The Economics of Being a Great (or at least popular) Player in the NBA

The NBA has worked hard the past few years to restructure its All-Star festivities, and it has done wonders for both the game and the league as a whole.

This past weekend, the National Basketball Association hosted its 68th annual All-Star weekend, and this year’s festivities took place in Charlotte, NC. The game had its share of highlights and spectacular plays as has become routine with the League’s mid-season showcase, and ­­­Kevin Durant ultimately took home MVP honors after leading Team Lebron over Team Giannis by a score of 178-164. In the past, this game was often viewed as a glorified layup line, and fans have assumed that NBA players would much rather enjoy a week vacation than to join in the festivities. However, amidst the flashy dunks and three-pointers this past weekend, there was one factor that casual fans were probably not aware of: the incentives that have begun to lead the game’s best players to passionately want to participate in All-Star weekend.

In 2016, the NBA decided to completely restructure the way that All-Star teams are comprised in the first place. For the 2017 All-Star game, the NBA decided to change the format to fans making up 50% of the vote, NBA players making up 25%, and media comprising the other 25%. Prior to the 2016-2017 season, the starters in the All-Star game were completely decided by fan vote, and then coaches around the league would vote to fill out the rest of the rosters. Predictably, this routinely created inconsistent results from those that even a casual fan of the NBA would expect. As there was no limit to the amount of times an individual fan could vote, the process ultimately saw some players selected that fans did not feel were entirely deserving when they were chosen over other players. We have all heard of the case of Yao Ming. Despite being a very good player for several seasons and holding career averages of 19 points per game and 9.2 rebounds per game, it became clear that Yao Ming’s All-Star votes were drastically boosted by the fact that he was the most well-recognized Chinese athlete in the world. There was nothing wrong with that, until it began to undermine the voting process as a whole. The 7’6 center’s career was cut drastically short by back and foot injuries, and it ultimately led to him missing 250 games in his last six seasons. In his final season in 2011, Yao had played in only five games total, and yet he received so many fan votes that he would have been a starter in the 2011 All-Star game. This was clearly a ridiculous injustice in the voting system and was only corrected by the fact that Yao was ultimately too injured to play in the game.

This issue did not end when Yao retired, but in fact continued right up until a few years ago when the rules were changed. In 2017, Zaza Pachulia, then of the Golden State Warriors, received the fifth most fan votes of all Western Conference players, and would have been a starter if the format had still been solely based on fan voting. In the 2016-2017 season, Pachulia averaged 6.1 points in just 18 minutes per game, numbers that any average sports fan would know should not yield a starting spot in a showcase for what are supposed to be the game’s best players. Zaza cited his fans from his home country of Georgia for his immense number of votes, and the fact that he would have been a starter if the League would not have changed its voting rules prior to the 2016-2017 season. In fact, he called the change in the voting rules the “Zaza Rules.”

It may seem trivial about who takes part in what is essentially a meaningless game in terms of playoffs and championships, but there are bigger monetary implications to being chosen as well. The most obvious bonus is the literal check you receive simply for being a part of the game. The original format up until last year’s game was that players from the losing team would receive $25,000, and winning players would take home $50,000. Beginning with the 2018 All-Star game, the NBA decided to double the paycheck for wining players, increasing it to $100,000, in an effort to increase the competitive nature of players and put on a better show. It seems as though this may be working, as the 2018 game ended in a very close score of 148-147, and this past weekend’s game was very close until the final few minutes of the contest. I would argue in favor of making the disparity in prize money even greater between the winning and losing teams, in order to ramp up the competition even further. Keeping the losing team’s money at $25,000 and raising the winning team’s money up to somewhere in the neighborhood of $150-200,000 would really send a message that playing hard and doing your best to win will be rewarded handsomely, which will make for better All-Star games in the future.

Another very important incentive for making an All-Star team is the contractual and bonus incentive that can come from being selected. One great example of this is the “Rose Rule,” which is a contractual incentive for young players that we discussed in a post earlier this month. As constructed, the Rose Rule allows any player who is still on his rookie contract to make up to 30 percent of a team’s salary cap (up from the original 25 percent), if that player: has twice been voted an All-Star starter, has twice been voted to one of the three All-NBA teams, or has won an MVP award. Based on this, it is clearly very beneficial for young players to play, and especially start in the All-Star game, as it can make a very large financial difference in that player’s contract. In addition to this, players often have bonuses built into their contracts for being selected to an All-Star team. Take for example, Rudy Gobert and Kyle Lowry; in 2017, Gobert, if included on the Western Conference All-Star team as either a starter or a reserve, would earn an extra $1 million on top of his salary, and Lowry would earn an extra $250,000 for making the Eastern Conference squad. This is clearly a very large incentive to propel a player to get himself into the game and is often commonplace in the contracts of today’s players.

As shown, the All-Star game means more to players than an exhibition match and a chance to take a week off. Despite that being the public opinion surrounding the showcase for so long, the League has gone out of its way to provide more and more incentives to increase player participation and enthusiasm over the years. More and more often, we are seeing players wholeheartedly wanting to be a part of the game and being genuinely heartbroken when they are not chosen. Whether through further monetary incentive, or just genuine cultural cultivation, it is definitely in the best interest of the game and the fans for the NBA to continue doing so.

-Will Hython

Photo Credit: Jeremy Brevard/USA Today Sports, via Reuters

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