Here’s Why Giannis Antetokounmpo Lost More Than $ 25 Million From Super Max Contract Due To COVID-19 Fallout

Giannis Antitecmonmo He would be a very rich man. On Tuesday, back-to-back MVP signed the largest contract in NBA history, a five-year Super Max arrangement that will keep him in Milwaukee for at least the 2024-25 season. The deal is worth more than $ 45 million annually, making him the highest-paid athlete in team sports in North America by average annual value, and every penny in the deal is guaranteed. Antetokounmpo is set for life.

However, he would have been richer had it not been for the coronavirus pandemic. This is because of the unique rules that govern maximum contracts in basketball. The cap is not a dollar number. It is a percentage of your maximum salary. When a player signs a maximum extension like this one, the dollar numbers are left blank until the maximum season in which the deal begins is determined. The cap itself is usually determined by revenue, and the pandemic severely limits this revenue. As a compromise, the NBA and NBPA settled on a pre-set cap number for this season, $ 109,140,000, which was also used last season. Going forward, the cap will grow between three and 10 percent annually depending on how much revenue the league is generating.

This is where the $ 228.2 million figure likely comes from. A three percent increase over the $ 109,140,000 cap comes out to $ 112,414,200. Since revenues are expected to be relatively low this season, this is the maximum expected for next season, when Giannis’ new deal kicks off. With MVP awards making him eligible for designated Veteran Status, his new deal starts at 35 percent of that maximum figure, growing eight percent annually. Add all of that and you get $ 228.2 million.

Again, this number is fixed. If the fans are able to return to the arenas sooner than expected, the league may be able to generate more revenue than it expected. In best-ever scenario, the cap would go up 10%, to $ 120,054,000. In this scenario, Giannis would receive more than $ 15 million over the term of his contract.

However, this scenario is seen as extremely unlikely. The teams operate with a maximum forecast of $ 112.4 million, which is the $ 228.2 million value associated with the Giannis contract. Chances are overwhelmingly that this is what he will do. It’s just not what he would have done had the pandemic been avoided.

In September of 2019, Shams Hirsutism Athlete It reported that the NBA expected a salary cap of $ 125 million for the 2021-22 season. Had that been the case, Antetokounmpo’s initial contract numbers would have been staggering.

To put this in perspective, remember that just two decades ago, Alex Rodriguez signed the biggest contract in sports history with $ 252 million over 10 years. Not only would this contract exceed the total value of that contract, it would have done so in several half-years. It would have paid Giannis more than $ 50 million a year, and because the maximum single player’s salary is never less than 105 percent of his previous salary, it would have made him earn more than $ 60 million for the 2026-2027 season if he was productive enough to drive This much. For a player to reach this salary organically, the cap must increase to more than $ 171 million, a 57% jump from their current level.

Based on these numbers, we can expect the epidemic to cost Giannis at least $ 25,549,180, the difference between the $ 253,750,000 figure and the $ 228,200,820 he expects to actually get. Qualification “at least” is necessary there because there is another salary limit that we need to acknowledge, even if we can’t specifically define it: the guarantee.

Under normal circumstances, 10 percent of players’ salaries are kept in an escrow account each season. This is done as a precaution in the event that players’ salaries exceed 51 percent of basketball-related income they are entitled to. If players win a lot in a particular season, owners can recover a portion of it, up to 10 percent per player. Owners seldom need to use this option, and when they do, it is not a full 10 percent option.

But the league estimates indicate that 40% of BRI comes from fans attending matches in the arenas. That revenue is, for now, lost, which means the property will almost certainly get the guarantee money back. It’s not going to be down to 10 percent either. Due to the unique conditions surrounding this season, players and owners have agreed to a number of adjustments. First, in order to cover revenue losses, the guarantee strike can be spread for any one season across several years (up to the next two years after that). Second, the maximum blocking limit for any one season is now 20 percent.

There is no guarantee that the league is actually withholding 20 percent of players’ salaries, but let’s imagine a terrifying scenario in which so much revenue is lost this season that it becomes necessary for the next two campaigns. It would cost Giannis another $ 16,367,507, which reduced the amount he received to about $ 212 million in this new deal.

Once again, those numbers have yet to be finalized, and again, Giannis will be making a lot of money regardless. But the amount he will lose due to this epidemic is huge. Players like Magic Johnson, Larry Bird and Karim Abdul-Jabbar have never earned $ 40 million in their entire careers. Now, Giannis is about to lose a lot of one decade due to the Coronavirus.