How Do Teams Decide How Much Money To Trade For An Athlete's Services?

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Do you think that right now you could sign a $100 million contract with a professional sports team? Probably not, because you likely don’t have the skills that the team would consider worthy of such a contract. Teams take many factors into consideration when deciding how much money to pay an athlete. Assistant professor of Sport Management Corinne Farneti explains in a video that a number of factors such as the athlete’s past performances and the team’s salary cap help teams decide a salary for a player.

Age can have a tremendous impact on whether a team would be willing to trade for or sign a player. If a player is young and shows great potential, the team would be more likely to trade for him because he would most likely help that team for many years to come. If a player is old and injury-prone, a team would have 2nd thoughts about trading for him because if he has the wrong injury, his time in the league could be over. Older athletes are also generally more injury-prone, so even if the athlete doesn’t have much injury history, the simple fact that he is getting older automatically increases the risk of injury, so teams may seriously contemplating trading for him, but they usually don’t mind trading him.

An athlete in the prime of his career with many terrific past performances may spark the interest of many NBA teams because they know that if they trade for him, he can easily assimilate into their system and make an immediate impact on the team. Many teams who haven’t made the playoffs in years and are looking for an established star rather than trying to develop a young athlete which could take years will try this method to instantly improve their team. An example of this happening in the NBA is the Los Angeles Clippers signing star point guard Chris Paul who at the time was in the prime of his career, and the Clippers were looking for help so they could win a championship. Teams decide whether they want to make an immediate impact or wait a few years and then be good, and they make decisions based on these prior decisions.

Why Are Teams Willing To Trade More Money Than A Player Is Worth?

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Despite inflation, the NBA is actually getting richer than ever! Forbes magazine author Alex Reimer explains the free agency signings that occurred this past summer and why they occurred. His main argument is that NBA teams aren’t going to hold back on trading millions of dollars to NBA players in exchange for their talents and winning mentalities due to a salary cap increase, and since the players would like more money, they are willing to play for a team that willingly gives them more money than others.

Reimer first explains that between the years of 2001 and 2013, the NBA salary cap has risen $14.5 million. He writes that this is the reason that NBA teams are willing to pay so much money for their players. Around 20 of the 30 teams were able to sign a maximum money contract to a player this summer, so they took advantage by signing players. NBA teams want to pay as much money as possible to get the players that they like on their teams, so even average players are getting big paychecks from NBA teams.

Most of the NBA players signed to big contracts weren’t even star players. Reimer notes that “[o]utside of Kevin Durant...there arguably isn’t another player on the open market who’s worthy of receiving a maximum-contract.” NBA teams are simply paying average players a lot of money because they can. They also want to make sure that the player picks their team over another team by paying the player the most money.

Trading in Sports: What Might Affect It?

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Have you ever wondered why and how teams trade in sports such as basketball? A writer on the website dearsportsfan.com explains how trading works. This website helps fans that want to learn more about sports expand their knowledge. Many things can affect sports trading such as the different forms of a no-trade clause in an athlete’s contract and the fact that it is easy for a traded player to assimilate into his new team’s system.

Trade clauses in contracts can affect an athlete’s ability to be traded. There are two types of no-trade clauses that an athlete can request to be in his contract. A partial no-trade clause means that the athlete has some say as to where and when they can be traded. Full no-trade clauses mean that a player has the ability to deny any trade that the team suggests to him. No-trade clauses are usually only given to star players that have established their worth to a team enough to have dominance over his contract.

In the NBA, most teams run very similar plays. This means that roster changes can be made, and the new player added to the roster can easily adjust to the new team’s style of play because it was most likely identical to his previous team’s style. The NBA is very different from the NFL or NHL, where most teams don’t have the same play styles or formations. Basketball is a free flowing game with fundamental plays being easy to follow on offense and defense, such as the pick-and-roll on offense, and man-to-man defense. This is the reason that roster changes are made more often in basketball than many other sports.

Trading and Signing Players in Basketball

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RESEARCH TOPIC/TITLE: Basketball

KEY ECONOMIC PRINCIPLE I’M ADDRESSING:  People gain when they trade voluntarily.

OVERALL RESEARCH QUESTION THAT CONNECTS MY TOPIC TO THE ECONOMIC PRINCIPLE: How do teams decide which players to sign and trade for?

• 3-4 SUB QUESTIONS/TOPICS THAT HELP ADDRESS THE OVERALL RESEARCH QUESTION and EMBEDDED LINKS TO RELIABLE SOURCES THAT HELP ANSWER THE QUESTION
• How do trades work?
• How Sports Trading Works
• How do teams decide what’s a fair trade?
• Trading in Sports
• How do teams decide how much to pay an athlete?
• NBA Free Agency Salaries
• Professional Athlete Salaries