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NBA rosters feature elite players from the U.S. and several other countries around the globe, making for an extremely high level of competition. All this talent has turned the NBA into a multibillion dollar industry. The NBA established its first team salary cap in 1983 under a collective bargaining agreement. Cap limits go up each year. The team salary cap for the 2010-11 season rose to $58.044 million, according to Hoops World.
Player salaries in the NBA are determined by various factors such as draft status, years of service in the league and ability. Players with more than 10 years in the league receive the highest minimum salaries. Similarly, rookies taken in the first round of their draft get the most lucrative initial contracts. Many stars boast annual salaries in the $10 to $30 million range. For instance, Forbes Magazine reported that Kobe Bryant of the Los Angeles Lakers was the highest-paid player in 2010 with $24.8 million in salary income. 2010 top rookie draft pick Blake Griffin was given a contract with an annual salary worth approximately $16 million.
Reserve players who spend most of their seasons riding the bench earn far less than their teammates in the starting lineup. As of 2010, the minimum salary for NBA players with less than 10 years in the league was roughly $460,000, according to the website 11 Points. This minimum rate goes up slightly each year to account for inflation, with an additional bump up to the veteran minimum of just more than $1.3 million after the 10th season in the league.
The league-wide average salary of NBA players was around $3.4 million for the 2010 season, according to Andrew Brandt on the Huffington Post. However, it should be noted that this figure is somewhat distorted by the enormous salaries of a few superstars.
Player salaries have grown at a tremendous rate over the years. However, the NBA's collective bargaining agreement expires on June 30, 2011. NBA Commissioner David Stern has already announced plans to cut back player salaries as part of a new bargaining agreement. Stern claims that the NBA has lost more than $1 billion since the current collective bargaining agreement went into effect at the start of the 2005-06 season. Stern aims to address these losses by cutting $750-800 million annually from player salaries and benefits packages. Of course, the NBA players association does not want to see these cuts made.