull back a bit and not spend as much.’ If a company is coming off of a great year, they may be thinking, ‘What we’re doing is working, so we’re going to keep the same strategy and spend again.’ What we have to do as agents is understand each company’s strategy.”

Be sure to check out part one (breaking down the types of shoe deals), part two (detailing shoe-deal negotiations) and part three (taking a look at the sneaker-free-agency process) of this series.

How sneaker free agency works: The recruiting and pitch meetings

HoopsHype’s new series gives an inside look at shoe deals, with part three focusing on what happens when a player is a sneaker free agent.

This is part three of a four-part series that gives readers a behind-the-scenes look at shoe deals and the sneaker free agency process, with insight from various NBA agents, sneaker executives and industry experts. You can read part one here and part two here.

When a player’s shoe deal expires and they become a sneaker free agent, what happens next?

Typically, a shoe deal is structured to expire on October 1. Most have language that allows the incumbent brand to offer an extension to the player in the spring. If he turns down the extension to weigh his options, he can start meeting with rival brands and hearing their pitches after August 1 (since that’s 90 days before the contract expires).                                                                                                         

Almost every sneaker contract has a match clause, which allows the incumbent brand to match an offer sheet that the player receives (like restricted free agency). Typically, the incumbent brand has 10 days to match. Let’s say a player wants to leave Nike to sign an offer sheet with adidas. Nike would have 10 days to match the offer sheet. If Nike matches, they keep the player; if Nike declines, the player would join adidas.

“The match clause is very much a relationship thing, and Stephen Curry is the most famous example of this,” ESPN’s Nick DePaula said. “He signed an offer sheet with Under Armour and the Nike guy called Steph and they had heart-to-heart. The Nike guy said, ‘Hey, normally we would match this because we value you as a player, but do you really want to leave? Where is your head at?’ And Steph said that he really wanted to go to Under Armour to try to build his own thing. Nike basically said, ‘Alright, cool. We respect that, so we’ll let you go.’ They got a lot of heat for that (hindsight is 20/20), but if a player really wants out, they’ll sometimes let him go.”

Like NBA teams during free agency, sneaker companies recruit players and put together elaborate, personalized presentations in an effort to impress the individuals they’re pursuing.

Perhaps the most popular sneaker-free-agency recruiting story is Nike botching their meeting with Curry and his family when the star point guard was considering a move to Under Armour. One Nike official mispronounced Curry’s name (saying “Steph-on” rather than Stephen) and they accidentally left Kevin Durant’s name on one of their PowerPoint slides, making it obvious that they had just repurposed a previous presentation. “I stopped paying attention after that,” Dell Curry told ESPN’s TrueHoop. 

When it was Under Armour’s turn to meet with Curry, they did it at his home in Charlotte. Knowing that Curry is a big family man, they included his family in their pitch quite a bit, per DePaula. For example, they mocked up special colorways of their next team shoe to honor his various relatives (such as a Mother’s-Day colorway that showed love to his mom, Sonya).

“When adidas is doing their rookie pitches, historically, they rent a crazy mansion in the Hollywood Hills and bring a player in for three hours,” DePaula said. “They’ll have a chef, a ping-pong table and video games to create a hang-out atmosphere where they’ll get to know the player (and vice versa). They’ll let the player bring his family and friends and agent. They really try to develop a relationship with the player. Also, adidas has gotten some of their artists (like Pharrell or Snoop Dogg) to record a personalized message for players and have them talk about how they’re excited for them to join the family.”

New Balance has a 30-to-40-foot digital billboard that’s in the lobby of their building and when they’re recruiting a player, they’ll play a special video message for them when they arrive. 

Fred VanVleet at Scotiabank Arena. (Nick Turchiaro-USA TODAY Sports)

AND1 develops a logo for the player, shows them designs for PE colorways and discusses their custom marketing plan for the individual. They also stress that players can keep their own personal brand and AND1 will even help promote it. Fred VanVleet, who recently signed with AND1, has a brand called ‘Bet on Yourself’ and he sells clothes, hats, wristbands and other items online and in his own store in his hometown of Rockford, IL.

“A lot of guys are coming into the league with their own brand,” said AND1’s head of sports marketing Dexter Gordon. “The whole landscape is changing with these young guys. They’re businessmen now. You have to look at these players as partners like, ‘You’re going to help us build our brand and we’re going to help you build your personal brand too.’ Sometimes, that means doing a collab. Sometimes, that means letting a player wear some of their own stuff during AND1 photoshoots. We’re going to teach you about the business too. Fred came in with his own brand, ‘Bet on Yourself,’ and we love it! We would never tell him that he can’t do that.”

Every company has a different approach. These days, players have a ton of options when they hit sneaker free agency. Nike, adidas and Jordan Brand are still on top, but many competitors are now in the space including Under Armour, PUMA, New Balance, AND1, Converse, Li-Ning, Anta, Peak and Q4 among others. Agents are welcoming these brands with open arms, as it only helps them do their job.

“I think it makes it easier because you have more leverage based on the fact that you have more suitors for the player,” one top NBA agent said. “It gives you a better sense of what the market is before you talk to the bigger companies and it gives you more options so if you can’t get what you want from the bigger companies, there’s a range of other companies that can still give your client a great deal. That goes for the domestic companies (like PUMA, New Balance and AND1) and the Chinese companies (like Anta, Li-Ning and Peak).”

“Anytime you have more brands and more opportunities, it’s going to make things easier for the athlete and the agent because now you have more offers to look at,” Montgomery added.

Despite the increasingly crowded market, Nike and Jordan Brand know that many players have always dreamed of signing with them and they use this to their advantage. Typically, Nike and Jordan offer the least amount of money because of their unique position.

“Usually, Nike and Jordan Brand are the last to pitch because they want to let everybody else set the market first and then their offer will usually be the lowest since many people have an affinity for their brand,” DePaula said.

“Nike and Jordan Brand usually have an advantage because many players grew up with their product and love the brand,” one top NBA agent said. “In many cases, players are willing to take less money just because they want to be associated with Nike or Jordan as opposed to other companies. These companies often know your client’s preferences and that just gives them a leg up in negotiations.”

But if a player joins Jordan Brand, they get a ton of free gear sent to them every few months and they can wear their favorite shoes during games. Also, the Jordan Brand family goes on an annual summer trip exclusively for their athletes and their loved ones. In recent years, they’ve been to Monaco, Mexico and the Bahamas to name a few. For some players, these things outweigh the additional cash.

Michael Jordan in Paris (Photo by Jordan Brand via Getty Images)

“If you grew up with a Michael Jordan poster on your wall and then you’re about to enter the NBA and you get an offer from Jordan Brand, I totally get it!” Gordon said. “That’s every kid’s dream, being able to get all of the Jordans they want. MJ is an iconic person and they feel like, ‘Wow, he wants me!’”

On the other end of the spectrum, Chinese brands (such as Anta and Li-Ning) usually offer the most money. They understand that most players are unfamiliar with their brand and that the only way they can compete with companies like Nike and adidas is to write a bigger check.

“The Chinese brands are typically coming in with the higher offers; that’s been the case for a while now,” DePaula said. “But, for the most part, a lot of the brands are usually in the same ballpark when it comes to their offers. I can’t think of too many times when one brand’s offer was leaps-and-bounds higher than another brand’s offer.”

“An agent needs to keep a pulse on the marketplace to see which companies are prepared to make aggressive plays in any given year,” former NBA agent Matt Babcock added.

One agent pointed out that while many players enter the league wanting to sign with Nike or Jordan because of their love of those shoes, their priorities tend to change once they’re a veteran. By the time they are on their second deal, they may just want to take the biggest offer. 

“A lot of these kids get to the NBA and they want to play with an official NBA basketball from Spalding, wear an authentic NBA jersey and play in Nike shoes,” the agent said. “For some kids, it’s what they’ve been looking forward to their whole life. However, by the time some of these players get to their second sneaker contract, they’re now more open to other brands and want to make as much money as they possibly can – even if they were a huge Nike fan. We saw that with D’Angelo Russell and Kyle Kuzma, who were complete Nike guys. They loved Nike, but they went in a different direction because they wanted to make more money. Russell signed with Li-Ning and Kuzma signed with PUMA.”

In some cases, the primary NBA agent negotiates their clients’ sneaker deals himself. For example, Aaron Goodwin is the primary agent at Goodwin Sports Management, but he’s known for negotiating excellent shoe deals; he did LeBron James’ rookie deal with Nike, Kevin Durant’s rookie deal with Nike and all of Damian Lillard’s deals with adidas. Other agencies have someone whose sole focus is sneaker-and-endorsement deals.

“It varies from agency to agency,” DePaula explained. “CAA has one person who specifically does shoe deals, Lloyd Frischer, and he’s done a great job. He did Joel Embiid’s deal with Under Armour, Dwyane Wade’s lifetime deal with Li-Ning, Donovan Mitchell’s extension with adidas, Paul George’s signature-deal extension with Nike, Zion Williamson’s deal with Jordan Brand and Kyle Kuzma’s deal with PUMA. That’s six deals with six different brands! They’re strong deals across the board too. Priority Sports has a guy who specifically does shoe and marketing deals too; he did Gordon Hayward’s deal with Anta. It just depends on the agency.”

Sneaker free agency doesn’t always go the way a player expects, which we’ll cover in part four of this series that focuses on the biggest misconceptions about shoe deals.

Be sure to check back later this week for part four of this series.

How sneaker free agency works: An inside look at negotiations

HoopsHype’s new series gives an inside look at shoe deals, with part two focusing on the negotiations and incentives in sneaker contracts.

This is part two of a four-part series that gives readers a behind-the-scenes look at shoe deals and the sneaker free agency process, with insight from various NBA agents, sneaker executives and industry experts. You can read Part 1 here.

When an NBA executive and an agent are negotiating an NBA contract, they are restricted by the salary cap and they must follow all of the rules outlined in the Collective Bargaining Agreement. When a sneaker-company executive and an agent are negotiating a shoe deal, there are no such restrictions, which allows both sides to be very creative during the talks.

Nowhere is this creativity more evident than in the incentives that are included in shoe deals. When sneaker deals leak, we often hear that the player will earn “up to” a certain amount. That’s because there are a ton of performance-based bonuses included in most deals, so it’s difficult to project exactly how much money the player will actually take home. 

There are individual incentives for averaging certain stats, leading the NBA in scoring, playing a certain number of games, winning an end-of-season award (such as MVP), making an All-Star team, All-NBA team or All-Rookie team and so on. There are also team-based bonuses for winning a certain number of games, making the playoffs, advancing in the postseason, making it to the NBA Finals, winning a championship (and playing a certain number of minutes), etc.

According to ESPN’s Nick DePaula, players sometimes earn $300,000 for being selected as an All-Star, $250,000 for winning the dunk contest and $25,000-to-$50,000 for participating in an All-Star Saturday contest. When players are snubbed from the All-Star Game and other honors, part of the reason why they’re often upset is because they are missing out on a lucrative bonus. 

There are also reductions that are negotiated into these deals. For example, it’s common for contracts to have a games-played threshold where the player will actually lose money if they don’t play in a certain number of contests (and 60 games is commonly used). Also, one brand does a threshold bonus where a player can earn a $250,000 bonus if their points per game and rebounds per game add up to 26 or higher, according to DePaula. But if their point average and rebound average add up to fewer than 16, there’s a $250,000 reduction.

Shaquille O’Neal (Photo by Lisa Lake/Getty Images for Reebok)

Interestingly, some companies include a small-market reduction as well. Just as brands give players a bonus for being in a large market (such as Los Angeles or New York), they’ll significantly dock their pay if they land in certain small markets. Players are essentially being fined for ending up in a small-market city, even if it’s not the player’s choice.

“I’ve seen some brands include a 20-percent reduction for landing in certain small markets,” DePaula said. “I know for a fact that one brand had Sacramento and Orlando among others on that list of markets.”

“Yes, that’s definitely a clause that exists in contracts,” one shoe-company executive confirmed on the condition of anonymity. “There are bonuses or reductions based on the player’s market. If the player goes to a major market like New York, Los Angeles, Chicago or Miami, the brand is going to get more exposure. They’ll be playing in more nationally televised games and get more media coverage.”

Keep in mind, this is all up for negotiation, so an agent can push back against a small-market reduction if they don’t want it in the contract.

“It’s a give-and-take,” one NBA agent said. “If you’re going to allow a reduction like that to be put in place, what are you getting in return that makes it worth it to include that? The main reduction incentives that you see in sneaker contracts (and all endorsement contracts) are related to injuries. If a guy isn’t playing, there are opportunities for brands to roll back their pay. There are also moral clauses, where the player’s contract could be affected if the player does something of moral turpitude.”

Sneaker companies often prefer giving a player an incentive-laden deal rather than a large guaranteed salary. 

“Now, a lot of brands don’t want to pay big base salaries,” said AND1’s head of sports marketing Dexter Gordon. “If you sign a guy to a deal with a big base salary and he has a bad season, you’re locked into paying that base salary and you’re like, ‘Ugh.’ If it’s an incentive-laden deal, it’s safer. If the player does well, they’ll make more money and everyone from the brand is happy too.”

Even if a player signs an incentive-laden deal, they’ll still have a base salary of some sort and that must be negotiated as well. While NBA salaries are available to the public, it’s tougher to find out contract details when it comes to endorsement deals. So, how do agents come up with an asking price and ensure that their client is getting a fair deal?

“You try to find what the market is and while it’s not definitive like it is when you’re negotiating an NBA contract, you hear rumors and dig for information to find out what other players were paid,” said a top NBA agent. “You also have to talk to every company. By having conversations with every company as opposed to just one or two, you get a valuation and understand what the market will bear for that particular client.”

“Larger agencies have a clear-cut advantage when determining market values for players,” former NBA agent Matt Babcock said. “They will naturally have a better grip on the marketplace, as they engage in more negotiations with each shoe company due to representing more clients.”

Sometimes, an agent has to think outside the box when trying to sell a brand on their client. 

“If your guy isn’t a star, it’s your job to drum up interest by finding your player’s niche and focusing on that,” one NBA agent said. “Maybe your player is in a market that Nike wants to be in because they don’t have any players on that team. There are also certain guys who fall into a streetwear or cultural-ambassador category, where it’s more about off-court appeal than anything. With those kinds of guys – like PJ Tucker and Nick Young – you approach the negotiations differently. You need to figure out an angle or niche to be able to sell your guy to brands.” 

PJ Tucker of the Houston Rockets (Photo by Bob Levey/Getty Images

In addition to incentives and base salary, agents also negotiate what the player’s product allowance will be, whether they’ll have a signature shoe (and, if so, the royalties associated with that), the company’s charitable support (as some players seek support for their AAU team or camps) and so on. There are other details that need to be ironed out too. Will the player be making any appearances? Will he be in any commercials or activations? Will the player go on an offseason tour to promote the brand (and, if so, will he be going overseas)?

Every agent mentioned that their client’s position and style of play have a significant impact on negotiations and how the player is perceived by the shoe companies. Many big men around the NBA are on merch deals. By now, you’ve probably heard the adage: “Big men can’t sell shoes.”

“I think that’s how a lot of companies think,” AND1’s Gordon said. “When you’re trying to sell to consumers, especially kids, they identify more with guards. Not many kids are going to grow up to be Shaquille O’Neal. But if you have a guy like Stephen Curry or, our guy, Fred VanVleet, a kid can say, ‘Hey, if I work hard, I can become that.’ I mean, Steph Curry looks like a high school kid! (laughs) The consumers we’re targeting can identify more with guards. Also, guards are exciting! A lot of kids don’t see back-to-the-basket bigs as exciting.”

For many years, sneaker companies primarily went after guards. In recent years, unicorns like Giannis Antetokounmpo and Kevin Durant have emerged, so now brands target “perimeter players.” However, with Joel Embiid getting his first signature shoe later this year and Zion Williamson just signing the richest rookie deal since LeBron James, could this be the year that big men prove that they can sell shoes and force companies to update their approach?

“Joel Embiid’s signature sneaker is going to be a really interesting case study because there’s no current center that has a signature shoe, so we’ll see how that does,” DePaula added. “What Joel brings is his ability to go viral on social media whenever he wants. I think there’s some validity to the phrase, ‘Big men can’t sell shoes.’ It is fairly true. We’ll see if Joel can break the mold because, historically, it’s been challenging for them.”

Be sure to check back later this week for part three of this series, which looks at what happens during the sneaker-free-agency-process, how brands recruit players and more.

How NBA pensions work

Breaking down the NBA’s pension program and other benefits for retired players (such as health insurance and college-tuition reimbursement).

Thanks in large part to the actions of modern-era players like Chris Paul, LeBron James, Caron Butler and James Jones (among others), the NBA’s pension program has significantly improved in recent years. This greatly benefits the old-school players, who haven’t always seen eye-to-eye with the game’s modern stars.

NBA players have had a pension plan since 1965. Any player with at least three years of service in the NBA receives a monthly pension payment and access to other benefits (such as life-long healthcare coverage, a college-tuition reimbursement program and more). In order to accrue a year of service, a player must be under contract for at least one game during the NBA season (whether they’re active or inactive doesn’t matter).

According to the National Basketball Retired Players Association, after the changes in 2017, pensions increased by nearly 50 percent for players who start receiving payments at 50 years old – with corresponding increases for players who start receiving payment at later ages. Previously, the age-50 benefit paid out $559 per month per year of service. Now, it pays out more than $800 per month per year of service.

Also, the pre-1965 pension benefit amount (which is paid to players who were in the league before the pension plan was established) increased from $300 to $400 per month per year of service.

On average, former players are now earning an additional $300 per month, according to Scott Rochelle, the President and CEO of the NBRPA.

Players can start receiving payments as early as 45 years old, but the payments are reduced since they’ll be receiving the payments over a longer period of time. Players are encouraged to hold off on receiving payments until they’re age-62 (if possible) in order to receive the highest-possible payments.

A 62-year-old who played 10 or more years in the NBA will earn over $215,000 annually from his pension. For comparison, “a 10-year NFL veteran who retired prior to 1993 receives [a pension] of approximately $30,000-40,000 a year, pretax, at age 55,” according to the San Francisco Chronicle. (The minimum that a retired NBA player will receive at age-62 is $56,988 annually, and that’s just for someone with three years of service).

Making these improvements to the pension program required an additional $33 million annually in funding – a cost that the NBA and the current players agreed to split equally. 

“The overall response that we received was great appreciation, relief and a sense of confidence that the retired players were being taken care of and still part of this family,” Rochelle said.

“It’s great to see that today’s players recognize how important it is to give back to these retired players in a major way,” said Caron Butler, who’s on the NBRPA’s Board of Directors. “I think it’s special. The retired players are happy because you sacrifice your body and give everything to this game, so to be appreciated on the back end speaks volumes. We’re so grateful to play for a league like the NBA that understands the importance of taking care of us and our families. Once you’re part of this fraternity, it’s a lifetime thing.”

Retired athletes Caron Butler, Robert Parish, Sheryl Swoopes and Doug Williams. (Nelson Chenault-USA TODAY Sports)

EDUCATIONAL PROGRAMS

The college-tuition reimbursement program is another recent addition that’s helping many retired players. If a former player wants to go back to school and enroll in college courses, they can get their tuition reimbursed up to $33,000 annually.

“In addition to improving the pension program, they included an educational component with it as well,” Butler explained. “Now, retired players who didn’t finish their degrees can go back to the school and the guys who did get their degrees can further their education even more. They provided enough funding to make $120,000 available to every person who has ever played in the Association.”

As of September 30, 2019, there were 51 players who submitted pre-approval forms for tuition reimbursement and 28 had been approved. Since then, it’s estimated that more than 25 additional players have applied for the program. 

“Adonal Foyle earned a Master’s in Business Administration through one of our programs with Purdue Sports Global,” Rochelle said. “Vladimir Stepania earned a Master’s degree through Anaheim University through one of our programs. Adrienne Goodson, a former WNBA player, also earned a Master’s degree through one of our programs. It’s great because we know that we’re making an impact. And it really does help when we talk about those success stories because it pushes other retired players to take advantage of our services as well.”

“For many years, we’ve seen that once a player is no longer playing at a university, they’re done with you,” Butler added. “The scholarship is no longer good and you can’t pivot back to someday finish your education. Now, with this program, you’re able to go back and further your education and you’re going to get the financial assistance that you need. Not everyone walks away from the game of basketball with millions of dollars, so to have this financial support speaks volumes.” 

The NBA and NBRPA also have educational programs for active players and newly retired players that teach them how to be fiscally responsible. This – coupled with increased salaries and the fact that the NBA matches active players’ 401(k) contributions up to 140 percent – should lead to more players walking away from the game with significantly more money in savings.

“If you look at the sheer size of the contracts and compensation, plus the NBA matching 401(k) contributions up to 140 percent, they’re setting the players up to never ever be broke,” Rochelle said. “It helps when there’s a cultural push to make sure that players are doing the right things with the money that they’re earning. You see that now with players who are saving all of their game checks and just living off their endorsement money. Smart things like that are becoming more commonplace since there’s been a cultural shift toward fiscal responsibility. Nobody wants to show up in the headlines as a cautionary tale of a young athlete who burned all of their money. We’re seeing less of that, and I know we’re going to continue seeing that less and less because of the educational programs that we have now.”

Retired NBA players Willis Reed, Walt “Clyde” Frazier and Earl “The Pearl” Monroe (Photo by Astrid Stawiarz/Getty Images for Hospital for Special Surgery)

HEALTHCARE FOR LIFE

When 13-year NBA veteran Earl “The Pearl” Monroe started experiencing health issues in 1991 – just one year after he was inducted into the Hall of Fame – he was told by the NBA and NBPA that they couldn’t help him. In the coming years, he would need more than 47 surgeries, but he was no longer eligible to receive health insurance through the NBA once he retired.

Fortunately, Monroe did qualify for health insurance through the American Federation of Television and Radio Artists since he had appeared in a number of TV commercials during his playing days.

But after struggling with his health issues and watching other retired NBA players pass away at a young age (including Darryl Dawkins at 58 and Moses Malone at 60), Monroe became one of many former players speaking out about why retirees desperately needed healthcare.

Monroe told HoopsHype that he and other retired players started pushing for this in the 1990s, but it wasn’t until 2017 that this change was made.

Now, after three years of service in the NBA, players receive healthcare coverage for life. Players with 10-plus years of service in the NBA receive coverage for their spouse and children too.

“With the addition of healthcare for retired players, we were elevated to a very admirable position within the entire sports industry because this just simply doesn’t exist anywhere else or any other sport,” Rochelle said. “We were able to do it, which really helped our older players see that they’re not forgotten.”

Butler hopes that the NFL (and others) will follow in the NBA’s footsteps.

“I hope what we’re doing flows over to any union or other platform that needs this,” Butler said. “It’s important to take care of the folks who put so much into this and who moved the needle in the past. These platforms in the entertainment space have made so much money over the years, and I think it’s paramount that we take care of those people from the past and appreciate their impact and legacy. This goes for the NFL, hip hop and any other platform in the entertainment space. These people need to be taken care of and appreciated.” 

Part of the reason why these changes finally happened is because some of the biggest names in the NBA got involved. Many retired players credit James, Paul, Kevin Durant, Stephen Curry and Dwyane Wade for making sure this got done (with behind-the-scenes assistance from players like Butler and James Jones too). It took more than 25 years of lobbying, but funding health insurance for retired players was finally approved in 2017 with unanimous support from the NBPA’s player representatives. 

“I think that it’s very important to have the right people in position and have some of the biggest names involved to highlight the issues that haven’t been addressed for years,” Butler said. “They’re paving the way for the next wave of players. A lot of kids are watching and they’re seeing the initiatives that these stars are part of and the moves that they make, and they want to be like them in a way. This fraternity is small and you’re empowered and influenced by the people who come before you. Those are some of the biggest names in the game; I think the next wave of players will model themselves after those guys because they’re providing the new blueprint.”

“Now that we have superstars leading the union, it changes the complexion of the conversations that are had between the league and the union, and it gives the players a real leg up when it comes to credibility and getting some of the things that they’re looking for,” Rochelle added. “As [NBRPA Chairman] Spencer Haywood has built relationships with Chris Paul, Kevin Durant and LeBron James, it’s really helped us.”

Quite frankly, there were selfish reasons for active players to improve these benefits and programs too. After all, every single one of them will be a retiree at some point in the near future. After all, Father Time is undefeated. They will benefit from these changes in time, which is why it’s somewhat shocking that it took over 25 years for these changes to be made.

“LeBron James is going to retire one day and he may possibly be the greatest all-around basketball player that we’ll see in this lifetime,” Butler said. “Everybody is going to retire at some point! Unless you want to sit at home and do nothing – and I don’t think anyone wants to be in that position – you have to start preparing for what’s next. The game of life is so long. If you make sure you’re prepared for life after basketball while you’re still playing, you’ll hit the ground running once you retire rather than tripping over your own feet.”