Are NBA Players Overpaid? - YouTube

Twenty years ago the average NBA player brought  home two to three million dollars a year  

now as of 2021 the average NBA salary amounts  to an absurd 7.7 million dollars a year  

however the league wasn't always like this

Michael Jordan arguably the most influential  player in sports history was making 3.5 million  

dollars a year during the 1994 and 1995 NB seasons  if we adjust this number to account for inflation  

Jordan would be making exactly six million eighty  three thousand one hundred thirty three dollars  

and twenty cents in nineteen ninety five notice  that this was during Jordan's prime in which he  

averaged an absurd 30.1 points a game and led his  team to the second best record in NBA history 72  

wins and 10 losses the only obvious disparity here  is the league's increased revenue year by year  

so here's a chart comparing the  salary cap in 1995 compared to 2021  

just as clarification the salary cap is a ceiling  that limits the total salaries a team can pay its  

players and is calculated as a percentage of  the league's revenue from the previous season  

so it's a direct link between the league revenue  and a player's salary the salary cap in 2021  

is roughly 4.7 times what it was in 1995. if we  multiply Jordan's salary by 4.75 then we should  

get a salary adjusted to the current NBA revenue  3 million 500 000 times 4.75 sixteen million six  

hundred twenty-five thousand and when we take into  account inflation that number becomes twenty eight  

million eight hundred ninety four thousand eight  hundred eighty two dollars and seventy one cents  

which is a very reasonable amount in hindsight  but when compared to other NBA players  

we begin to see the disparity there would  be exactly 30 players or 18 of the league  

making more money than MJ this NBA season with the  closest salary being 28 million 489 thousand 237  

and belonging to drumroll please Otto  Porter Jr wait that can't be right

apparently it's true Otto Porter Jr does make 20  million anyway my point is that NBA players today  

are making much more money from their NBA salaries  than the superstars of this league would have made  

25 years ago even when you account for the NBA's  tremendous increase in revenue this is because  

larger percentages of the league's revenue now  go into increased players salaries rather than to  

management team owners or development how about  the NBA compared to other professional leagues  

although the NBA is third in viewership worldwide  NBA players on average are the highest paid  

professional athletes in the world you hear it all  the time people will tell you that NBA players are  

overpaid compared to other professional athletes  often ignoring the number of games played  

size of the team career longevity as well as the  percentage of revenue that goes to the management  

and owners of the team so are NBA players  really overpaid or is it just a misconception  

before I answer the question i want to clarify  a few things firstly in this video I compare NBA  

players salaries to other professional athletes  not to other occupations like doctors firefighters  

or dentists because in that respect  NBA players are tremendously overpaid  

the only comparison i draw is across professional  sporting leagues like the MLB NFL or NHL  

secondly i only take into account players  salaries from their professional sporting  

leagues this excludes partnerships sponsors brand  deals or any other external source of profit  

with that out of the way here's a list of the  most profitable professional sports leagues  

in the world if you base  the list solely on revenue  

then the NBA would come in third and it's not  even close however we are forgetting a few things

keep in mind these leagues don't release  specific financial records these totals are only  

approximations of what professional sports leagues  disclose through posts articles and statements

the average nba team consists of 14 or  15 players the average nfl roster on the  

other hand consists of up to 53 players  the nfl has a maximum of 1 696 players  

or nearly four times as many as the nba which  is capped at an astonishingly low 450 players  

during the regular season in regards to the mlb  there's about 1 000 players with active contracts  

this also accounts for players on the injury  reserve list if you consider the revenue  

compared to the size of the team we begin to see  why nba players make significantly more on average

the second critical point that often goes  unnoticed is the longevity of a player's career  

some sports are more physically demanding than  others the average NFL player's career amounts  

to an underwhelming 2.5 years NBA careers  on average last 4.5 years and MLB players  

have the longest career average of 5.6 years keep  in mind the salaries that these players receive  

are likely their primary source of lifetime income  in an ideal system players would be paid relative  

to the physical demands of their sport NBA player  careers are close to double NFL players careers on  

average here's a chart comparing average salaries  per year and average career length in the NBA MLB  

and NFL interestingly the average NBA player is  paid close to 10 times the average NFL player  

although NBA players on average play  two more seasons the last and final  

piece to this puzzle is the percentage of  the league's money that's paid to players  

an organization could be making a hundred  million dollars but if management decides  

that player salaries are limited to only one  percent of total earnings it would not mean that  

another professional league making a similar  sum of money is overpaying their players by  

divvying the league revenue 50 50. revenue  is not always a direct indicator of salary  

because as mentioned before it depends on how  much the league decides to reinvest into players

the five main revenue generators are tv contracts  ticket sales merchandising brand sponsorships and  

team values or investments to understand the  dynamic between management and player salaries  

we need to take a look at the collective  bargaining agreement the CBA is a contract between  

the commissioner of the league and the NBPA  or the national basketball players association  

under the current CBA agreement which is set  to expire in 2023 50 percent of NBA revenue  

is reinvested into player salaries the other  half of revenue goes to owners the cost of many  

team-related expenses like hotels as well as other  expenses the NBA doesn't disclose to the public

this revenue-based salary system works  because revenue dictates salary cap  

and salary cap dictates the minimum  and maximum salaries establishing a  

direct link between revenue and how much  a team will spend on its players salaries

under the NFL CBA players receive 48 of  league revenue slightly lower than the NBA  

the NFL CBA also outlines an increased  revenue percentage of 0.5 to players  

if the league's tv revenue increases by 60 percent

according to espn lower earning players  which are roughly 60 percent of nfl players  

operate on minimum salary deals these players will  likely get the most significant bump and pay at  

least right in the beginning minimum salaries  are increasing by around 20 immediately the  

percentage of revenue nfl players will receive as  of 2021 sits at 48 or 2 percent lower than the nba

nothing much right well actually 2 percent of  the NFL's revenue accounts to an unbelievable  

305 million two hundred thousand dollars i've  supposedly lost revenue when compared to the NBA  

after hours of research and i'm not joking when  I say hours the MLB CBA is insanely confusing  

I came to the conclusion that the MLB pays  its players around 43 percent of revenue

when we take into account career longevity  revenue ratio which is the amount of money  

that goes to players and the number of players  in a given league the complexity of this  

comparison is put on full display here's a chart  recapping the information found in this video

the first chart compares the revenue ratio of the  three professional leagues discussed in this video  

the bottom line of the chart is adjusted earnings  which account for how much revenue players  

actually receive 43 percent of the MLB's  revenue is 4 billion 601 million dollars  

ranking the MLB second behind the NFL  in terms of how much money players earn

although the NBA makes close  to 2 billion less than the MLB  

the amount of money players receive in  both leagues is actually very similar

in the second chart I factor in  the amount of players in the league  

because obviously the more players the less each  individual player will receive the first row of  

the chart is the adjusted player revenue and the  last row is the adjusted player revenue when you  

account for the number of players the last row was  calculated by dividing the adjusted revenue by the  

number of players in a given league producing  a final total that gives us an idea of how much  

each athlete would receive from their league if  revenue was perfectly divided amongst players

as seen by this chart when you account for  the percentage of revenue given to players  

as well as the number of players in a given league  the NBA takes a convincing first place over the  

NFL and MLB in terms of projected player salaries  this is because the NBA has a significantly lower  

number of players. I decided not to include  career longevity into the final calculation  

because it's hard to quantify injuries  and average career length however it is  

important to keep career length in mind when  discussing how much players should be paid.  

Now to address the driving question of  this video drawing from the evidence  

you've seen especially the last chart  comparing league size and player earnings  

I can confidently say that NBA players are not  overpaid compared to other professional athletes  

thanks for watching I'd love to hear your  thoughts so leave a comment down below  

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