PARADISE ISLAND, Bahamas -- NBA players, from the
highest-paid superstar to the lowest-paid rookie, will lose 10
percent of their paychecks in the 2001-02 season.
"I think players are going to be really upset when they learn
about it," said Orlando's Pat Garrity, who was elected Tuesday as
the union's secretary-treasurer. "Ten percent is a pretty big
The 10 percent giveback is known as the escrow tax, which the
players agreed to during negotiations to end the 1998-99 lockout.
The tax would be triggered only if players received more than 55
percent of basketball-related income. But projections show the
players will receive 64 percent of such income in the upcoming
Collectively, the players will be returning more than $150
million to the owners in 2001-02. The tax will stay in effect for
the 2002-03 and 2003-04 seasons under current basketball-income
projections, meaning the players will fork over close to a
half-billion dollars by the time the six-year collective bargaining
"It's not really something people are thinking about," Garrity
said, "But the comfort is that the alternative was a hard salary
cap, which wouldn't have been good for anyone."
Players received $1.38 billion in salaries and benefits during
the 1999-00 season, and the median salary rose 19 percent to $2
The median salary is up 40 percent in the two years since the
lockout, and 76 percent of the players are earning $1 million or
more, union officials said.
Seven players, including Garrity, were elected to the union's
executive committee Tuesday.
Alonzo Mourning of Miami, Sam Mitchell of Minnesota, Ray Allen
of Milwaukee, Jerome Williams of Detroit, Theo Ratliff of
Philadelphia and Antonio Davis of Toronto replace Tyrone Corbin of
Sacramento, Juwan Howard of Washington, Dikembe Mutombo of Atlanta,
Mitch Richmond of Washington, Mark West of Phoenix and retired Herb
"Great guys to work with," said union president Patrick Ewing,
who has one year left of his term.
Garrity replaces New Jersey's Jim McIlvaine as
secretary-treasurer, and first vice president Michael Curry of
Detroit remains in his post.
A deeper look
The $150 million is arrived at by assuming a 2001-2002 league payroll of $1.5 billion. This includes what will be a player average salary of close to $2.7 million. Total league payroll also includes the salary of any waived or retired players.
The figure of $150 million is a very arbitrary number because both variables are being predicted. While the average player salary will continue to increase, at least another $500,000 by the time the escrow tax goes into effect, league revenues have the potential of fluctuating even more. When we did the math, the total was less than $100 million for active roster players.
It is important to note that only 10 percent of players' salaries can be given back to the owners from the escrow tax. Union officials have said that the salaries might be equal to 67 percent of league revenue by the time the tax is implemented. If this holds true, the players will only lose their 10 percent and owners of teams with the highest salaries will pay a tax to make up the rest of the 12 percent difference. Also, the players must fork up the money before the season starts (Oct. 31).
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