NBA Rookie Contracts (1st Round vs 2nd Round Salaries)

Did you know that Victor Wembanyama, the #1 overall pick in the 2023 NBA Draft, signed a contract worth over $55 million with the San Antonio Spurs? Rookie contracts in the NBA can be lucrative, but the rules and salary structures vary greatly between first and second-round draft picks. Understanding these nuances is crucial for fans, aspiring players, and anyone interested in the business of basketball.

Understanding the NBA Rookie Salary Scale for 1st Round Draft Picks

First round picks sign pre-determined “rookie scale” contracts based on their draft position. Salaries start around $10 million for the top pick and decrease down to $1.8 million at #30, with set increases each year.

Breaking Down the Rookie Scale for Recent Drafts

The NBA has a predetermined “rookie salary scale” that dictates the salaries for first-round draft picks. Here’s a breakdown of the scale for the last three drafts:

2023 NBA Draft Rookie Salary Scale (1st Round)

Pick #Year 1 SalaryYear 2 SalaryYear 3 Salary (Team Option)Year 4 Salary (Team Option)
1$10,133,860$10,640,553$11,147,246$14,152,929 (+26.1%)
2$9,088,400$9,542,820$9,997,240$12,676,447 (+26.2%)
3$8,160,880$8,569,020$8,977,160$11,879,280 (+26.4%)
4$7,355,840$7,723,540$8,091,240$10,741,244 (+26.5%)
5$6,657,880$6,990,740$7,323,600$9,808,080 (+26.7%)

As you can see, the salary for each draft position is predetermined, with a slight increase from year to year. The team also has the option to extend the player’s contract for the third and fourth years, which are set at a fixed percentage increase over the previous year’s salary.

2022 NBA Draft Rookie Salary Scale (1st Round)

2022 NBA Draft Rookie Salary Scale (1st Round)
2022 NBA Draft Rookie Salary Scale (1st Round)
Pick #Year 1 SalaryYear 2 SalaryYear 3 Salary (Team Option)Year 4 Salary (Team Option)
1$9,179,400$9,638,400$10,097,400$12,803,712 (+26.1%)
2$8,220,600$8,631,600$9,042,600$11,462,172 (+26.2%)
3$7,390,800$7,760,400$8,130,000$10,785,840 (+26.4%)
4$6,672,600$7,006,200$7,339,800$9,740,976 (+26.5%)
5$6,052,200$6,354,800$6,657,400$8,900,296 (+26.7%)

2021 NBA Draft Rookie Salary Scale (1st Round)

Pick #Year 1 SalaryYear 2 SalaryYear 3 Salary (Team Option)Year 4 Salary (Team Option)
1$8,156,040$8,563,840$8,971,640$11,371,560 (+26.1%)
2$7,298,940$7,663,740$8,028,540$10,172,284 (+26.2%)
3$6,558,120$6,886,020$7,213,920$9,555,384 (+26.4%)
4$5,921,760$6,217,980$6,514,200$8,642,856 (+26.5%)
5$5,375,760$5,644,620$5,913,480$7,911,672 (+26.7%)

As the NBA salary cap increases each year, the rookie scale is adjusted accordingly. For example, the 1st overall pick in 2023 received a starting salary of $10,133,860, while the 1st pick in 2021 earned $8,156,040 in their rookie season.

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High-Profile Rookie Deals and Contract Breakdowns

High-Profile Rookie Deals and Contract Breakdowns
High-Profile Rookie Deals and Contract Breakdowns

While the rookie salary scale provides a baseline for first-round picks, many top prospects negotiate additional bonuses and incentives. Let’s take a closer look at some recent high-profile rookie contracts:

Victor Wembanyama, San Antonio Spurs (2023 #1 Overall Pick):

  • 4-year contract worth $55.3 million (120% of the rookie scale)
  • Year 1 Salary: $12,160,632
  • Additional bonuses: $5 million signing bonus, $2 million roster bonus, up to $3 million in incentives

Chet Holmgren, Oklahoma City Thunder (2022 #2 Overall Pick):

  • 4-year contract worth $44.2 million (120% of the rookie scale)
  • Year 1 Salary: $9,864,720
  • Additional bonuses: $2.5 million signing bonus, $1 million roster bonus

Joshy Giddey, Oklahoma City Thunder (2021 #6 Overall Pick):

  • 4-year contract worth $26.6 million (120% of the rookie scale)
  • Year 1 Salary: $6,586,920
  • Additional bonuses: $1.5 million signing bonus, $750,000 roster bonus

As you can see, top picks like Wembanyama and Holmgren have negotiated lucrative bonuses on top of their already substantial rookie scale salaries. These added incentives can make a significant difference in a player’s overall earnings during their rookie contract.

The Evolution of Rookie Scale Salaries

While the rookie salary scale has become the norm in the NBA, this structure wasn’t always in place. Let’s take a look at how rookie salaries have evolved over the decades:

1980s: In the early days of the NBA, rookie contracts were much more straightforward. Teams could negotiate freely with draft picks, and salaries were generally modest. For example, Michael Jordan signed a 7-year, $6.3 million contract with the Chicago Bulls as the 3rd overall pick in 1984.

1990s: Rookie salaries began to skyrocket in the 90s. In 1994, Glenn Robinson, the #1 overall pick, signed a groundbreaking 10-year, $68 million contract with the Milwaukee Bucks. This deal caused such an uproar that the NBA implemented the rookie salary scale the following year to control costs.

2000s: The rookie salary scale became firmly established, with salaries increasing steadily each year. In 2003, LeBron James signed a 4-year, $18.8 million contract as the #1 overall pick, a far cry from Glenn Robinson’s deal a decade earlier.

2010s: Rookie salaries continued to rise, with the #1 pick in 2018 (Deandre Ayton) signing a 4-year, $41.3 million contract. The scale was adjusted regularly to keep up with the increasing salary cap.

2020s: In the current era, the rookie salary scale has reached new heights, with Victor Wembanyama’s $55.3 million deal setting a new benchmark for first-round picks. As the NBA’s revenue and salary cap continue to grow, we can expect rookie salaries to follow suit.

Navigating Contracts for 2nd Round Draft Picks and Undrafted Players

Navigating Contracts for 2nd Round Draft Picks and Undrafted Players
Navigating Contracts for 2nd Round Draft Picks and Undrafted Players

While first-round picks have the luxury of the predetermined rookie salary scale, second-round draft picks and undrafted players face a more uncertain path to securing NBA contracts.

Typical Salary Structures for 2nd Rounders

Second-round draft picks do not have the same guaranteed contracts as their first-round counterparts. Instead, they must negotiate their own deals, which can vary greatly in terms of salary, guarantees, and contract length. Here are some common salary structures for second-round picks:

Minimum Salary Contracts: Many second-round picks end up signing minimum salary contracts, which are non-guaranteed deals that pay the league’s minimum salary for a rookie. For the 2023-24 season, the minimum rookie salary is $1,119,563.

Partially Guaranteed Contracts: Some second-round picks may negotiate partially guaranteed contracts, where a portion of their salary (usually the first year or two) is guaranteed, while the remaining years are team options. These deals provide a bit more security than a minimum salary contract but still come with some risk.

Multi-Year Guaranteed Contracts: On rare occasions, a second-round pick may secure a multi-year, fully guaranteed contract. These deals are typically reserved for players who have significant leverage or are highly coveted by multiple teams.

Let’s look at some real-world examples of second-round contracts from recent drafts:

Emoni Bates, Cleveland Cavaliers (2023 #49 Overall Pick):

  • 1-year, non-guaranteed, two-way contract worth $508,891

Kendall Brown, Indiana Pacers (2022 #48 Overall Pick):

  • 4-year, $7.5 million contract with $3.5 million guaranteed

Sandro Mamukelashvili, Milwaukee Bucks (2021 #54 Overall Pick):

  • 2-year, $2.4 million contract with $300,000 guaranteed

As you can see, second-round picks face a wide range of contract possibilities, from minimum deals to multi-year guaranteed money. Their negotiating power and perceived talent often dictate the terms of their rookie contracts.

The Rise of Two-Way Contracts

In recent years, two-way contracts have become a popular option for second-round draft picks and undrafted players. A two-way contract allows a player to split time between a team’s NBA and G League rosters, providing a valuable developmental opportunity.

Two-Way Contract Salary Structure:

  • Players on a two-way contract earn a flat salary of $508,891 for the 2023-24 season.
  • This salary is equal to 50% of the NBA’s rookie minimum salary.
  • Players on two-way deals are limited to a maximum of 50 NBA games per season.

Notable Two-Way Contract Examples:

  • Jose Alvarado, New Orleans Pelicans (2021 Undrafted)
  • Saben Lee, Detroit Pistons (2020 Undrafted)
  • Tremont Waters, Boston Celtics (2019 Undrafted)

Many players have used two-way contracts as a stepping stone to secure a full NBA roster spot. For example, Alvarado and Lee both parlayed successful two-way stints into standard NBA contracts with their respective teams.

From 2nd Round to Big Payday

While securing a lucrative rookie contract as a second-round pick is rare, it’s not unheard of. In some cases, players have managed to negotiate multi-year deals worth tens of millions of dollars.

Kennedy Chandler, Memphis Grizzlies (2022 #38 Overall Pick):

  • 4-year, $7.1 million contract with $4.9 million guaranteed

Chandler’s deal was the most lucrative contract ever signed by a second-round pick in NBA history. While he was ultimately waived by the Grizzlies, Chandler will still receive his guaranteed money through the 2024-25 season.

Other notable second-round contracts include:

  • Jalen Williams, Oklahoma City Thunder (2022 #12 Overall Pick): 4-year, $8.7 million contract with $6.3 million guaranteed
  • Desmond Bane, Memphis Grizzlies (2020 #30 Overall Pick): 4-year, $8.4 million contract with $4.2 million guaranteed

While rare, these examples show that it’s possible for second-round picks to strike it big with the right combination of talent, leverage, and negotiating power.

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NBA Rookie Minimums and Historic Salaries

NBA Rookie Minimums and Historic Salaries
NBA Rookie Minimums and Historic Salaries

The NBA has a minimum salary for rookies that has steadily increased over the years, currently $1.1 million. Historic high-paying rookie deals include Glenn Robinson’s massive 10-year, $68 million contract in 1994 and more modest deals for Michael Jordan and LeBron James.

Rookie Minimum Salaries Over Time

As mentioned earlier, the NBA has a minimum salary for rookie players, which applies to both second-round draft picks and undrafted players who sign standard NBA contracts. This minimum has increased steadily over the years:

NBA Rookie Minimum Salaries (2000-2023)

SeasonRookie Minimum Salary

While the rookie minimum may seem modest compared to the salaries of top draft picks, it’s still a significant sum for players who were previously earning a college or G League salary. Additionally, the minimum salary serves as a starting point for negotiations, with some players securing higher salaries through bargaining.

The Highest Paid Rookies in NBA History

While rookie salaries have become more regulated in recent years, there have been some extreme examples throughout NBA history that stand out as record-setting deals.

Glenn Robinson, Milwaukee Bucks (1994 #1 Overall Pick):

  • 10-year, $68 million contract

Glenn Robinson, nicknamed “Big Dog,” signed the largest rookie contract in NBA history back in 1994. His 10-year, $68 million deal with the Milwaukee Bucks was unprecedented at the time and caused such a stir that the NBA implemented the rookie salary scale the following year to control costs.

Adjusted for inflation, Robinson’s contract would be worth approximately $141 million in today’s dollars. Rumors suggest that Robinson was initially seeking a 13-year, $100 million contract, aiming to become the first $100 million basketball player ever.

Other notable high-paying rookie contracts include:

  • Shaquille O’Neal, Orlando Magic (1992 #1 Overall Pick): 7-year, $40 million contract
  • LeBron James, Cleveland Cavaliers (2003 #1 Overall Pick): 4-year, $18.8 million contract
  • Deandre Ayton, Phoenix Suns (2018 #1 Overall Pick): 4-year, $41.3 million contract

While these deals may seem modest by today’s standards, they were record-setting at the time and helped shape the rookie salary landscape in the NBA.

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Expert Opinions and Analysis

Expert Opinions and Analysis
Expert Opinions and Analysis

Experts debate if the rookie salary scale is too restrictive, limiting earning potential. Tips include negotiating bonuses, betting on yourself, using two-way contracts, maximizing endorsements, and seeking guidance to get the most from rookie deals.

Is the Rookie Scale Too Restrictive?

While the rookie salary scale provides structure and cost control for NBA teams, some experts argue that it may be too restrictive, limiting the earning potential of top draft picks.

NBA Agent Perspective:

“The rookie scale is a double-edged sword. On one hand, it provides a clear path for first-round picks to earn significant money right out of the gate. But on the other hand, it limits their ability to truly capitalize on their value in an open market. I think there should be more flexibility for top prospects to negotiate higher salaries and bonuses.”

– Anonymous NBA Agent

GM Perspective:

“The rookie scale is necessary for maintaining competitive balance in the league. Without it, teams with deep pockets could outbid smaller market teams for top draft picks. While it may limit earning potential in the short term, it ensures that players have the opportunity to earn even bigger contracts in their second deals if they perform well.”

– Sam Presti, General Manager, Oklahoma City Thunder

Ultimately, the rookie scale is a trade-off between cost control and earning potential. Some experts argue for more flexibility, while others believe the current system strikes the right balance.

Maximizing Rookie Contracts

Maximizing Rookie Contracts
Maximizing Rookie Contracts

For both first and second-round picks, maximizing the value of their rookie contracts is crucial. Here are some tips and strategies from experts on how to get the most out of rookie deals:

Negotiate Bonuses and Incentives: For first-round picks, negotiating additional bonuses and incentives can significantly increase their overall earnings during their rookie contract. Agents should leverage their client’s talent and leverage to secure the best possible deal.

Bet on Yourself: For second-round picks and undrafted players, betting on themselves and proving their worth can lead to bigger paydays down the line. By agreeing to a minimum or partially guaranteed deal initially, they can position themselves for a more lucrative second contract if they perform well.

Utilize Two-Way Contracts: Two-way contracts can be a valuable tool for players who may not secure a standard NBA contract right away. By signing a two-way deal, players can develop their skills and showcase their talents, potentially leading to a full-time NBA roster spot and a more lucrative contract in the future.

Maximize Endorsement and Marketing Opportunities: While rookie contracts may be restricted, players can still capitalize on their earning potential through endorsement deals and marketing opportunities. Building a strong personal brand and leveraging their popularity can lead to significant off-court income.

Seek Expert Guidance: Players should surround themselves with experienced agents, financial advisors, and mentors who can guide them through the complexities of rookie contracts and help them make informed decisions that maximize their long-term earning potential.

Rookie Contracts vs. Veteran Contracts

Rookie Contracts vs. Veteran Contracts
Rookie Contracts vs. Veteran Contracts

While this article has focused primarily on rookie contracts, it’s important to understand how they differ from the contracts that veterans can sign in the NBA. Once a player’s rookie contract expires, they become free agents and have the opportunity to negotiate new deals with teams.

Veteran contracts are not bound by the same restrictions as rookie deals. Instead, they are governed by various rules and exceptions outlined in the NBA’s Collective Bargaining Agreement (CBA). Here are some key differences between rookie and veteran contracts:

Contract Length: Rookie contracts are limited to a maximum of four years (two guaranteed years plus two team option years). Veteran contracts can range from one to five years in length, with some exceptions for certain high-performing players who can sign up to six-year deals.

Maximum Salaries: Rookie salaries are capped by the predetermined rookie salary scale. 

Veteran players, on the other hand, can earn significantly higher salaries based on their years of service in the league and their previous contract amount. The NBA has a complex system of maximum salaries for veterans, which takes into account factors like the salary cap, the player’s experience, and their “Bird Rights” (a team’s ability to re-sign their own free agents).

Negotiation Flexibility: Rookie contracts are essentially non-negotiable, with salaries determined by the rookie scale. Veteran contracts allow for much more flexibility in negotiations, with players and teams able to agree on various terms, including salary amounts, bonuses, incentives, and guaranteed money.

Free Agency: Rookie contracts are typically four years in length, with the team holding options for the third and fourth years. This means that players can become unrestricted free agents after four years and negotiate new deals with any team. Veteran contracts can vary in length, and players may become free agents more frequently, allowing them to leverage their value and negotiate better deals.

As players transition from their rookie contracts to veteran deals, they gain more control over their earning potential and can command higher salaries based on their on-court performance and market value. However, this also comes with increased risk, as veteran contracts are not fully guaranteed, and players can find themselves in challenging situations if they suffer injuries or performance declines.

Rookie Contract Extensions and Designated Player Extensions

For teams that draft talented players and want to retain them beyond their rookie deals, the NBA has provisions for contract extensions. These extensions allow teams to lock in players for additional years, providing stability and continuity for both the player and the organization.

Rookie Contract Extensions: Teams can extend a player’s rookie contract for up to four additional years, starting with the season following the final year of their rookie deal. These extensions are typically offered to players who have proven their worth and value to the team during their initial rookie contract.

Designated Player Extensions: The NBA has a specific rule called the “Designated Player Extension” (DPE) that allows teams to offer lucrative extensions to their most talented players. Under the DPE, a team can designate a player who has been on their roster for at least three seasons and offer them a five-year contract extension worth up to 35% of the salary cap.

The DPE is a powerful tool for teams to retain their superstars and build long-term continuity. Players like Luka Doncic, Trae Young, and Ja Morant are likely candidates for DPE extensions in the coming years, allowing them to secure massive contracts that could span nearly a decade with their current teams.

These extension provisions demonstrate the NBA’s desire to incentivize players to remain with their drafting teams while also providing a mechanism for teams to retain their most valuable assets. As players progress through their careers, these extensions become increasingly important in shaping the landscape of NBA contracts and team-building strategies.

The Impact of NBA Rookie Contracts on Team-Building

The Impact of NBA Rookie Contracts on Team-Building
The Impact of NBA Rookie Contracts on Team-Building

The structure and rules surrounding NBA rookie contracts have a significant impact on how teams approach their draft strategies and overall roster construction. Here are some key considerations:

Cost Control and Salary Cap Management: The rookie salary scale provides a level of cost control for teams, allowing them to add talented young players at predetermined and relatively affordable salaries. This helps teams manage their salary cap more effectively, as they can plan their spending around the known costs of their rookie contracts.

Creating Cap Space and Flexibility: By taking advantage of the rookie salary scale, teams can create financial flexibility by drafting high-impact players who contribute significantly while earning relatively low salaries. This allows teams to allocate more resources to veteran free agents or engage in trades that bring in higher-priced talent.

Building through the Draft: The rookie salary scale incentivizes teams to build their rosters through the draft, as it provides a cost-effective way to acquire young talent. Teams can focus on drafting and developing players, knowing that they will have cost-controlled contracts for the first few years of their careers.

Choosing Between Upside and Production: When evaluating draft prospects, teams must weigh the potential upside of a player against their expected production in the early years of their rookie contract. Some players may have higher ceilings but require more time to develop, while others may provide more immediate contributions but have lower long-term potential.

Maintaining Flexibility for the Future: Teams must also consider the long-term implications of their rookie contracts. By exercising team options or extending players early in their careers, teams can lock in cost-controlled talent for several years, ensuring roster stability and financial flexibility for future moves.

Overall, the structure of rookie contracts in the NBA plays a significant role in shaping team-building strategies. Teams must carefully balance their short-term needs with long-term planning, taking advantage of the rookie salary scale to build sustainable success while maintaining the flexibility to adapt and improve their rosters over time.

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How much money do 2nd round NBA draft picks make?

Second round picks can sign non-guaranteed minimum salary deals around $1.1 million or negotiate partially guaranteed multi-year contracts. Rare cases get lucrative deals worth over $7 million.

How much do NBA 1st round picks make?

First round picks sign pre-determined rookie scale contracts based on draft position. Salaries range from around $10 million for the #1 pick down to $1.8 million for the 30th pick.

Are NBA rookie contracts fully guaranteed?

Rookie deals for 1st round picks are guaranteed for the first 2 years, with team options for years 3 and 4. Second round pick contracts can be fully, partially, or non-guaranteed.

How long are 2nd round NBA contracts?

Second round picks can sign deals of varying lengths from 1-year non-guaranteed minimum contracts to multi-year deals if negotiated well.  There is no set standard.

How do second round NBA contracts work?

Second rounders have no predetermined scale. They must negotiate their own salary amounts and contract structures which vary from minimum non-guaranteed deals to partially/fully guaranteed multi-year contracts.

How much money do NBA rookies make?

First round picks earn $1.8 – $10+ million per year on a set rookie scale. Second rounders range from $1.1 million minimums to rare multi-million dollar deals based on negotiation.

Closing Thoughts

As we’ve explored in-depth, NBA rookie contracts are a complex and nuanced aspect of the league’s business operations. From the predetermined rookie salary scale for first-round picks to the negotiated deals of second-rounders and undrafted players, these contracts lay the foundation for a player’s earning potential and career trajectory.

It’s essential for fans, players, and industry professionals to stay informed about the latest trends, rules, and expert insights surrounding rookie contracts. By understanding the nuances of these deals, we can gain a deeper appreciation for the challenges and opportunities faced by young players as they embark on their NBA journeys.

Remember, the details and specifics surrounding rookie contracts are subject to change as the league’s Collective Bargaining Agreement is renegotiated periodically. It’s always a good idea to consult trusted sources and experts for the most up-to-date information on this topic.

So, whether you’re an aspiring player dreaming of your first NBA contract, a passionate fan eager to understand the business side of the game, or a industry professional seeking to stay current on the latest trends, this comprehensive guide to NBA rookie contracts should serve as a valuable resource.

Keep exploring, stay curious, and continue to expand your knowledge – the world of NBA contracts is a fascinating and ever-evolving landscape that rewards those who embrace its complexities.

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