LC Johnson: Some Players Are Struggling Financially During The Lockout

[Way Of The Ray <wayray@ix.netcom.com>]

Some players struggled with finances during lockout

By L.C. Johnson
The Orlando Sentinel

Tuesday, November 24, 1998

The typical biweekly paycheck earned by an NBA player
could qualify as a handsome year-end W-2 statement to
the average working person.

Thanks to the league-imposed lockout, NBA players and
fans finally share one thing in common: Hoop dreams
about making the big bucks.

The labor impasse between the National Basketball
Players Association and the league's 29 owners,
represented by Commissioner David Stern, is nearly 5
months old. There is no guarantee a settlement will be
reached before the end of the year.

In addition to games already wiped off the 1998 portion
of the schedule, players missed their first paychecks
on Nov. 15. Each day that passes without a settlement
decreases the likelihood of the canceled games or
checks ever being recouped.

In the meantime, players are having to try to make ends
meet without those regular-scheduled paychecks. In some
instances they'll have to dip into savings and
investments. The NBPA recently forwarded checks ranging
from $20,000 up to an excess of $50,000 to players as
part of the NBA's licensing agreement.

"Even though most fans will look as us and say we make
more than the average guy, we still have certain
financial obligations," said Darrell Armstrong, an
Orlando Magic free agent point guard who made about
$350,000 last season. "Me, personally, I've got a house
that I own in Atlanta. I usually just rent a condo in
Orlando during the season. But I've also got a family
[a wife and two children] to support, and every player
wants to help take care of mom. So that's what I try to
do. This $20,000 definitely will come in handy."

At the center of the dispute is determining how to
divide some $2 billion in revenues. The owners are
particularly adamant about holding the line on the
high-end salaried players. Last season, the players
accounted for 57 percent of all basketball related
income. The owners would like to push the number back
to the 48-to-52-percent range.

During a typical 82-game NBA regular season, paychecks
are issued every two weeks and represent 1/12th of a
player's salary. In a league where the average salary
is $2.6 million, this equates to about $116,000 every
two weeks after allowing for taxes and the standard 4
percent agent's fees.

It had been readily assumed that the players would be
more apt to make a deal once they missed out on a few
bucks. Not so, says union Executive Director Billy
Hunter.

"These guys didn't have to wait until Nov. 15 for the
reality to set in that they weren't going to get any
checks," Hunter has said. "This has been part of the
antiquated thinking of the league -- that something
magical would happen when a check doesn't arrive in the
mail. ... We've prepared [the players] for this.
They're prepared not to get checks through the month of
December if need be."

There are a handful of higher-paid players who can live
quite comfortably due to outside endorsement money.
Magic guard Penny Hardaway, for example, earns about
$3.5 million a year to endorse Nike, which created his
own line of sneakers as well as Li'l Penny action
figure that has been a commercial hit.

This past summer Hardaway, a native of Memphis, Tenn.,
purchased a home there after having rented one for
several years. He has plans to sell his mansion in
Isleworth to move into a $12 million house he hopes to
have built on another lot he purchased in Isleworth
once his contract situation with the Magic is resolved.

"Other than that, I'm pretty conservative," said
Hardaway, who earned $7.58 million basketball salary
last season. "I have money saved up, so the lockout has
not really affected the way I have to live my life."

It is times like this when players -- at least the
smart ones -- are thankful for agents, accountants and
financial advisers whose jobs are to preserve players'
financial fortunes.

Nick Anderson, who signed a six-year, $40 million
contract with the Magic last summer, admits he clashed
with his agent Bill Pollak, who forced him to put aside
money during his earlier playing days.

"Like a lot of guys, I was a young knucklehead when I
first got into the league," Anderson, a 10-year veteran
said. "Bill and my mother [Alberta Anderson] always
used to try to encourage me to save my money for times
like this, and I would argue with them that it was my
money and I should be able to do whatever I wanted to
with it.

"But even when I was in a disagreement with them, Bill
was putting money aside for me anyway. Now, I
appreciate what he was trying to teach me back then.
That's one of the reasons why I think I have the best
agent in the business."

Pollak, who admits he has lost clients who did want to
take his advice regarding saving money, operates under
a simple philosophy.

"You not only have to prepare the player financially
for times like this [lockout], you have to prepare them
for 10, 15 years down the road and beyond for their
retirement," Pollak said. "For now, it's important to
be careful with discretionary purchases. If something
is a necessity obviously you buy it. But if there's
something out there that you would like to have but
don't need, you simply wait until the lockout is
resolved."

For other Magic players, it has been much of the same.
They insist on living rather simply -- at least by NBA
standards. Even though they played for relatively
modest salaries last season, veterans Gerald Wilkins
($327,600) and Danny Schayes ($890,000) both have money
stashed away from having been in the league, 13 and 17
years, respectively.

"When it gets right down too it, I'm a pretty simple
guy," said Wilkins, who, like Schayes, is a free agent
and hopes to resign with the Magic and possibly end his
career here. "I've also been around for a while. So
that helps."

Magic forward Bo Outlaw, who made $1 million last
season, has perhaps an even more modest lifestyle than
some of his teammates. "Hey, look at me," Outlaw said
recently at RDV Sportsplex where he sported some of his
typical workout gear. "I always dress casual. I don't
spend a lot of money. Financially, the lockout has
affected me."

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