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4:27 a.m. • 2-12-12

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WRAL.com Sports blogger David Glenn

David Glenn's ACC Journal

David Glenn, editor of the ACC Sports Journal and ACCSports.com, dishes out the latest news on top recruiting prospects and shares his insights on ACC basketball and football for WRAL.com.

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David Glenn

NBA Salary Scale Drives Many Decisions

When N.C. State freshman J.J. Hickson fielded questions this spring about his approach to the idea of early entry into the NBA draft, he said the No. 1 factor in his decision would be his projected draft position.

North Carolina's trio of early entry candidates — sophomores Ty Lawson and Wayne Ellington, and junior Danny Green — also have stated, in different words, that their ultimate stay-or-go decisions will be impacted greatly by the feedback they receive from NBA decision-makers between now and the June 16 withdrawal deadline.

Given the bold comments of Ellington and Green at this week's invitation-only, pre-draft camp in Orlando, Fla., it's safe to say that a guaranteed contract would be enough to lure three of the four ACC players from the college ranks. Under current NBA draft rules, all first-round picks receive guaranteed two-year contracts, with team options for three additional years. It's also possible for second-round picks or even undrafted free agents to negotiate for guaranteed contracts, although that is uncommon.

Lawson and UNC coach Roy Williams draw their line in a slightly different place. Williams recently stated that he believes prospects should consider early entry only if they're told by NBA officials that they will be among the top 20 picks, although the coach added that every individual's decision is unique because of family situations and other personal circumstances. Clearly, though, he sees the top 20 draft slots as different than the other 40 (counting the second round). Lawson has made similar comments this week in Orlando.

Former UNC coach Dean Smith often said that he encouraged his players to turn pro early if they were assured of being "lottery picks." That designation, created when the NBA started its lottery system for deciding its draft order in 1985, originally described only the top seven selections. (Only non-playoff teams participate in the lottery, and in 1985 only seven teams failed to make the playoffs.) Today, the first 14 choices in the first round are lottery picks.

Much has changed over the last 24 years, but Smith, Williams and this year's early entry candidates all are speaking the same language in at least one sense: Money matters. Any NBA prospect who is interested in making the wisest possible business decision should tie his decision directly to his promised or projected draft slot.

And why is that? In the old days, it was because of the mind-boggling contracts given to the top picks in the first round. Today, it's because of the NBA's rookie salary scale. In both cases, the message is the same: The higher your draft slot, the more money you will make with your first professional contract. It's really that simple.

Trying to put yourself in the shoes of Hickson, Lawson, Ellington or Green, none of whom is considered a lock for the first round?

One thing to consider is that those who follow such things almost universally agree that the 2008 draft, bolstered by more than a dozen one-and-done collegians who are expected to dominate the first round, is far more imposing than the 2009 draft. (The incoming college freshman class is not expected to have more than a handful of one-year wonders.) That means waiting a year, assuming it's productive and injury-free, could mean a much better draft position next summer.

Another thing you must consider is the information below. These financial numbers apply only to 2008 draft picks. The dollar values in future NBA rookie salary scales gradually increase year by year, through the expiration of the NBA’s collective bargaining agreement in 2012.

First Pick: In the best-case scenario, you’ll get paid about $26.3 million over five seasons, with the last three being options exercised by the team that picked you, then you can become a free agent. In the worst-case scenario, you’ll make about $8.3 million in guaranteed money over two seasons.

Fifth Pick: In the best-case scenario, you’ll get paid about $17.4 million over five seasons, then become a free agent. In the worst-case scenario, you’ll make about $5.5 million in guaranteed money over two seasons.

10th Pick: In the best-case scenario, you’ll get paid about $11.7 million over five seasons, then become a free agent. In the worst-case scenario, you’ll make about $3.6 million in guaranteed money over two seasons.

15th Pick: In the best-case scenario, you’ll get paid about $10.2 million over five seasons, then become a free agent. In the worst-case scenario, you’ll make about $2.8 million in guaranteed money over two seasons.

Notice how quickly the money starts falling here, before it evens out toward the bottom of the first round. This dropoff is why some (reputable) advisors tell players it’s worth staying in school if they’re projected at No. 20-30 now but reasonably believe they could be No. 5-15 after another year of college ball. According to some analysts, UNC's Tyler Hansbrough — who previously announced his decision to remain with the Tar Heels for his senior season —  fits that description this year.

20th Pick: In the best-case scenario, you’ll get paid about $8.1 million over five seasons, then become a free agent. In the worst-case scenario, you’ll make about $2.2 million in guaranteed money over two seasons.

25th Pick: In the best-case scenario, you’ll get paid about $7.3 million over five seasons, then become a free agent. In the worst-case scenario, you’ll make about $1.8 million in guaranteed money over two seasons.

30th Pick: In the best-case scenario, you’ll get paid about $6.6 million over five seasons, then become a free agent. In the worst-case scenario, you’ll make about $1.6 million in guaranteed money over two seasons.

Second Round: Rookie salaries are not automatically guaranteed for second-round picks, although some second-rounders in the past have negotiated for guaranteed money. A player without a guaranteed deal doesn't draw a salary unless he earns a regular-season roster spot.

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Thanks for the notes, guys.

To answer the question: Basically, it comes down to the language of the contract. As a second-round pick, Terry probably did NOT have a guaranteed deal, so Dallas would not have paid him the value of the contract after he got waived last year. (Terry played in Greece this past season, so he got paid according to the terms of his deal with that team.) Dallas has invited Terry back to play on its summer league team this year, but again he probably has one of those contracts where he'll get paid the really good money only if he makes the regular-season roster for the Mavericks. If he doesn't, there's always another contract waiting overseas, and those deals are usually pretty good money (but not NBA-like) by most standards, too.

I'd probably draw the line at a top 20, just so I don't slip out of the first round. That is, unless I had other issues. 1.6 millions dollars in 3 years is a TON better than these guys would get if they finished their sociology degree. it's a business decision.. and one that if I were in there shoes, would be almost impossible to turn away from.

Once again, great info and insight, Dave. Do players like Reyshawn Terry still get paid the full amount of their first NBA contract even if they don't make the final roster? Or does a different pay scale kick in, like in the NHL?

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