While Most NBA Players Receive Salaries Throughout the Year, Kobe Bryant Recently Received a Large Lump Sum Payout of $24.3 Million

For players not as richly compensated as Kobe, having rock-solid individual disability protection can secure players' incomes should they suffer a career-ending injury, says Frank N. Darras of DarrasLaw.

November 15, 2013

While Kobe Bryant is recovering from surgery to repair a torn Achilles tendon, he received $24.3 million from the Los Angeles Lakers due to his guaranteed contract. As part of his specific contract, Bryant received a balloon payment on November 1 of $24,363,044. The remaining $6.1 million will be paid out over the course of a year.

Bryant's contract is far from typical as he is not an average player and his talent allows him much more bargaining power. Most NBA players receive their salaries throughout the year and there is a cap on how much a player can receive in advance. Bryant is right at that 80% maximum that was set as part of the 2011 collective bargaining agreement in 2011 ("Kobe Bryant will make $24.3 million today, could pay as much as $13 million in taxes, Ball Don't Lie, Yahoo Sports, November 1, 2013).

What is typical about Bryant's contract is that it is guaranteed. Part of the collective bargaining agreement made in 2011 was that NBA players will maintain their entitlement to fully guaranteed contracts. About 90 percent of all NBA contracts are fully guaranteed for payment on the day that they are signed by the player ("NBA players have best deal, ESPN.go.com, November 3, 2011). By comparison, only a small portion of NFL contracts are guaranteed at signing and mostly for superstar players.

"When it comes to disability, NBA players have the best protection in professional sports. Even if they are benched for the rest of the season, their salary is guaranteed. For the 10 percent or so who do not have guaranteed contracts, and for almost all other professional athletes, disability insurance is a necessity.

According to Snider Advisors, the chance of a 35-year-old suffering a disability that lasts three months or longer before age 65 is 50 percent. For a professional athlete who is engaged in rigorous physical activity and high impact daily, the odds are certainly much higher. Unlike the average American, professional athletes also rely solely on their physical bodies to earn their paycheck.

"Not only do they rely on their bodies to earn their paycheck, they rely on their bodies being in near-perfect condition to earn their paycheck. What might be a minor injury to the average American can spell the end of a career for a professional athlete. They must take steps to protect their earning potential and standard of living," says Darras.