The consensus top three picks in the 76th annual NBA Draft were the first players off the board Thursday night at the Barclays Center, but not in the expected order. The Magic pulled the surprise move by taking Paolo Banchero first overall, while presumed No. 1 pick Jabari Smith Jr. fell to the Rockets at third. The Thunder landed Chet Holmgren second overall.
The two-pick jump for Banchero means an extra $10 million in his paycheck over the next four years for the forward, who spent one season at Duke.
NBA salaries have soared over the past two decades, fueled by gains in TV and arena revenue and a collective bargaining agreement that stipulates roughly half of total revenue goes to the players. The league caps individual salaries, but 38 players had deals that paid at least $28 million this past season.
Draftees have also cashed in on the league’s growth, but their pre-slotted salaries drop quickly after the first few picks under a rookie scale that is tied to the NBA salary cap. Banchero’s four-year deal—the maximum length allowed—is expected to be $49.5 million. Pick No. 15, Mark Williams, is in line for $17.8 million from the Hornets, while the last selection of the first round, Peyton Watson, should receive $11.1 million from the Nuggets.
Only the first two years of the contracts are guaranteed, and teams hold options for years three and four. First-round picks typically see their options picked up, but the odds drop for players taken lower in the round. Only three of the first 27 picks in the 2018 draft didn’t have both of their options picked up, but none of the bottom three picks in the round made it to a fourth year.
In theory, teams have some flexibility on the contract terms under the CBA, as they can offer as little as 80% of the rookie salary slot and a maximum value of 120%. Deals are done at the max slot value with few exceptions, and Sportico’s contract projections reflect that. The estimates are also based on a 2022-23 salary cap of $122 million, which is the expected figure, according to multiple sources. The NBA’s accounting on the 2021-22 season, which determines the final cap figure, will not be completed until June 30.
The NBA’s rookie slot system was established in 1995 after the league’s first work stoppage. Until then, agents could negotiate long-term deals with no cap. The practice reached a breaking point in 1994 when top pick Glenn Robinson wanted the league’s first $100 million deal. The Purdue product held out of training camp with the Bucks and eventually “settled” for $68 million over 10 years. In 1995, top pick Joe Smith signed with Golden State for $8.4 million total over three years.
The first overall pick in the 2022 NFL Draft, Travon Walker, received a $24.4 million signing bonus in a deal signed last month under a rookie salary-slot system, similar to the NBA’s. The linebacker’s total guaranteed four-year deal of $37.4 million, will fall short of what the top three NBA picks receive.
Round two of the NBA Draft had only 28 players selected, as the Heat and Celtics both lost their second-round picks as a penalty for tampering with free agents. There are no salary restrictions on second-round picks, but they are often done for the league minimum or even two-way contracts that are roughly half the minimum and limit how many games a player is eligible to play.