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What is the NBA Minimum Salary?

The National Basketball Association is a multi-billion dollar industry that generates revenue from all over the world. Players’ salaries, which can be compared with other professional sports associations, must be within the regulated maximum and minimum range due to the salary cap in place for players wages.

What is the NBA minimum salary? The minimum salary in the NBA starts from $925,000. This varies between players depending on the year the contract was signed and various other factors. Rookies taken later at the draft or who went undrafted often attract a lower salary than those who have significant experience or a better profile coming into the draft. The NBA minimum salary is governed by the salary cap rules, laid out following negotiations between the NBA owners and the NBA Players Association.

Based on years of service the minimum salary is different, 10 year veterans can attract the veteran minimum salary. For the 2021/22 season the veteran minimum salary is $2.6million. In the following article we will have a look at factors that surround minimum salaries as well as the recent situation in the Oklahoma City Thunder, that may mean players get an unexpected bonus!

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Rookies Have Lowest Salaries

Rookies, players without any prior NBA experience, have the lowest minimum wage. For example during the 2010-2011 NBA season, rookies were guaranteed to make at least $473,604, while 10-year NBA veterans were guaranteed a minimum wage of $1,352,181. As you can see when comparing this to the current figures above, the NBA has been prospering and players have been benefitting!

Any player who appears on the NBA roster, listed as active or inactive at least once in a season receives a full year of experience when it comes to contract status. So even if players aren’t taking part regularly in proper NBA games, the fact they are signed to a contract and listed on a roster means they gain experience when it comes to what money can be offered to them in the future.

Minimum Salary is Subject to Change

The minimum salary usually increases each year, as the total amount available in the salary cap goes up. This is due to the collective bargaining agreement that ensures the NBA players – who are the product the NBA sells across the world, receive their fair cut. While NBA players are boosted by a minimum salary, they are also capped by a maximum salary. This maximum salary, like the minimum, will increase as the player gains experience and accolades of their own. Specifically, the NBA’s maximum salary first increases when a player has six seasons of NBA service. The maximum salary will increase again when a player reaches the 10-year veteran maximum level.

The maximum salary in the NBA is determined by the larger of the two numbers. The first is the flat figure of the salary, and the second is the percentage of the salary. Beginning in 2005, players with six years of NBA experience no more than 25% of the NBA’s salary cap. Players with seven to nine years of experience could earn up to 30 percent of the NBA salary cap, while 10-year veterans could earn up to 35% of the NBA salary cap. The salary cap for 2021/22 season is set at $112.4million.

So while it is clear that the big stars earn drastically different amounts of money to the journey men trying to make their way in the league. The salary cap ensures that even the lowest paid player on an NBA roster earns a decent wage and has the opportunity to increase this, simply by sticking around on rosters.

Oklahoma City Thunder 2021/2022 Minimum Team Salary

The case of the Oklahoma City Thunder is interesting when we talk about minimum salaries. The team which had one of the best players in recent years, had a huge contract with Russell Wetbrook, are now in a different situation. As of this season, the highest-paid player in the team is  veteran forward Derrick Favors on $9.7million, followed by rookie guard Josh Giddey on $5.9million and then comes young star point guard Shai Gilgeous-Alexander on just $5.5million. This totals just 22% of the salary cap. So as you can imagine, they have a much smaller wage bill than a team like the Lakers who have Lebron ($41mil), AD ($35mill) and Westbrook ($44mill) all combined earning over $120million this year. These 3 players alone put the Lakers into the Luxury tax, earning a total that exceeds the salary cap on its own.

There is a rule in place to make sure that owners do spend a fair amount of money on the on court team. It is called the minimum team salary. For the 2021-22 season it is set at 90% of the Salary Cap, which is $101.173 million. As you can see from the screen shot from SPOTRAC.COM below the Thunder are going to fall around $10million short of minimum team salary.

This means that the Thunder are going to be subject to a penalty which means they will have to distribute the salary savings amongst it’s playing staff in order to comply with league rules. A nice little bonus for these hard working young players!

Salaries Have Changed Drastically

Salaries in the NBA today are larger than in past eras. Even taking into account inflation. In recent years, growth has been rapid. For example, in 2015, Anthony Davis signed the largest five-year contract in NBA history with the New Orleans Pelicans, worth $145 million. Russell Westbrook signed a five-year, $205 million contract with the Oklahoma City Thunder in 2017 and Steph Curry recently signed a 4 year extension worth $215 million setting a new record. The same can be said about minimum salaries that are increasing rapidly. The terms of the agreement are the same, but the salary is almost one and a half times higher. At the same time, dollar inflation for this period amounted to only 3%.

The rapid growth of minimum salaries is associated with the era of David Stern as Commissioner of the NBA (1984-2014). Stern has managed to make the league a global global brand. Capitalization has grown exponentially.

The legends of the 60s and 70s Wilt Chamberlain and Bill Russell received simply ridiculous money by today’s standards. The stars of the 80s, Magic Johnson and Larry Bird who re-ignited a failing league earned a little more. Even the great Michael Jordan earned just $33millon for his final year as a Chicago Bull, just a little more than the $31million Kevin Love is earning off the bench for the Cleveland Cavaliers this season.

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