Quicklinks: Summary, products and services, successful players | Income and profitability | Expenses | History, strategy and challenges
Summary
Summary of the professional basketball business: how do basketball players make money?
Professional basketball players typically work as part-time or full-time employees of a professional basketball team. They may also work as freelance players, providing their services to teams on a per-game or per-season basis. In either case, their primary source of income is their salary. The team’s owner or general manager determines this.
Players may also earn income from endorsements, appearances, and other marketing opportunities. The business of basketball has evolved over the years, as players have become more marketable and the game has become more popular globally. Today, the business of basketball is a multi-billion dollar industry, with players earning salaries that rival those of other professional athletes. The average salary for an NBA player is over $5 million per year, while the average salary for a WNBA player is just over $100,000 per year.
List and description of the five most successful companies in the professional basketball player business. How big are they and what is their market value?
- LeBron James: He is a professional basketball player who has played for the Cleveland Cavaliers, Miami Heat, and Los Angeles Lakers of the National Basketball Association (NBA). Most consider him to be one of the greatest basketball players of all time. His career earnings are estimated to be $450 million, and his net worth is estimated to be $480 million.
- Kobe Bryant: He was a professional basketball player who played for the Los Angeles Lakers of the NBA. His career earnings are estimated to be $323 million, and his net worth is estimated to be $600 million.
- Michael Jordan: A former professional basketball player who played for the Chicago Bulls and Washington Wizards of the NBA. He is considered to be the greatest basketball player of all time. His career earnings are estimated to be $93 million, and his net worth is estimated to be $1.9 billion.
- Magic Johnson: A former professional basketball player who played point guard for the Los Angeles Lakers of the NBA, considered one of the greatest players in NBA history. His career earnings are estimated to be $18 million, and his net worth is estimated to be $600 million.
- Larry Bird: He was a professional basketball player who played small forward for the Boston Celtics of the NBA. He is considered one of the greatest players in NBA history. His career earnings are estimated to be $50 million, and his net worth is estimated to be $75 million.
Income and profitability
List of the top three sources of revenue for basketball players (AKA how do they make money?)
- Salaries: The vast majority of revenue for basketball players comes from their salaries. In the NBA, the average salary is around $7 million per year, while in the WNBA it is around $75,000 per year. Players in both leagues can earn much more or much less than these averages, depending on their experience, skill, and reputation. For example, LeBron James earned a salary of $35.6 million in the 2017-2018 season, while the lowest-paid player in the NBA earned a salary of just $874,636.
- Endorsements: Many basketball players also earn revenue from endorsement deals with companies. These deals can be worth millions of dollars per year, and the most popular players can earn the most money from them. For example, LeBron James has endorsement deals with Nike, Coca-Cola, Beats by Dre, and many other companies. These deals are often based on the player’s popularity and their ability to sell products.
- Other sources of income: Basketball players can also earn revenue from other sources, such as appearances, memorabilia sales, and camp appearances. For example, players may make appearances at events or to sign autographs for money. They may also sell their memorabilia, such as jerseys, shoes, and other items, for a profit. Finally, players run basketball camps for kids or give private lessons, for which they receive payment.
Salary and earnings: What are average earnings among basketball players?
Basketball players earn a wide range of salaries, depending on their experience and skill level. The highest-paid players in the NBA can earn upwards of $30 million per year, while players at the lower end of the pay scale may only earn a few hundred thousand dollars per year.
In terms of specific salaries, the highest-paid player in the NBA during the 2019-20 season was Stephen Curry of the Golden State Warriors, who earned a salary of $37.5 million. LeBron James of the Los Angeles Lakers was second on the list, earning a salary of $35.6 million. Kevin Durant, also of the Warriors, was third on the list with a salary of $30 million.
At the other end of the spectrum, there are a number of players who earn the league minimum salary, which is currently $898,310 for players with zero to two years of experience. Players with three or more years of experience earn a minimum salary of $1,445,697.
What are the profit margins for professional basketball players?
Profit margins for professional basketball players can vary greatly depending on a number of factors, such as the player’s salary, endorsement deals, and other sources of income. However, it is safe to say that the profit margins for most professional basketball players are quite high. For example, the average salary for an NBA player is around $5 million per year. However, the top players in the league can earn much more than that, with some players earning over $20 million per year. In addition to their salaries, many players also earn money from endorsement deals. For example, LeBron James is estimated to have earned over $50 million from endorsements in 2014 alone.
Expenses
What is the cost to become a professional basketball player? With an example.
Some of the things that can impact the cost include the level of play (e.g., NBA, international, etc.), whether or not the player is drafted, and the player’s agent fees. For example, let’s say an NBA team drafts a player. The player will then need to sign a contract with the team. The average NBA rookie contract is worth about $5 million over two years. However, first round draft picks often receive more money, with some contracts worth over $10 million. In addition to the contract, the player will also receive a signing bonus, which is typically around 10% of the total contract value. So, in our example, the player would receive a signing bonus of $500,000.
The player will also need to pay agent fees, which are typically around 3% of the total contract value. So, in our example, the player would need to pay their agent $150,000. Other costs may include training and travel expenses. For example, if a player wants to train with a specific coach or at a specific facility, they may need to pay for those costs out of pocket. Similarly, if a team drafts a player and is not based in their home country, they may need to pay for their own travel expenses to get to and from games. In total, the cost of becoming a professional basketball player can vary widely, but it is typically in the millions of dollars.
History, strategy and challenges
What is the history of professional basketball?
The history of professional basketball goes back to the early days of the sport. In the late 19th century, basketball was invented by James Naismith in Springfield, Massachusetts. The game quickly gained popularity, and by the early 20th century, professional leagues were playing in both the United States and Europe.
The first professional basketball league in the US was the National Basketball League (NBL), founded in 1898. Small-town teams originally made up the NBL, but it soon began to attract some of the best players in the country. In 1949, the NBL merged with the Basketball Association of America (BAA) to form the National Basketball Association (NBA).
The NBA quickly became the premier professional basketball league in the world, thanks in part to its strong television contracts. Today, the NBA is broadcast in over 200 countries and territories around the globe. Outside of the United States, professional basketball leagues have been slower to develop.
The first professional league in Europe was founded in 1952, and it took until 1984 for a professional league to be established in Africa. In recent years, however, professional basketball leagues have been popping up all over the world, from China to India to Australia.