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Volume 22 No. 43
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Cloud Nine-Figures: Why membership in the exclusive $100 million club has exploded, especially for MLB and NBA players

In March the Los Angeles Angels gave two-time American League MVP Mike Trout the largest contract ever in North American sports, a 12-year deal worth $426.5 million.
Photo: Getty Images
In March the Los Angeles Angels gave two-time American League MVP Mike Trout the largest contract ever in North American sports, a 12-year deal worth $426.5 million.
Photo: Getty Images
In March the Los Angeles Angels gave two-time American League MVP Mike Trout the largest contract ever in North American sports, a 12-year deal worth $426.5 million.
Photo: Getty Images

Once a rarity, the number of playing contracts worth $100 million or more has exploded in recent years, especially in basketball.

 

In the past three years, 46 nine-figure NBA contracts, with a total value of nearly $6.5 billion, have been signed, based on exclusive SBJ research. Since 2016 in Major League Baseball, 21 such contracts have been negotiated, with a total value of $3.5 billion.

All told, those two leagues alone accounted for about $10 billion in playing contracts during that period.

The NFL doesn’t have guaranteed contracts like the NBA or MLB, but that league also has seen an increase in nine-figure “maximum value” contracts in the same time period.

The trend among the leagues is fueled by soaring revenue, with skyrocketing media rights deals the biggest accelerator. Collective bargaining agreements spell out how that revenue can be divided.

David Falk
David Falk
David Falk

“People were stunned” in July 1996, agent David Falk said, when he negotiated the first two $100 million contracts in North American sports history, landing client Alonzo Mourning a $105 million deal with the Miami Heat and Juwan Howard a $101 million contract with the Washington Bullets.

Now, “A hundred million dollars today doesn’t mean very much,” he said.

In fact, a total of 203 contracts with a maximum value of $100 million or more have now been signed. MLB leads the way with 86, followed by the NBA (73), NFL (39) and NHL (5).

NBA

The biggest increase in nine-figure deals in recent years has come from the NBA. In the history of that league, 63% of its nine-figure contracts were negotiated in the past three years, SBJ research shows. 

This calendar year alone, 18 of those $100 million deals were signed, a record for any pro sports league. The previous high mark for a single year was 11, achieved twice by MLB in 2012 and 2014, and by the NBA in 2016 and 2017.

NBA agents point to the rise in basketball revenue, which in turn increased the salary cap. Under the NBA’s labor agreement, players receive 51% of basketball-related income.

“The cap is dictating so much of this,” said Jeff Schwartz, Excel Sports Management president and founder, who has negotiated 11 NBA contracts of $100 million or more in his career. “The cap in 2014 was $63 million. In 2015 it was $70 million and in 2016 it was $94 million. If the cap goes up $4 or $5 million, it’s a pretty hefty jump, but the cap went up $24 million.”

Leon Rose, co-head of CAA Basketball, said the cap is set at $109 million for the upcoming season, “a massive increase in just four years.” 

Underpaid?

Agent David Falk thinks NBA superstars are underpaid, especially when compared to the top athletes around the world.
“When you look at the top three soccer players in the world — the salaries [of] Neymar, Ronaldo and [Lionel] Messi — they are making somewhere in the vicinity of $75 [million] to $90 million a year,” Falk said. “That’s what people like LeBron [James] should be making.”
James, in comparison, is scheduled to earn more than $37 million from the Lakers this upcoming season, according to published reports.
“What is much more interesting is that Michael Jordan signed for $30 million in 1996 and it took 17 years for another player (Kobe Bryant) to hit $30 million,” said Falk, who was Jordan’s longtime agent and negotiated his then-record $33.1 million salary with the Bulls for the 1997-98 season.
Of course, Jordan’s contract was negotiated before the National Basketball Players Association agreed to a salary cap in order to end the 1998-99 lockout. It’s taken a long time for star players to make the kind of money Jordan was making in the late 1990s — but now they are.
NBA contracts are limited to five years for players re-signing with their own team and four years for free agents switching teams. That restriction on the length of the contract is why there are so few $200 million contracts in the league, said Excel Sports Management’s Jeff Schwartz.
“If you had contracts in the NBA that were going to go out seven or eight years like in the MLB, you would have a lot of $200 million contracts in the NBA also,” Schwartz said.
Instead, star NBA players are increasingly signing nine-figure deals multiple times. In the past decade, James has signed three deals worth $100 million or more: a $110 million deal with the Heat in 2010; a $100 million extension with the Cavaliers in 2016; and a $153 million deal with the Lakers in 2018.
NBA agent Jason Glushon opened his own agency in 2016 and has negotiated three nine-figure deals since then, including two for the same player — forward Al Horford in 2016 (with the Celtics) and 2019 (with the 76ers).
“I think the future of the NBA will have certain elite players earning two and three nine-figure contracts throughout their careers,” Glushon said. — L.M./B.M.

Players can earn a certain percentage of the cap, with the top being 35%. And the current CBA makes it easier for some NBA players to get a max contract. “The latest CBA gave incumbent teams the ability to offer their own players with seven to nine years of service the same ‘supermax’ contract that a player with 10-plus years of service was previously exclusively able to attain,” Rose said.

Schwartz notes that NBA teams are required to spend 90% of the cap, and with small rosters “you are going to have guys today that are making $20 million or $30 million or $40 million a year.”

League revenue — and the salary cap — should continue to climb in the NBA, but how it solves its backlash over China will factor into those numbers.

MLB

MLB is the only major team sport without a salary cap, because the MLB Players Association is the only union to successfully fight against one.

Unlike in the NBA, MLB does not have a limit on individual salaries or durations of contracts, so it’s no surprise that baseball has the largest contracts ever negotiated in sports.

Three of those contracts were reached this year — Manny Machado’s 10-year, $300 million deal with the Padres; Bryce Harper’s 13-year, $330 million pact with the Phillies; and Mike Trout’s 12-year, $426.5 million extension with the Angels. Trout’s deal, signed in March, is now the biggest contract in U.S. sports history.

Despite those record-setting contracts, the last two free agent markets have been cold for many but the very top players. 

Ominously, the qualifying offer that clubs can make to impending free agents this coming offseason dropped for the first time since it was implemented in 2012, falling $100,000 to $17.8 million. The offer is based on the top 125 MLB player salaries. The Associated Press reported that the Machado, Harper and Trout deals may have had an adverse impact on the qualifying offer number because those deals had large signing bonuses and relatively low salaries for 2019. 

Research shows that while MLB has the most and the largest nine-figure contracts, the growth in such deals is not as strong in comparison with the NBA.

“It’s really comparing apples to oranges,” said MLB Deputy Commissioner Dan Halem, when asked the reason why. “We have a totally different system. We have had multiyear contracts of unlimited length.”

Halem noted that since 2011, the number of MLB players earning $20 million or more a year has nearly quadrupled — from 11 to 40. Additionally, MLB leads all sports with the most $200 million contracts: 14, or 16 if the two that went over that mark with deferred money are included. The NBA has two.

MLB players can become free agents after six years of major league service. Teams have been eager to lock many of them in early.

Wasserman agent Joel Wolfe, whose $100 million-plus deals include Giancarlo Stanton’s 13-year, $325 million contract in 2014, sees a surge in talented young position players and pitchers moving through the pre-arbitration and arbitration system. 

“I believe that is the main source of reason behind the teams making such a voracious attempt to sign the best young players to long club-friendly extensions well before they enter arbitration,” Wolfe said. “The clubs have recognized that this unique group of players exists and are certainly spooked by the number of $200 million-plus contracts. There is no question that the clubs will do whatever it takes to try and avoid having to pay these types of contracts in length and value.”

NFL and NHL 

In April of this year, agent Mark Rodgers negotiated a four-year, $140 million contract for Seattle Seahawks quarterback Russell Wilson. The deal includes a $65 million signing bonus among the $107 million guaranteed on signing.

NFL agents have made a lot of movement toward guaranteeing contracts in the last few years, Rodgers said, noting that both Minnesota Vikings quarterback Kirk Cousins’ three-year, $84 million deal and New York Giants running back Saquon Barkley’s $31 million contract were fully guaranteed.

The other guarantees on Wilson’s deal will occur in the first of each of the next three league years, so barring a catastrophic injury, he will get all $140 million, Rodgers said.

Brett Favre signed the NFL’s first $100 million contract in 2001. But the sport’s lack of career longevity and the league’s lack of guaranteed contracts made $100 million deals a relative oddity, especially for players in any position besides quarterback. The first seven $100 million-plus deals in NFL history went to quarterbacks, until defensive tackle Albert Haynesworth nabbed one from Washington in 2009. Twenty-six of the NFL’s 38 all-time $100 million-plus contracts have gone to QBs.

In recent years, the situation has improved for NFL players, especially non-quarterbacks. Since 2016, the league has doled out 17 contracts of $100 million or more, just behind MLB’s 21. The 17 deals represent 45% of the all-time NFL $100 million deals, in just a three-year period. Falcons quarterback Matt Ryan’s $150 million deal signed in May of this year also included $100 million in guaranteed money. 

The NHL has seen only five $100 million contracts.

Jeff Jackson, the Wasserman NHL agent who negotiated Connor McDavid’s eight-year, $100 million extension with the Edmonton Oilers in 2017, said the salary cap, the number of players on a team and term limits contribute to that situation. An NHL player is limited to seven years when he joins a new team and eight years if he re-signs with his own team.

Because of the NHL’s hard cap system, with no special exemptions allowed, combined with a 23-man active roster plus any players on injured reserve, it is difficult to have star players making enough to hit that threshold, Jackson said in an email.

Top contracts by league (agent)

MLB
2019: Mike Trout, Los Angeles Angels, 12 years, $426.5 million (Craig Landis)
2019: Bryce Harper, Philadelphia Phillies, 13 years, $330 million (Scott Boras)
2014: Giancarlo Stanton, Miami Marlins, 13 years, $325 million (Joel Wolfe)
2019: Manny Machado, San Diego Padres, 10 years, $300 million (Dan Lozano)
2007: Alex Rodriguez, New York Yankees, 10 years, $275 million (Scott Boras)
 
NBA
2017: Russell Westbrook, Oklahoma City Thunder, 5 years, $207 million (Thaddeus Foucher)
2017: Stephen Curry, Golden State Warriors, 5 years, $201 million (Jeff Austin)
2019: Damian Lillard, Portland Trail Blazers, 5 years, $196 million (Aaron Goodwin)
2019: Klay Thompson, Golden State Warriors, 5 years, $190 million (Greg Lawrence)
2019: Tobias Harris, Philadelphia 76ers, 5 years, $180 million (Torrel Harris)
 
NFL 
2018: Matt Ryan, Atlanta Falcons, 5 years, $150 million (Tom Condon)
2019: Russell Wilson, Seattle Seahawks, 4 years, $140 million (Mark Rodgers)
2018: Khalil Mack, Chicago Bears, 6 years, $141 million (Joel Segal)
2018: Jimmy Garoppolo, San Francisco 49ers, 5 years, $137.5 million (Don Yee)
2018: Aaron Donald, L.A. Rams, 6 years, $135 million (Todd France and Brian Ayrault)
2017: Matthew Stafford, Detroit Lions, 5 years, $135 million (Tom Condon)
 
NHL
2008: Alexander Ovechkin, Washington Capitals, 13 years, $124 million (Tatyana Ovechkina)
2012: Shea Weber, Nashville Predators, 14 years, $110 million (Jarrett Bousquet)
2012: Sidney Crosby, Pittsburgh Penguins, 12 years, $104 million (Pat Brisson)
2017: Connor McDavid, Edmonton Oilers, 8 years, $100 million (Jeff Jackson)
2010: Ilya Kovalchuk, New Jersey Devils, 15 years, $100 million (J.P. Barry)