A future NBA billionaire was just drafted. He’s the first of many more to come

Last month, as player after player crossed the stage at the 2022 NBA draft, the league ushered in another tranche of future stars and franchise bedrocks. It was also initiating a new generation of wealth across the sport.

While much was made of LeBron James’ ascent last month into the billionaire class, joining only Michael Jordan as current or former NBA players to reach that threshold, the NBA is about to start creating billionaires more rapidly. Starting with this rookie class, the NBA could start minting one or more possible billionaires each year. Any player who enters the league this year — from No. 1 pick Paolo Banchero to any undrafted player — could end up making more than $1 billion in just NBA contracts alone, and that player won’t have to be an all-time legend like James or Jordan to do it.

This development is a reflection of the money circulating around the league and doesn’t even take into account all the money players can make off the court, from shoe deals to other endorsements or their own investments.

The NBA had $8.892 billion in basketball-related income during the 2021-22 season and next season’s salary cap will exceed initial expectations. While stars like Damian Lillard and Nikola Jokic signed boffo extensions this offseason — Lillard agreed to a two-year, projected $120 million deal, while Jokic’s five-year extension is targeted at $260-plus million — there is much more to come, and that pool of money will become available to players who might not even be top-10 or -15 players in the sport.

“There’s just been this trajectory that’s been going on since the birth of professional sports, really,” Mark Bartelstein, a longtime NBA power agent, said. “Thirty years ago we said, ‘Oh my God, the contracts these guys are signing, we can’t believe they can make this kind of money.’ You’ve got generational wealth. Ten years later it’s, ‘I never thought contracts would get to this level.’ Five years ago we said the same thing and now we’re gonna say it again. It’s just a function of the economic system that drives professional sports.”

There will be consequences, too. With so much money sloshing around the NBA, it could change how players, especially stars, move around the league. It could change how fundamental relationships work within each franchise. It could change the arcs of a career altogether. But it’s hard to say how just yet.

What’s clear is that a future billionaire basketball player might have just been drafted.

To get there, it would take signing max extensions or contracts at every turn. The current collective bargaining agreement allows a rookie to sign an extension that kicks in during year five and can be worth as much as 30 percent of the salary cap if the player hits the criteria under the designated max rules. Veterans can earn 35 percent of the cap under a few options. The 2017 collective bargaining agreement also prolonged the window for stars to get paid with the Over-38 rule, which highlighted the lengthening of star careers since that CBA bylaw began as the Over-35 rule in 1995.

Salaries are large now for the NBA’s stars and they will continue to rise to even larger levels. It will no longer take a career like James’ to make enough for multiple generations of wealth (James’ career earnings to date: $387 million, according to Spotrac). It may take being just a consistent All-Star but not an all-time great to get there — think Donovan Mitchell, not Kevin Durant.

Even using conservative estimates — just five-percent annual jumps in the cap — a player drafted in 2022 could get to a billion dollars in contracts alone. A player drafted this year would make roughly $144 million over the first three years of his designated max extension, and then could sign another extension. In 2032, with a projected salary cap at about $200 million, he could sign a five-year, $403 million deal. When that contract runs out, there could be another three-year, roughly $287 million deal waiting.

That could be on the low end of the projected scale. The 2025 cap could spike dramatically; that’s when the new media rights deal will kick in. The NBA could sign a new TV deal for as much as three times its current size.

“I think there’s going to be a huge jump,” Bartelstein said. “The NBA is as hot as can be and everybody wants a piece of it. People can’t get enough of it.”

Agents are already expecting that to impact the league dramatically, though no one is willing to attach a number to what the 2025 cap may be. The NBPA opted against cap smoothing in 2016, the last time a new media rights deal kicked in, and there was a 34 percent increase in one offseason.

But even without that kind of tremendous leap, the cap could grow at an even quicker pace than those timid expectations. It jumped roughly 10 percent this summer into the 2022-23 season. Over the last decade, the 2014, 2015, 2017 and 2019 offseasons have seen the cap increase by more than five percent. The cap was $58,044,000 for the 2012-13 season, it will be $123,655,000 in 2022-23.

Aside from the TV money (or streaming money), increased immersion into sports gambling could bring an infusion of cash into the league. As could new sponsorship opportunities — the NBA added marquee items like jersey patches in recent years. Expansion continues to loom over the league’s future. That would increase the pot of money available to players by even larger sums, with players guaranteed 49 to 51 percent of BRI under the current collective bargaining agreement. (Owners aren’t struggling either, taking their share of the BRI and seeing franchise valuations skyrocket, which are excluded from revenue sharing.)

“There used to be this saying: you could take care of yourself after the first contract, you can take care of your family on the second, you can take care of three generations on the third,” Joe McLean, a financial life manager to NBA stars like Klay Thompson, said. “We only need two now.”

Nine players made $20 million or more during the 2015-16 season, with Kobe Bryant topping the list at $25 million. Ten players are already set to make more than $50 million during the 2025-26 campaign. Steph Curry is scheduled to earn $59.6 million that season — or more than the payrolls of the Hawks, Suns, Nuggets, Bucks and 76ers in 2014-15.

A player could make $100 million in one season much sooner than anyone believes.

To make a billion dollars in NBA contracts alone, a player would have to be very good early and play late into his 30s. That will weed out a lot of players. Over the last six years, since the 2017 CBA went into effect, 18 players have signed max rookie extensions, or an average of three per rookie class. But those who get the max extension after their rookie deals are well-situated to keep following up with more max deals, as long as injuries don’t get in the way, and sometimes even when they do.

With that much money available to players, it will put an emphasis on wealth retention for everyone from their agents to the NBPA. Chrysa Chin, the union’s chief player engagement officer, said she foresaw a time like this coming one day but it will mean an impetus for more financial education and support for players.

“There’s opportunity for everyone now, and we watch the evolution of the game and the evolution of the revenue that’s generated from the game,” Chin said. “So the important thing becomes the education piece, right, the literacy piece. How are we talking to our players about wealth, and wealth preservation and generational wealth? That’s the key.”

McLean said he has worked on more than $3 billion salaries and the basics do not change. He preaches the same steps no matter how much each player is making. He tells clients to put a percentage of money into a safe and secure bucket, a percentage into a growth bucket and lastly into a dream bucket. Bartelstein reiterated the importance of having trustworthy people around to help manage the player’s money.

Counterintuitively, McLean said the increase in potential career earnings should make players more risk-averse than ever.

“A saying I try to use all the time is ‘with great abundance comes less discipline.’ Right?” he said. “And so with this amount of an abundance, you’ll see less and less discipline take place, because it’s so much, it’s so fast and you feel inevitable that it’s good to keep coming. And so that’s my lesson is, because of that, you have to become even less risky, but more disciplined and hyper-focused on the people around you.”

With salaries entering another stratosphere, it also could have an impact on the way the league functions. Will more money make stars more or less likely to change teams? Lately, big-dollar extensions have cannibalized free agency and slowed down star player movement since 2019. Bartelstein believes the economics will always matter most in contract decisions.

McLean thinks this much money could fray the power dynamics in every franchise between players, coaches and governors.

“You’ll have players that own professional teams outside of their own sport while they’re playing; that was unheard of,” he said. “There’s a lot of guys that own professional teams, but the power and money dynamic was just far earlier than ever and you will not have had to win championships. In the past, people made a lot of money, but usually it’s the ones that had a lot of success on the court that earned the majority of the money. Now you’re going to have this power dynamic at a very, very young, early age that probably over time will affect the relationships between the coaches and the ownership.”

There is one thing that everyone makes clear: the amount of money in the NBA will continue to increase and it’ll be normalized, just as it has ever been.

Chin, who worked at Nike and the NBA league office before the NBPA, said she always saw the age of the basketball billionaire coming. Bartelstein thinks it’s just the natural flow of the value the NBA and its players drive. Content is king, and the NBA provides it by the tonnage for the entertainment industry.

The sticker shock will eventually dissipate, but the billionaire basketball players will grow in number.

“That’s where we’re heading now,” Bartelstein said. “And in 10 years we’ll probably shrug our shoulders.”

(Top photo from 2022 NBA Draft: Brad Penner/USA Today)

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