Why was Curry deducted 5.1 million yuan? Detailed explanation of "third-party custody fees", all players will be reduced by up to 10% salary

NBA's 24-25 season financial report has come out. The league's basketball-related revenue this season is US$10.25 billion, which sounds very outrageous. But when the league is already making so much money, players generally have cut their salaries. The salary of all players was reduced by 9.1% based on the contract regulations. Curry's annual salary last season was $55.8 million, so he was deducted $5.1 million, while Jokic was deducted $4.7 million. Some players with basic salary contracts are no exception. For example, Brownie's annual salary last season was $1.96 million, so he would also be deducted 178,300. The reason for the salary cut is what we are going to talk about today: third-party custody fees.

In 2011, the NBA was suspended due to labor-management negotiations, and neither the player nor the boss were satisfied with their income. Finally, through negotiations, the two parties reached an agreement that in each year's league basketball-related income, the team boss will get at least 49%, while the player will get at most 51%. That is to say, after a season, the salary of all players cannot exceed 51% of the league's total income.

However, the players' contracts are signed in advance, and the annual income cannot be so accurate, so there is a third-party custody fee.

Simply put, 10% of the player's annual salary is temporarily entrusted by the league. If the player's boss's income reaches 49% or more of the league's total revenue at the end of a season, then the player's 10% will be returned as if it were. If it is not achieved, then extract it from this 10%, add 49% to the bosses, and return the rest to the players.

For example, when the accounts were settled after the end of last season, the team's owner's income was not enough for 49% of the total income, while the proportion of players' income exceeded. From the third-party custodial fund, 9.1% of the compensation will be deducted from the compensation to the team boss, and the remaining 0.9% will be distributed to the players. Take Curry's salary as an example. His annual salary is 55.8 million, and the third-party custody fee must be paid 5.58 million, and then the bosses will be given 5.1 million and refunded to himself 480,000.

If you think about it carefully, this approach in the NBA is actually quite reasonable, at least it can maintain a balance between the income of both parties. Nowadays, players' annual salary is getting higher and higher, and if the league's income also increases accordingly, everything is easy to say. But if the growth rate of the league's total revenue cannot keep up with the growth rate of players' annual salary, it will be a matter of time before the suspension is completed. Every year, this 10% can be mediated, which avoids the NBA's suspension again. If one day even these 10% of third-party custodial funds cannot make up for the income gap between the two parties, then the next labor-management negotiations may be suspended.