NBA owners intended last season's lockout to reduce player salaries and increase parity between small- and large-market teams. While overall player costs are down, the stars are still raking it in. The NBA's 10 highest-paid players will collectively earn $340 million this year alone through salary and endorsements, with big-market players dominant: Seven of the top 10 suit up in New York, Los Angeles or Chicago, while two others hail from sunny, no-income-tax Miami.
The NBA's highest-paid player is Kobe Bryant, who will make $59.8 million in salary and endorsements this year. Bryant's Lakers salary of $27.8 million is $7 million higher than any other player's. The NBA's collective bargaining agreement limits individual player salaries to 35% of the team salary cap, which is $58 million this year. But players can also sign deals that are 105% of their previous salary even if it exceeds the cap. Bryant is an exceptional case because he is in his 17th season with the same team at 34 years old and is still playing at an exceptionally high level. The result: Bryant has signed a series of maximum level contracts with the Lakers.
Bryant, who was voted this month to start in his NBA-record 15th All-Star game, is a popular corporate endorser, earning an estimated $32 million annually off the court from partners Nike, Coca-Cola (he plugs Sprite), Turkish Air, Mercedes-Benz and memorabilia firm Panini. Nike provides the bulk of his sponsorship income. Bryant is a hugely popular figure in China, where Nike is looking to make further inroads. Nike sells twice as many of Bryant's sneakers in China as in the U.S., according to sources.
LeBron James of the Miami Heat ranks second with annual earnings of $57.6 million. James accepted a smaller contract ($17.6 million this season) to sign with the Heat than what the Cleveland Cavaliers offered when he left the Cavs in the infamous 2010 "Decision." Florida offered a lower state tax rate and the Heat provided a clearer path to an NBA title.
James had a historic 2012 when he led the Heat to the NBA title and the U.S. men's Olympic team to the gold medal in London. Along the way, he was awarded the MVP award for the regular season and the NBA Finals. Michael Jordan is the only other player to nab the four honors above in the same year.
James' memorable 2012 has helped dissipate much of the fallout from his departure from the Cavs. The NBA announced in November that James had the league's best-selling jersey. He is the NBA's top pitchman, earning $40 million annually off the court. His sponsors include global titans Nike, Coca-Cola, Samsung and McDonald's. Audemars Piguet, Dunkin' Donuts, State Farm and Upper Deck are also part of James' endorsement portfolio.
Derrick Rose clocks in third with earnings of $32.4 million. Rose's income skyrocketed this season in the first year of his five-year, $95 million contract extension with the Chicago Bulls. The point guard also kicked off his new 13-year, $185 million Adidas deal.
Adidas is fighting an uphill battle in the U.S. in basketball. Nike, including its Jordan Brand subsidiary, is the dominant basketball shoe company in the States with a 92% market share, according to SportsOneScan, which tracks sports shoe and apparel sales. Adidas is at 5.5% in the U.S.
"Today's athletes do not provide the ROI in terms of footwear sales," says SportsOneScan analyst Matt Powell. "However, athletes like Lebron and Rose have become more than just shoe endorsers, and act as the face of the brand, which amortizes some of the huge contracts."
The popularity of U.S. hoops is only part of the story. The NBA is soaring in China, helping players land lucrative deals with shoe, beverage and car companies, as the brands fight to expand their reach in Asia. There are 300 million basketball players in China, according to the Chinese Basketball Association. Chinese companies are also tapping NBA stars for endorsement deals. Chinese athletic apparel firm Li-Ning signed Dwyane Wade in September to a long-term deal, worth an estimated $10 million annually. Wade ranks fourth among the highest-paid players with earnings of $30.2 million.
Two of Bryant's teammates also made the cut. Dwight Howard is No. 8 with earnings of $26.5 million. Howard was once one of the NBA's most marketable players, but his prolonged messy exit from the Orlando Magic damaged his endorsement potential. Coca-Cola and McDonald's both choose not to renew sponsorship deals with Howard in recent years. Lakers' forward Pau Gasol ranks 10th thanks to $21.5 million in income this season, largely driven by his $19 million playing salary.