Why Dwyane Wade and Other NBA Superstars Are Underpaid

Roy Burton@thebslineContributor IOctober 2, 2011

NEW YORK, NY - SEPTEMBER 30:  Derek Fisher (C), President of the National Basketball Players Association is surrounded by NBA players (L-R) LeBron James, Carmelo Anthony, Dwyane Wade, Paul Pierce and Baron Davis, among others, as he speaks at a press conference after NBA labor negotiations at The Waldorf-Astoria on September 30, 2011 in New York City.  (Photo by Michael Cohen/Getty Images)
Michael Cohen/Getty Images

Two days before his now-infamous confrontation with NBA commissioner David Stern, Miami Heat guard Dwyane Wade made a far more important statement during an interview with Yahoo! Sports last week.

When asked how much he would be paid in a system without a salary cap structure, Wade responded: "I'm sure [the bidding] would get to $50 million."

Wade—who earned $14 million in 2010-11—essentially said that he was underpaid last season.

Even though it's a hard sell in today's economy, he's absolutely right.

In theory, most people who create revenue for for-profit entities are not paid according to their true financial value. If corporations compensated everyone for how much money they actually bring into the company, many businesses would struggle to stay afloat.

Despite their impressive salaries and often exorbitant bonuses, successful CEOs couldn't possibly be paid in accordance with the profit they generate each year—that financial structure simply isn't economically viable.

From a basketball perspective, it's difficult to accurately quantify the value that a player like Wade brings to the Miami Heat (and to the NBA, for that matter). However, between ticket sales, merchandising, television and radio contracts and other marketing/promotional ventures, Wade had far more than a $14 million impact to the Heat's financial statements last season.

If Wade's assertion that he and other superstars are worth $50 million is correct, no team in the league could feasibly pay them that amount of money. The only way it could happen is in the absence of a salary cap structure—a move that would threaten the competitive balance of the entire NBA.

NEW YORK, NY - JUNE 30:  Billy Hunter, Executive Director of the NBPA speaks about the NBA labor negotiations as the deadline looms at Omni Hotel on June 30, 2011 in New York City. According to reports, the NBA has locked out the players after they were u
Neilson Barnard/Getty Images

When Michael Jordan earned $63 million during his final two seasons with the Chicago Bulls, many people considered it "back pay" for the previous nine years of his career when he was paid a total of $25 million. In reality, $63 million didn't come close Jordan's true value to both the Bulls and to the NBA as a whole during that time period.

The economic system in the NBA isn't perfect. It doesn't take much effort to find at least one player on every roster who doesn't generate as much revenue as he was paid last season.

By that same token, there are those in the corporate world who are compensated well, but aren't all that valuable to their organization. It happens, but it doesn't necessarily happen by design.

Again, Wade's words won't engender much sympathy among most fans, especially with an unemployment rate in excess of nine percent. It's hard to convince people that a basketball player who earns $14 million a year deserves to be paid more when there are hundreds of thousands of teachers, police officers and firefighters who are grossly underpaid.

Is an excellent teacher more important to society than a shooting guard who averaged 24.5 points per game in the NBA last season? Probably. But in our economic system, people are largely paid for their impact to a company's bottom line, not solely for their contributions to the greater good.

If Wade and other superstars truly felt that they needed to be compensated fairly, their only recourse would be to reform the current salary structure. It isn't likely that another entity—say, some team overseas—will give them the same financial security offered to them in the NBA.

That wasn't Wade point, however. He wasn't complaining about his station in life, nor was he asking for a bigger contract. He was merely stating the truth.

These labor negotiations aren't about him or LeBron James or most of the other players who sat down with Stern and several league owners this past weekend. The superstars will always get their money. It just won't be as much as they may be entitled to.

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