Ricky Rubio
A lot has been made about the Timberwolves first pick in the 2009 draft. Some people believe Ricky Rubio is the second coming of basketball Jesus; others aren’t so sure. I’m caught somewhere in between on the issue. While I do think Rubio will be a good NBA player, I’m not sure he is going to be a superstar. Admittedly, I really don’t know much about the kid. I know he is 18, he has been playing pro ball in Europe since 14, he played well in the Olympic gold medal game, and he has a four minute highlight reel on youtube. Based on this, the jury is still out in my mind, but I was still looking forward to seeing Rubio in a Wolves jersey opening day.
There are several things that may prevent Rubio from signing with the Wolves this year, but let’s put aside all of those outside factors (family, weather, etc), and focus on the finances of Rubio coming to the NBA.
Mac broke down the numbers using this set of criteria.
Following the rookie salary scale and NBA salary cap, below is the money Ricky Rubio can expect to make by executing the options available to him over an eight year period. This breakdown assumes that Rubio will get a max contract after his fifth year and that a Euro team would pay him 3M per season in addition to buying out his contract in full, an action that NBA teams are restricted from performing
The two adjustments I am going to make in these calculations involve US taxes, and commissions paid to Rubio’s agent. In Europe, the club covers both of these expenses, and the player nets his entire salary. Therefore, using Mac’s figures, this is how I breakdown the dollar figures:
2009, 2010, 2011, 2012, 2013, 2014, 2015
Signs with MN this year
$3.3M, $3.5M, $3.8M, $4.8M, $6.3M, $9M, $11M, $11M = $52.7M gross, all taxable.
Commissions to agent: $5.27M
Taxes, state and fed, conservatively calculated at 40%: $21.08M
Buyout: $6.1M
Net money: $20.25M
Waits one year
$100K, $3.3M, $3.5M, $3.8M, $4.8M, $6.3M, $9M, $11M = $41.7M gross, $41.6M taxable.
Commissions: $4.16M
Taxes: $16.64M
Buyout $6.1M
Net: $14.8M
Waits two years
$100K, $100K, $3.3M, $3.5M, $3.8M, $4.8M, $6.3M, $9M = $30.9M gross, $30.7M taxable.
Commissions to agent: $3.07M
Taxes: $12.28M
Buyout: $0
Net: $15.55M
Signs 3 year contract with Euro team, including full buyout
$3M, $3M, $3M, $3.3M, $3.5M, $3.8M, $4.8M, $6.3M = $30.7M gross, $21.7M taxable.
Commissions to agent: $2.17M
Taxes: $8.68M
Buyout: $0
Net: $19.85M
Signs 4 year contract with Euro team, including full buyout
$3M, $3M, $3M, $3M, $3.3M, $3.5M, $3.8M, $4.8M = $27.4M gross, $15.4M taxable.
Commissions to agent: $1.54M
Taxes: $6.16M
Buyout: $0
Net: $19.7M
What if the same team that employs Josh Childress, decides to buy Rubio from DKV, and offer him a similar deal at 3-years/$20M?
$6.7M, $6.7M, $6.7M, $3.3M, $3.5M, $3.8M, $4.8M = $35.4M gross, $15.4 taxable.
Commissions: $1.54M
Taxes: $6.16M
Buyout: $0
Net: $27.7M
Obviously, the buyout is a major sticking point in these negotiations. If Rubio’s agent cannot get the buyout reduced, and Rubio decides to come to the NBA, he won’t be playing for free for only two years. In order for Rubio to reach the breakeven point, he’ll need to earn $12M dollars in the NBA. He won’t cross that threshold until the 4th year of his rookie contract. A lot can happen in four years, and unless Rubio can avoid injury, and become the superstar many expect, he may not have a lot of earning power left in the NBA, and that is a big gamble. By staying in Europe, he can’t avoid the injury concern, but he can improve his game, look great playing against inferior talent, all while he is collecting serious money. By the time he is ready to come to the NBA in 2012, a new collective bargaining agreement may be in place, and the rookie contract numbers may be higher. Based on salary figures alone, it seems advantageous to stay in Europe, and not pay DKV’s buyout.
Now, let’s take a look at the marketing aspect of this whole thing, because this is where the rubber is going to meet the road. Mac has shown that the size of the player’s market doesn’t really matter when it comes to marketing dollars, and I believe that to be true. The best gauge for marketability is a player’s appeal to the market demographic. I’m not sure Rubio has the charisma of Lebron James, or a Peyton Manning, but I do think he could be similar to Dirk Nowitzki.
On the list of 25 highest paid athletes, 13 were basketball players. Of those 13 basketball players, only Lebron made more money in endorsements, than he did in salary. Technically Durrant made more in endorsements than salary, but $12M of his $21.65M came from a one-time signing bonus. The same is true with Dwight Howard’s endorsement figures.
The list Mac referenced did not include international players, but Dirk Nowitzki was the highest paid European player on the international list. Based on that, and for comparison sake, let’s use Nowitzki as a model for what Rubio can accomplish in the marketing arena. In 2008, Nowitzki made a total of $20,360,095, of that $16,360,090 was salary. This means that Nowitzki pulls in about $4M a year in endorsement dollars. Now, if Rubio can lock down a similar deal, and receive a sizeable signing bonus, he could make the jump to the NBA, no problem. Here is a plausible scenario:
Signs with MN this year, and gets a shoe contract
Salary: $3.3M, $3.5M, $3.8M, $4.8M, $6.3M, $9M, $11M, $11M = $52.7M.
Signs a contract with Nike: Averaging $4M a year, with an $8M signing bonus = $40M.
Commissions to agent: $9.27M
Taxes: $37.08M
Buyout: $6.1M
Net: $40.25M
Suddenly, coming to the NBA makes a lot of sense financially. The buyout can be covered with endorsement money, and the salary goes into Rubio’s pocket right away. However, without some significant marketing dollars, Rubio will be financially compelled to stay in Europe for a few more years. If I were Rubio’s agent, I’d spend less time trying to scare everyone, and I’d be on the horn with Nike and Adidas, trying to lock down a shoe deal. In the mean time, Rubio could start to speak publicly about how excited he is to come to Minnesota and help build a winning franchise, and repair some of the PR damage that has been inflicted since draft day.
Filed under: Minnesota Timberwolves, NBA, NBA Draft | 1 Comment
Tags: Dirk Nowitzki, DKV Joventut, endorsements, Minnesota Timberwolves, NBA, Nike, ricky rubio
Will an athlete who signs with the New York Knicks make more money in endorsements than an athlete who signs with the Oklahoma City Thunder? Does the size of the media market an athlete plays in correlate to the amount of endorsement dollars said athlete brings in? The answer, statistically, is no.
Recently drafted top athletes often express, through the demands of their agent, that they do not want to play in certain small media market cities like Oklahoma City (#36), Memphis (#48), and Portland (#25). Agents get a cut of both the athletes salary and endorsement deals. Since a recently drafted athlete’s salary is slotted or fixed, the only way for an agent to increase income is to maximize endorsements. It seems reasonable to expect more endorsement money while playing for a media market with 30 million televisions, as opposed to a media market with 300,000. As reasonable as this seems, it’s just not accurate.
Let’s dig into the data. I’ve compiled the top 25 money making professional athletes competing in team sports and correlated their endorsement wages against the size of the media market they play in. The results indicate that there is a slight negative correlation between media market size, and the amount of endorsement dollars an athlete collects. The graph below shows a -.27 correlation coefficient. A negative correlation in this data set means that an athlete is more likely to cash in on a small market team. But the size of the coefficient, .2, really just indicates the data is pretty scattered and that there is no real statistical relationship between the two variables.
With all of this stated and explained, the city you play in has nothing to do with the amount of commercials you get booked for. Not sure you believe that, just ask three athletes from small markets, Lebron James (15), Peyton Manning (24), and Kevin Durant (36). All three play in very small market cities, two of which are actually shrinking, and yet, these three athletes pull in a combined yearly total of 63M in endorsements. But what about all of those NYC athletes raking in that Cats Broadway money? Well, Alex Rodriguez and Derek Jeter would kill to make some of that Kevin Durant Oklahoma City money. These two Yankees make a combined 14M in endorsements.
So what factors are operative in determining how much money a player brings in for endorsements? My guess is team winning percentage, titles, and an athletes looks and overall charisma are the main factors. Tim Duncan makes a pittance in endorsements, not because he plays for the small market Spurs, but because he’s the most boring person on earth. Ben Rothlisberger is also a winner from a small media market, but this two time Super Bowl winner only makes 2.5M in endorsements. Is this because Pittsburgh doesn’t have too many people watching TV, or is it because Ben’s looks are becoming a real problem. My guess is the latter.
Filed under: Sports Marketing | Leave a Comment
Tags: alex rodriguez, ben rothlisberger, correlation coefficient, derek jeter, endorsements, kevin durrant, lebron james, marketing, media markets, memphis grizzles, NBA, New York Knicks, new york yankees, oklahoma city thunder, peyton manning, portland trail blazers, san antonio spurs, Sports Marketing, statistics, tim duncan
Ricky Rubio Money Breakdown
Ricky Rubio
The Minnesota Timberwolves have drafted the most exciting player to enter the NBA since Allen Iverson. All that stands between Ricky Rubio and the Minnesota Timberwolves is a 6.7 million dollar buyout owed to his current team DKV Joventut, to negate the final two years of his contract. Several lawyers have speculated that Rubio’s contract is not binding, but for the purpose of this article, we will assume that the contract Rubio signed when he was 14 is legitimate.
Following the rookie salary scale and NBA salary cap, below is the money Ricky Rubio can expect to make by executing the options available to him over an eight year period. This breakdown assumes that Rubio will get a max contract after his fifth year and that a Euro team would pay him 3M per season in addition to buying out his contract in full, an action that NBA teams are restricted from performing.
Buyout, 2009, 2010, 2011, 2012, 2013, 2014, 2015
Signs with MN this year
-6.1M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M, 9M, 11M, 11M = 46.6M
Waits one year
-6.1M, .1M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M, 9M, 11M = 35.7M
Waits two years
0M, .1M, .1M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M, 9M = 30.9M
Signs 3 year contract with Euro team, including full buyout
0M, 3M, 3M, 3M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M = 30.7M
Signs 4 year contract with Euro team, including full buyout
0, 3, 3, 3, 3, 3.3M, 3.5M, 3.8M, 4.8M = 27.4M
A few caveats, this analysis does not take into account marketing or taxes. Rubio will make less money in the NBA because of taxes, but more from marketing. Teams in Europe pay the income tax of their players, whereas it’s the players responsibility in the NBA. Rubio will have to pay federal income tax, plus state income tax in EVERY NBA city he plays in, including 41 games in MN, which has a very high state income tax. From a marketing perspective, Rubio can expect to make substantially more in the NBA, regardless of which team he plays for, but I will leave that breakdown for a future post.
Even with the tax and marketing voids, it’s clear that Rubio should sign with MN yesterday. Waiting a year, his second best option, basically lops off 11M in salary made over an 8 year period. Ricky Rubio is going to lose money every additional year that he doesn’t sign with an NBA team.
Above are the only viable options for Ricky Rubio. Small market teams, and labeling Minnesota a small market is not entirely accurate, are used to hearing rumors that their best players will be traded to New York, Miami, or Boston every day. Reporters have to write something, and speculating that every NBA star is about to be traded to the Knicks for a few overpayed role players, certainly sells papers. But that’s not how the NBA works.
First, Minnesota owns Ricky Rubio’s NBA rights indefinately. He cannot sit 2 years in Europe and then play for the Heat. Second, these large market teams do not have the assets to trade for a player such as Ricky Rubio, even if he was on the market. The Timberwolves have the exclusive rights to Ricky Rubio for the first five years of his NBA career, and they have these rights pretty cheap. Giving up five years of a player in his prime over an 18M contract just isn’t going to happen, no matter how much smoke the media, Rubio’s agent, and even Rubio himself blows.
With all of this said and analyzed, it’s clear that Ricky Rubio will be a member of the Minnesota Timberwolves organization for the 2009-2010 season, and if we’re lucky, for the duration of his career. The New York Knicks would be best served saving up for the NBA free agent class of 2014, as that’s going to be their only legitimate shot at signing Ricky Rubio.
Filed under: Minnesota Timberwolves, NBA Draft | 8 Comments
Tags: allen iverson, body armor, Boston Celtics, brandon jennings, david kahn, DKV Joventut, Miami Heat, Minnesota Timberwolves, NBA, nba salary cap, New York Knicks, ricky rubio
Gregg Parini Spit in my Lane
When it comes to division III college swimming, Kenyon College is the undisputed evil empire. Kenyon, coached by Jim Steen, has won 30 straight men’s titles, an unprecedented feat in all of college sports.
Like a big brother who beats up on his siblings, Kenyon College has dominated division III swimming from birth to adulthood. When discussing division III swimming, there is Kenyon College, and then the rest of the field. This disparity of talent, and ultimately, success, has led to a large degree of animosity directed towards the swimmers at Kenyon College.
In division III swimming, you are either with Kenyon, or against them. Proponents of Kenyon College, mostly alumni, will tell you that Jim Steen is the most influential person in their lives. Opponents of Kenyon College, mostly those schools competing against Kenyon, tell stories of arrogance, disrespect, and spite.
If Kenyon College is the evil empire, then former captain, Gregg Parini is Darth Vader. Parini used to show his respect for competing swimmers, by spitting in their lane prior to the race. Not only would the swimmer get to dive into Parini’s fluids, but they would also get to swim through it on their way back to the wall. This tradition, started by Parini, remains prevalent at Kenyon College, through Steen’s stewardship, and has even migrated to another elite Ohio college, Denison University, where Parini is now coach. One former Kenyon swimmer, while defending Steen, had this to say about Parini.
Parini, though generally well-liked by teammates, was certainly a prima-donna and acknowledged asshole. I share the story about spitting because I think it underscores my own impression that this is not a Kenyon thing but, instead, something that assholes do.
Most collegiate swimmers would be more comfortable giving their competitors high-fives than spitting in their lane. And this is true for college athletics in general. Is the legend of Gregg Parini giving Kenyon a black eye, or is Jim Steen’s tolerance of this behavior indicative of an even bigger issue, a culture of arrogance? The same former Kenyon swimmer, who lists Jim Steen as the most influential person in his life, further defended Steen’s practices,
My own experience is one in which Steen preached and modeled respect for opponents, particularly those most competitive with us, by applauding and frequently commenting on performance he thought of as particularly excellent or courageous. In terms of Steen allowing Parini to behave like this, he often refers to sprinters, for example, as the alpha-males and recognizes that they may need a little more room to preen and strut than others, who may not need to do all this in order to maximize their potential.
Although having a Kenyon swimmer spit in your lane is pretty egregious, it’s not the most arrogant tactic of Kenyon College. Kenyon College has won 30 straight d3 swimming titles. At the end of the nationals meet, Kenyon counts off each of their victories, 1, 2, … 29, 30, … 31. And then a big cheer. The problem is that Kenyon College has not won 31 titles. They have won 30, but for the last ten years or so, they have been counting next year’s victory, as well, because to them, it is a foregone conclusion. To the other 100 or so division III swimming programs who hope to one day win a national championship, it is another slap in the face. When asked about this tradition, a former swimmer who at the time was wearing a shirt that read “If you want to beat Kenyon, you better get a canoe” said, “That’s just what we do.”
For every negative story about the Kenyon swimming program, there are ten stories that make many former swimmers wish they had trained with Steen at Kenyon College. If swimmers share a common goal, it’s getting faster. And Jim Steen, without question, makes his swimmers faster. No current or former Kenyon swimmer exemplifies this as much as Josh Mitchell, 2008’s national swimmer of the meet.
I met Josh Mitchell at a bar at the University of Minnesota. He was drinking beer from a pitcher, and telling me the mechanics of why Jim Steen is so successful. Josh Mitchell did not come to Kenyon as an elite swimmer. Josh was a 22.8 in the 50 free, a 49 in the 100 free, and a 55 in the 100 back. Most high school swimmers at this level do not swim in college, much less, for the most successful program in collegiate history. But that didn’t stop Josh Mitchell from attending Kenyon, and it didn’t stop Jim Steen from working with him. After four years of grueling practices, technique and motivational work, Josh dropped to a 20.0 in the 50 free, a 44.3 in the 100 free, and a 48.6 in the 100 back. Josh started out as the worst swimmer at Kenyon College, and ended up the best. Josh credits Jim Steen for his massive improvement.
As rare as dropping 3 seconds in the 50 freestyle is, it’s commonplace at Kenyon College, and is why Kenyon routinely out-recruits its competition nearly every year. As an Emory coach told one recruit who was choosing between Kenyon and Emory, “Do you want to dethrone the king, or do you want to be the king”. The recruit, ultimately, chose Kenyon, and helped the Lords win four more NCAA titles.
A current MIAA coach said this about Steen and Kenyon’s program.
It’s not good enough to out-recruit Kenyon College. You also have to out-improve them, because Steen is going to take a group of good swimmers and make them great. And he’s going to do it every year.
Swimmers are a very cliquish group. Swimmers at Kenyon College take swimming to another level, and become engrossed in it, often at the expense of the normal collegiate experience. While their peers are attending weekend keggers and socials, Kenyon swimmers do not drink in-season. One former recruit, who ultimately chose Emory University, had this to say about his recruiting experience at Kenyon.
The guys on the team, instead of going out and partying like people do on recruiting visits, watched Lord of the Rings with all of the lights off. I went to Emory because it was pretty much the opposite of Kenyon. Big city, cute girls, good coach, and fun kids that know how to party.
After the NCAA meet, most swimmers have had enough of the grueling sport, and take a few months off. Kenyon swimmers, routinely, get up the next morning and try to break more records. The most famous of these post-NCAA swims was made by Kenyon legend, Read Boon. Supposedly, Boon, who won several individual titles during his career, told 2001’s NCAA 1650 champ, Michael Bonomo, that his time in the 1650 was slow, and that he (Boon) could beat it. The following morning, Boon and his teammates setup the touch pads, and Boon set a new Flickinger Aquatic Center pool record, going a 15:10 in the 1650 free, besting the NCAA record, and beating Bonomo’s championship time by 30 seconds.
Another post-NCAA Kenyon tradition, has the top 4 graduating seniors consume a case of beer, and then attempt to break the pool record in the 800 freestyle relay after the NCAA meet. Says one Kenyon alum, the record gets broken more often than not.
As polarizing as Kenyon College swimming is, you certainly can’t argue with the results and folklore; and you certainly can’t argue that Jim Steen is one of the most successful coaches in NCAA history, in any sport. For those student-athletes who eat, drink, and breathe swimming, I couldn’t imagine a better place to spend four years than Kenyon College. For the rest of us, well, we would just like Gregg Parini to stop spitting in our lane.
Filed under: Swimming | 3 Comments
Tags: d3 swimming, denison swimming, denison university, emory swimming, emory university, gregg parini, jim steen, kenyon college, kenyon swimming, ncaa swimming, Swimming
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