NBA Financial Assessment for 2024-25 Season
The NBA has recently completed its financial assessment for the upcoming 2024-25 season, revealing that basketball-related income (BRI) has amounted to $10.25 billion. This figure, shared by a source who chose to remain anonymous, is significant for players, as it directly influences their salary retention from the previous season. However, the news is disappointing for many athletes, with an overall reduction of more than $480 million anticipated due to an escrow arrangement, a system established in the league’s collective bargaining agreement (CBA) to ensure a balanced revenue distribution between players and owners.
Impact on Players’ Salaries
Prominent star Stephen Curry, who was the highest earner in the league last season with a salary of $55.8 million and additional earnings estimated at around $100 million off the court, will be one of the most affected, missing out on $5.1 million. Other notable players like Joel Embiid, Nikola Jokic, Bradley Beal, and Kevin Durant will also face significant deductions, amounting to $4.7 million, $4.7 million, $4.6 million, and $4.5 million respectively.
Under the terms of the CBA, players collectively receive 51% of BRI. To align with this revenue-sharing agreement, the NBA had withheld 10% of player salaries last season, which has led to these substantial deductions. The league’s overall revenue was found to be lower than expected, impacted by a challenging local media landscape and several small-market teams advancing deep into the playoffs, resulting in decreased revenues from postseason ticket sales.
After these adjustments, players will take home approximately 90.9% of their salaries for the 2024-25 season, indicating that a player with an annual salary of $20 million would net around $18.2 million before taxes and agent fees, according to insights shared by Eric Pincus on Bleacher Report.
Escrow System Overview
The escrow system has been part of the NBA’s financial framework since the 1999 CBA and has previously fluctuated between 8% to 10%. For many years, players and the league shared the escrow, but from the 2014-15 season onward, players enjoyed a full return of the escrow for three consecutive years due to rising revenues. However, the onset of COVID-19 in March 2020 prompted a sharp increase in escrow withholdings to 25% to address losses in arena revenue. The subsequent season introduced a unique “ten-and-spread” approach to escrow withholdings, leading to a significant roll-over into the 2022-23 season, where revenues rebounded, allowing players to receive nearly full salaries.
Comparison with NHL
In comparison, the NHL operates a similar escrow system, frequently a source of tension among players, as past revenues typically favored owners during final calculations of hockey-related income. Prior to COVID, NHL players experienced consistent paycheck reductions of at least 10%, a situation that only worsened during the pandemic. However, fortunes seem to be improving in the NHL, as the league has since discontinued escrow withholdings for the 2024-25 season, with the prospect of returning full payments to players. This positive shift culminated in a new CBA agreement reached last week, ahead of the current CBA’s expiration.
Future Outlook for NBA Players
In more upbeat news for NBA players, they can expect stability in their salaries for the 2025-26 season, with the salary cap projected to rise to $154.6 million, reflecting the maximum allowable increase of 10% under the current CBA. This growth was fueled by the league’s recent signing of lucrative broadcasting agreements totaling $77 billion with major networks, effectively doubling the previous value of these deals. As the financial landscape continues to evolve, NBA players have a clearer path ahead as they navigate their salaries in the coming seasons.
