The National Basketball Association (NBA) “All-Star” game takes place this weekend in New Orleans. It is one of the showpieces of the basketball season in the US as the best players from the league compete against each other (as East versus West) in a one-off game. Today’s NBA players are mostly millionaires, with the minimum salary a player can earn being $875,000 and the current highest paid player, LeBron James, earning just shy of $31,000,000 this year.
Players are also entitled to a $60,000 a year pension from age 62 for just three years’ “service” in the league. The maximum player pension is around $200,000 a year. On top of this, they can also enter into a defined contribution arrangement in which teams match their players’ contributions up to 140%.
However, the financial prospects of an NBA player didn’t used to be so rosy.
53 years ago in 1964 (when the minimum player salary was $7,500) the best basketball players of the time threatened to not play the All-Star game at all, in part due to a dispute over the league’s lack of a pension plan. The game was a crucial event for the league as it was the first time the All-Star game had national television coverage and the NBA at the time was struggling to gain much of a national following. The players leveraged this pressure on the league and used it to their advantage, calling a “strike” at the last minute. Moments before the tip-off, it looked like the biggest game of the season might not happen at all.
An emergency meeting was called in the changing rooms with the players demanding the establishment of a pension plan, alongside other demands about working conditions and the playing schedule. Despite protestations from the team owners, the NBA President was forced to guarantee the players that a pension plan would be adopted. The plan that was agreed to was a $2,000 endowment policy to which players and owners would each contribute 50%. The game went ahead with the East All-Stars winning 111 – 107 against the West but both sides winning a (more) secure retirement!