Sorry guys, Carmelo Anthony did not get $62 million in advance

August 16th, 2014

(originally posted elsewhere)

For the most part, NBA players are paid on the first and fifteenth of every month, with a standard of 24 paydays per calendar year. Players earning more than the minimum can agree to 12 payments over six months or 36 payments over eighteen months, yet the norm is the norm.

There is room for some further deviation from these standards. Players can receive both advances on their salary, and receive loans from their teams.

There is not, however, room for the amount of deviation that is currently being reported in the case of Carmelo Anthony.

It is being reported in several places around the web, most notably (and I believe initially) the Wall Street Journal, that Melo received 50% of his new $124,064,681 contract in one up front payment. Admittedly, it is not so much expressly stated as it is implied that this is the case, but whichever it is, the idea it spawned that he will or might have already gotten $62 million is wrong. The confusion comes from a misunderstanding about how, when and to what degree NBA contracts can be advanced, a confusion I hope to clarify here.

The first and most important point to make is that salary for a future season can never ever be advanced. NBA seasons begin on July 1st and end on June 30th, so if it is October 6th 2014 and you want an advance on your 2015/16 salary, you are begrudgingly going to have to wait until July 1st 2015 to get so much as a piece of it. This rule alone is enough to show that the idea that Melo received a full 50% of the full life of the contract up front is false.

There is, however, a reason the story exists, for the 50% threshold comes from somewhere. What players earning more than the minimum can do is receive an amount for up to 50% of their annual base salary prior to the November 15th of that season. In practical terms, what that means is if you have a $12 million salary in one season, you can receive up to $6 million of it before November 15th, only 25% of which can be before October 1st. [For minimum salary players, change the 50% limit to a mere 7.5%.] When considering the the previous provision that no salary in future seasons can be advanced, we are now looking at a situation whereby the most a player can receive immediately upon signing a deal is 25% of the first year base salary. And that is considerably less than 50% of the whole shaboodle.

This, then, is what Carmelo did, and therein lies the confusion as to what that 50% designation means. He did not get 50% of his contract up front. He merely will receive some of it earlier than it could have been, in a series of advances stretching throughout the life of the contract.

This is not all that common, but is not unprecedent or rare. Many players – especially rookies on rookie scale contracts who almost always get at least something – have some money advanced to them, and some even have the full 50% designated in this way. As has been cited alongside the Melo story, his team mate J.R. Smith also has this full 50% advance stipulated in his contract, but so do others, including Pau Gasol’s new deal with Chicago, while Cleveland gave 50% advances to all three of LeBron James, Kyrie Irving and Mike Miller this summer. Chris Bosh’s new contract with Miami calls for a highly comparable 40% advance, should we wish to keep naming names. Of all the new contracts handed out this offseason, approximately 50 call for some sort of advance, and while some of those advances are a mere $50,000 or so, some are as big as it gets.

[It is possible that Melo did indeed get his $62 million in advance from a bank or private lender, I suppose. But that is not what was being discussed here, and certainly not what was reported. If this is true, this is coincidental.]

So no, Carmelo did not receive $62,032,340 of his contract up front. At most, he received $5,614,600. We generally do not talk about NBA player payment schedules because, unless you directly pay or receive the checks yourself, they do not matter significantly from the point of view of roster management. However, if we are to do it, we must do so properly.