Image courtesy of USA Today Sports
In the aftermath of Duke University basketball star Zion Williamson’s freak sneaker blowout and injury, including Tuesday’s night’s upset loss to Virginia Tech, many have speculated on the future of the talented rookie and the tenuous position of sports prodigies in college.
Sports commentators and social media are abuzz with opinions on whether Williamson should return to play or sit out for the remainder of the season before entering the NBA draft in June.
Joel Maxcy, PhD, director of the Sport Management program of the LeBow College of Business, spoke with Drexel News Blog to provide insight on Williamson’s decision and the economics of injury risk for college athletes with professional aspirations.
Do you think Zion Williamson should return to playing when his injury heals?
Ultimately, it’s his choice and I think he will choose to play. As for all athletes, there is a chance of an injury that could cost him an NBA career, but the odds of that are long. He undoubtedly understands that risk but also seeks the considerable non-money benefits (in economic terms playing a sport is also a consumption good) of playing in March Madness and playing the part of key player, really, on an NCAA champion team, if Duke wins.
An injury can seriously impact the future and earnings of an athlete, how are players ensuring their earnings – especially if there is a game-changing injury?
There are companies that sell this type of specialty insurance against injury. Williamson is reported to have a policy that will pay him $8 million if he falls below the 16th pick in the NBA draft. Duke pays the premium. That amount of course does not cover nearly the full value of a successful NBA career, which could total hundreds of millions in just salary payments. But it is significant and offers protection for a short-term loss.
It’s been reported the NBA has proposed lowering the minimum draft age to 18. If enacted, how would the impact the league?
The main change would be for the few players that are ready for the NBA straight out of high school – Williamson is one, but there are just a few every year. The impact on the league competition overall is small, as it’s so few players. The effect is likely greater on the NCAA as that’s been more the focus of the pros and cons of the policy since it was instituted in 2006.
To me the more interesting thing is to see if the change affects how the G-League (developmental league) develops as a true minor-league option for basketball players. Players could go there right out of high school anyway but its relationship with the NBA and parent clubs as a developmental alternative to the NCAA seems to be on the increase. The change to a lower the draft age accelerate that as younger players could be drafted and sent to the G-league affiliate, as is the case with baseball and hockey.
What are some business savvy decisions professional athletes are making to secure their financial future?
They run the gamut. On the one hand, you have LeBron James who set the goal of becoming a billionaire as a very young player and seems to be very close to achieving that now. Besides Nike, he’s invested in media, entertainment, and more. His move to the Los Angeles probably has as much to do with his entertainment investment options as basketball.
Some players (and their agents) aggressively pursue these outside opportunities. Several such as Michael Jordan, Shaquille O’Neil, and Magic Johnson have become (seemingly) very wealthy. Current stars and currently LeBron, Aaron Rodgers, and Chris Paul appear to be on their way as well. Of course, the most lucrative sponsorship opportunities go to the most famous players.
The main extra income sources are sponsorship advertisements and, most prominently, shoe deals. Jordan set the standard, but LeBron is the first to have a lifetime contract with Nike. The top stars earn at least $8-10 million per year from Nike, Adidas, etc. and a few earn more than that. Nearly all NBA players have a shoe sponsorship, but for the bench players it may be no more than shoes, gear and a few thousand dollars.
There are also a tremendous number of professional athletes who fall to the many spending temptations and end up broke and file for bankruptcy soon after their careers end.
Media interested in an interview with Joel Maxcy, should contact Annie Korp at 215-571-4244 or amk522@drexel.edu.
