In an article by sports agent Arn Tellum, he discussed his dealings with the Memphis Grizzlies for his client Xavier Henry and the downside to performance-based bonuses and
Teams can offer salaries up to 120 percent of the player’s slotted figure. “The process is relatively simple, and teams routinely offer the 20 percent maximum,” reported The New York Times.
Denver Nuggets’ Ty Lawson was the first to agree to performance-based clauses in 2009. Another player to agree was Spurs’ rookie James Anderson:
This year James Anderson, a shooting guard from Oklahoma State, was picked No. 20 by the San Antonio Spurs. He, too, accepted performance bonuses.
These concessions set a terrible precedent.
Basically it’s the extra 20% teams tend to link to the performance-based bonuses. In essence teams can potentially save that percentage of money and in the end only offer 100% instead of the full 120%. Granted any sports agent will work hard to get the maximum contract amount for his client because they also have a vested interest in the full amount for their client which in turn lines their pockets.
When talking about the San Antonio Spurs’ front office, to say they are business savvy is an under statement. During their dynasty period they were able to win four NBA championships while staying under the cap and were able to re-sign Richard Jefferson and restructure a contract to get under the salary cap this season. Not to mention signing Tiago Splitter, an MVP for the ACB Finals with Caja Laboral, at an incredible discount.
Now I have no idea what type(s) of performance-bonuses Anderson agreed to or how outrageous or reasonable they may be but if he doesn’t accomplish the goals then the Spurs could pocket the 20%. Not to mention it could serve as motivation to get the best out of Anderson.
Whether you agree with performance-bonuses, Tellum, or not, leave it to the Spurs’ front office to once again be financially savvy in every way possible. Sure a 20% savings may not be much but with the NBA hurting financially and the teams facing their own financial woes, this is just another way the Spurs remain smart in the business arena.
Look at the New York Knicks. That franchise has a recent history of being frivolous with their finances. Handing out large contracts to players (i.e. Eddy Curry) who do not live up to the generous offers, and are now coming out of financial disparity. The Spurs, on the other hand, continue to try to be fiscally responsible in this economic climate all the while remaining a competitive organization year-in and year-out in a small market like San Antonio.
However, with Anderson’s NBA debut for the Spurs scoring 10 points in 26 minutes off the bench, and his recent play on both ends of the court, it seems he might reach whatever set performance goals and the Spurs will happily pay Anderson the full contract.