Weird NBA accounting fixes

Ronald Martinez/Getty Images/ZimbioThe NBA's Board of Governors met in Las Vegas during the NBA Summer League to discuss several potential rule changes, the renaming of the Bobcats and the potential for new cities to host NBA franchises in the near future. There was also some accounting.

Some odd accounting.

The Oklahoma City Thunder were reimbursed roughly $15 million because of the uncertainty surrounding the new collective bargaining agreement when they signed Kevin Durant to a five-year extension in 2011. The number int he contract actually was not a set number, but rather tied to whatever the max contract in the new CBA was going to be.

The kicker is that the new CBA added in the "Derrick Rose provision" which added increased raises and base salaries on the rookie extension if the player reached two All-NBA teams by the time the extension was agreed to. Oklahoma City inadvertently took advantage of this by signing Durant to his extension for a previously unknown amount before the new CBA and then designating Russell Westbrook for the five-year extension after the new CBA was approved.

The result? Oklahoma City was set to pay Kevin Durant much more than the team had originally anticipated because all of a sudden Durant was eligible for a much larger extension. Without the Derrick Rose provision, which was not part of the CBA when Durant agreed to his extension, would have received much less than he is now.

So the Thunder got paid back. Durant will still get his full $89.2 million salary. Just a portion of it will be paid for by the league.

Ronald Martinez/Getty Images/Chicago TribuneThen there is the Memphis Grizzlies. Or rather the state of Tennessee, the city of Memphis and the Grizzlies.

Zach Lowe of Grantland discovered an interesting bit of tax somersaults that occurs in the Volunteer State.

One of the strange tax bills players get is from the state of Tennessee. Tennessee charges players $2,500 players for each game they play within the state (they can only be taxed three times. As Lowe discovers though, that money does not even go to the state. It goes to the arena operators to help them make upgrades to the stadium and attract acts to the state.

Of course, in both of these instances we are dealing with vasts amounts of money most of us could not even relate to. The joys of NBA accounting.

Philip Rossman-Reich

About Philip Rossman-Reich

Philip Rossman-Reich is the managing editor for Crossover Chronicles and Orlando Magic Daily. You can follow him on twitter @OMagicDaily

Quantcast