One And Done- When Should a Player Go Pro?

I love hoops. Admittedly I'm a huge Baylor basketball fan. It was a tough year to be a fan. High expectations to start the season. The team was plagued by turnovers; sloppy play and just never hit its groove. Just a year ago, I was traveling all over the country to follow Baylor as they made it to the elite 8 where they lost in a terrific game against Duke (the eventual national champs).

One of the reasons for optimism heading into the 2010-2011 season was an athletic freak named Perry Jones. Perry Jones is 6'11" 235 lbs and has athletic skill that is extraordinary. He runs like a deer. His leaping ability is elite. He has a silky smooth jumper. But he is raw. He still struggles in many of the fundamental aspects of the game. Young and still learning.

Pro scouts are drooling over his potential. But many believe that he could use another year in college to hone his skills. But if he does decide to declare for the NBA draft after his freshman season (where he averaged 14 points and 7 rebounds), he will likely be drafted in the lottery (the first 14 picks in the 1st round) based on his potential.

The NY Times ran a good story on Perry earlier this month.

The question I will explore in this blog is should a player like Perry Jones go pro after his freshman year? Most basketball fans say, "Yes, take the money. You can always go back to school." But is this a wise financial decision?

The first 14 picks in the NBA draft have a rookie salary scale. This scale determines how much salary they will earn in the first 3 years of their NBA career. Those salaries range from an average per year of $4,752,000 for the top pick to $1,681,067 for the 14th pick in the draft.

After taking care of family members, agents (5%) and the government (45%), the player is often left with not so much to show for that first contract. The key to a successful NBA career from a financial perspective is getting the big 2nd contract and cashing in on endorsement deals.

Kevin Durant is a great example of this. He was clearly ready to go pro after dominating college basketball his freshman year at the University of Texas. He averaged 26 points; 11 rebounds; 2 blocks; 2 steals and was college basketball's player of the year. He has been an all-star in the NBA and recently signed a contract extension for $86 million for 5 years. He also reportedly signed a 7-year $60 million endorsement deal with Nike. In hindsight, his decision to go pro was a no-brainer.

There have been other forwards that we can compare Perry Jones to athletically that have also seemed to cash in well on going pro after one year in college. From 2003-2008 One and Dones (Forwards only) have produced Star NBA players- Carmelo Anthony; Chris Bosh; Luol Deng and Kevin Love. Solid NBA players- Thaddeus Young; Michael Beasley; Marvin Williams; and Tyrus Thomas. But also some guys that I would consider disappointments from the perspective that they weren't productive enough to get large 2nd contracts. Anthony Randolph; Brandan Wright and Kris Humphries. In each of those cases, those players would have probably been well served to stay in college longer.

The financial risk is not so great if a player stays in school from an injury standpoint. NCAA athletes are covered by a disability insurance program that allows them to take out loans to pay premiums at low interest rates. This coverage would pay up to $5 million in case of injury that prevents the athlete from getting drafted where he was projected before the injury. Loans while in college that help produce revenue for the NCAA are okay. But if a family friend gives your mom a loan to help pay the mortgage while you are an amateur, you will incur the wrath of the NCAA. But I digress.

There are plenty of college players who decided to come back another year and have used that extra honing of skill/experience to catapult them into NBA stardom and riches. Three come to mind without doing too much research- Blake Griffin; Lamarcus Aldridge and Rudy Gay.

The big decision for Perry and his family to make in weighing the decision is: Is he ready for the NBA physically and emotionally? Would another year of college improve his draft stock? Would it help him secure larger endorsement deals if Baylor were to make a deep NCAA run next year?

On the surface, it seems like the wise decision is to take the guaranteed money. But in reality:

1. The first contract is not that lucrative after taxes and agent fees.
2. The key to financial security in the NBA is the 2nd and 3rd contracts and also lucrative endorsement deals.

Would the player set himself up for a better chance of #2 if he stayed or went? That is the key question in my mind.

Ashley Hodge