Stephen Curry is one of many NBA players who is facing a heavy financial hit over the next few months. As a result of COVID-19 and the way contracts are structured, the 32-year-old could lose nearly $20 million in 2020-21.
Back in 2017 Curry signed a five-year deal worth $201.2 million with the Golden State Warriors. As part of that agreement, in 2020-21, he was due to earn $43 million — making him the highest paid player in the NBA. Chris Paul of the Oklahoma City Thunder and Russell Westbrook of the Houston Rockets are tied for second highest, with $41.4 million apiece. John Wall of the Washington Wizards and James Harden of the Rockets then round out the top five, with $41.3 million each.
Under the current collective bargaining agreement (CBA), a percentage of player salary is held in an escrow account pending league earnings reviews. At the end of the review, if the league exceeds revenue expectations, the money is distributed to the players. If the NBA’s revenue estimations falter, the money goes to the owners.
Because the NBA has done so well financially in recent years, the money has typically always gone back to the players. This year is different, though. As a result of how poorly things have gone for the league, there is talk of a 40 percent escrow.
At a 40 percent escrow, someone like Curry, who was due to make $43 million next season, would actually end up taking home $25.8 million. While that is obviously more than enough to feed one’s family, it is still considerably less than what the sharpshooter thought he was getting when he came to terms on his deal.
— Game 7 (@game7__) October 30, 2020
It gets even worse with lower paid players. Spencer Dinwiddie signed a three-year, $34.4 million contract with the Brooklyn Nets. He is due $11.4 million in 2020-21. Under a 40 percent escrow plan, that number dwindles to $6.8 million.
Carsen Edwards agreed to a four-year contract with the Boston Celtics that was supposed to pay him more than $4.5 million altogether. He is due $1.5 million next year. He will walk away with $900,000 under the new 40 percent escrow plan.
The NBA’s players and owners are currently in the midst of negotiating the start date for next season. The latter group wants to start in late December, while the former wants to begin in late January. That conversation is getting increasingly tense, and it too will have a dramatic impact on the salaries players are ultimately paid.
Now that’s how you do Halloween. https://t.co/C693pk7Nlh
— Game 7 (@game7__) October 31, 2020
Given how rough this past season was from a TV ratings and public sentiment stand point, the league was no doubt hoping things would get easier going forward. Thus far, that has not been the case.
The NBA’s owners and players are going to have to make some very tough financial decisions over the next few months. These sorts of choices often have ramifications that can last for years to come.
Will all parties involved come away feeling good, when it’s all said and done? It is increasingly looking like that will not be the case.