The Minnesota Timberwolves have drafted the most exciting player to enter the NBA since Allen Iverson. All that stands between Ricky Rubio and the Minnesota Timberwolves is a 6.7 million dollar buyout owed to his current team DKV Joventut, to negate the final two years of his contract. Several lawyers have speculated that Rubio’s contract is not binding, but for the purpose of this article, we will assume that the contract Rubio signed when he was 14 is legitimate.
Following the rookie salary scale and NBA salary cap, below is the money Ricky Rubio can expect to make by executing the options available to him over an eight year period. This breakdown assumes that Rubio will get a max contract after his fifth year and that a Euro team would pay him 3M per season in addition to buying out his contract in full, an action that NBA teams are restricted from performing.
Buyout, 2009, 2010, 2011, 2012, 2013, 2014, 2015
Signs with MN this year
-6.1M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M, 9M, 11M, 11M = 46.6M
Signs with MN this year
-6.1M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M, 9M, 11M, 11M = 46.6M
Waits one year
-6.1M, .1M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M, 9M, 11M = 35.7M
-6.1M, .1M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M, 9M, 11M = 35.7M
Waits two years
0M, .1M, .1M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M, 9M = 30.9M
0M, .1M, .1M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M, 9M = 30.9M
Signs 3 year contract with Euro team, including full buyout
0M, 3M, 3M, 3M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M = 30.7M
0M, 3M, 3M, 3M, 3.3M, 3.5M, 3.8M, 4.8M, 6.3M = 30.7M
Signs 4 year contract with Euro team, including full buyout
0, 3, 3, 3, 3, 3.3M, 3.5M, 3.8M, 4.8M = 27.4M
0, 3, 3, 3, 3, 3.3M, 3.5M, 3.8M, 4.8M = 27.4M
A few caveats, this analysis does not take into account marketing or taxes. Rubio will make less money in the NBA because of taxes, but more from marketing. Teams in Europe pay the income tax of their players, whereas it’s the players responsibility in the NBA. Rubio will have to pay federal income tax, plus state income tax in EVERY NBA city he plays in, including 41 games in MN, which has a very high state income tax. From a marketing perspective, Rubio can expect to make substantially more in the NBA, regardless of which team he plays for, but I will leave that breakdown for a future post.
Even with the tax and marketing voids, it’s clear that Rubio should sign with MN yesterday. Waiting a year, his second best option, basically lops off 11M in salary made over an 8 year period. Ricky Rubio is going to lose money every additional year that he doesn’t sign with an NBA team.
Above are the only viable options for Ricky Rubio. Small market teams, and labeling Minnesota a small market is not entirely accurate, are used to hearing rumors that their best players will be traded to New York, Miami, or Boston every day. Reporters have to write something, and speculating that every NBA star is about to be traded to the Knicks for a few overpayed role players, certainly sells papers. But that’s not how the NBA works.
First, Minnesota owns Ricky Rubio’s NBA rights indefinately. He cannot sit 2 years in Europe and then play for the Heat. Second, these large market teams do not have the assets to trade for a player such as Ricky Rubio, even if he was on the market. The Timberwolves have the exclusive rights to Ricky Rubio for the first five years of his NBA career, and they have these rights pretty cheap. Giving up five years of a player in his prime over an 18M contract just isn’t going to happen, no matter how much smoke the media, Rubio’s agent, and even Rubio himself blows.
With all of this said and analyzed, it’s clear that Ricky Rubio will be a member of the Minnesota Timberwolves organization for the 2009-2010 season, and if we’re lucky, for the duration of his career. The New York Knicks would be best served saving up for the NBA free agent class of 2014, as that’s going to be their only legitimate shot at signing Ricky Rubio.
Nice analysis but you forgot the 20% raise on top of the base rookie salary that Rubio will likely get. The base rookie salary can be tweaked from 80% to 120% and more often than not, guys get the extra 20%.
Assuming he gets the 20%, I calculated:
3.3M/3.5M/3.8M/4.8M
Anyway, like you wrote (and I have been harping), it’s stupid to think that Rubio will be staying overseas. Look at how much money he’s throwing away, not to mention the endorsements.
Updated to reflect the 20% bump. Thanks.
Nice break down but does that include tax implications?
This does not include taxes. As I understand it, European teams pay the players taxes, whereas taxes are the players responsibility in the NBA. Rubio will have to pay federal tax, plus state income tax in EVERY NBA city he plays in, including 41 games in MN, which has a very high state income tax.
Including taxes would sway the argument to staying in Europe, but still, it’s pretty cut and dry from a money perspective. Rubio will make a lot more cash playing for the TWolves.
I’ll update the post with this info. Thanks.
This analisis only shows that playing in the NBA is economically better for good players, something we already knew.
1- The current Rubio’s buyout is $8,4 million. His contract updated on 1st July.
2- As you said, you didn’t include taxes and if you add that to his agent commission and other percentages, he might actually get half of his contract’s money (Just guessing here). It’s a very important issue.
3- If he is to pay the buyout now, he will have to add the interest rate of some bank willing to lend the money.
4- NBA teams can contribute with $0,5 million to pay buyouts.
The marketing revenues and contracts after 3rd year are not a sure thing. I personally think he will not get maxed contracts after it, but that’s just an opinon.
The best case scenario you drew might not become true, he might not live up to the expectations (something not uncommon on euro players), he might suffer some injuries, etc. And even in your best case scenario, he might still be paying his buyout in his 4th year.
You’re wrong. They only own his rights for 3 years
John Doe, you are wrong too. Rubio would have to sit out an entire year of after any professional basketball contract for his rights to be released and he could then re-enter the draft.