Andrew Bogut reveals how financials work in Australian Basketball League / News - Basketnews.com

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Patty Mills, Al Harrington, Stephen Jackson, Aaron Brooks, Josh Childress, Joe Ingles, Myles Plumlee, Hakim Warrick, Matthew Dellavedova - just a couple of NBA names that have played in the Australian Basketball League (NBL).

Matthew Dellavedova

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Most are drawn by getting back to or starting playing in their home country, some others go there to end their careers or just play without much stress. One thing is often overlooked, though - the financials.

The league basically has a three-part financial system. Everything starts with a salary cap but it's split into two parts - a soft salary cap and a hard salary cap.

The soft salary cap is the bare minimum the teams must pay their players throughout the season. It is set at 90% of the regular salary cap. The teams that cannot reach the mark are then subsidized from the funds collected from the teams that pay a luxury tax.

The regular salary cap is a figure above which all expenses are subject to the luxury tax.

The NBL set its 2021-22 cap ceiling at $1,637,893.94, while teams must pay players at least $1,474,104.55. These figures will rise by four percent for the next season, the ceiling at $1,703,239.36 and the floor at $1,533,068.73.

Each team must have at least eleven players plus at least one development player. Each of those eleven fully-contracted players is given a player value by an independent Contract Review Committee.

This separate value is counted towards the salary cap and not the actual amount the player is being paid for his play. However, the league's history shows that it is most often tightly correlated to the actual value of money the player is getting. If the team chooses to pay more, that amount is then counted towards the cap.

The exact spending of the teams is often kept under the rug. However, former NBA center and the current part-owner of the Sydney Kings NBL team Andrew Bogut has revealed his team's numbers.

"We were under the salary cap for the season and, just to keep things in perspective, that spend put the Sydney Kings in seventh for total spends," Bogut wrote. For reference, Sydney Kings played in the league's final this past season and won the series 3-0 against the Tasmania JackJumpers to win the trophy.

Bogut, in a message to members, said the club had a total spend of $1,501,592.63 last season.

However, under the NBL’s rules, teams can pay several players outside the cap, including marquee and next stars.

A marquee player must be an Australian or New Zealander that is being considered of a higher value. Including marquee players and the so-called imports, each team can only have four of them.

Andrew Bogut himself has been marked as a marquee player throughout his playing days in the NBL. No matter what marquee players are getting, only a certain set value is counted towards the cap. This allows the teams to pay the big local stars as much money as they are worth without being restricted to the league's standards.

All contracts of the import players, which are usually foreigners from the USA, are counted as 92 cents to the dollar. It offers teams some relief from having to pay luxury tax on the full amount.

There is also the Next Stars program – an initiative aimed at attracting some of the best talent from across the globe to come to the NBL to develop their game and prove themselves instead of doing so in the US college system.

These players are paid for by the league itself. When the league signs such a player, the league, all clubs that want him, and the player himself then work together on the best fit for the player.

Lastly, there is what is called a Special Restricted Player. Teams can sign players from China, Philippines, Taiwan, India, South Korea, Singapore, and Japan - those players are exempt from the salary cap.

If a club signs a player from one of these countries, they are exempt from the Salary Cap and are generally treated in the same way as a local player. One of them is the 2022 NBA Draft prospect and the current league MVP Kai Sotto.

Finally, the five lowest-paid players on each roster cannot have a combined player value of more than 40% of the salary floor, preventing the teams from signing all the best players to one team who would otherwise be starters on the other league's teams.

Being a country far far away, Australia has figured out a way to subsidize its teams to include local players in the league's teams and attract foreign prospects at the same time. The offseason is currently underway, and the league is looking to come back stronger than ever before.

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