2014 Big Ten Basketball Awards Show
Here is the full show for those who missed it. Skip to 25:28 and 36:10 for the important parts. Enjoy GO BLUE!!
I had missed it last night.
This is a serious quesiton..... sorry for the digression.... but with insurance supposedly available, why wouldn't a guy like Stauskas strongly consider staying a third year, rather than jump to the NBA ? I wondered about this... that another year in college has to be worth something as far as happiness, not to mention the likely incremental improvement in his game. Perhaps the insurance cost isn't worth it relative to the possible payout in case of an injury... someone knolwedgable on this subject, please enlighten me here. Thanks in advance.
You are correct. The insurance only pays out for a career ending injury, meaning if the player is physically no longer able to play. An injury that diminishes althleticism and earning potential does not neccissarily get the player any insurance money.
March 11th, 2014 at 11:12 PM ^
He may simply want to be an NBA player. He grew up in Canada, where there is no real college sports culture, so he isn't necessarily living a dream by being a Michigan player right now. It's also possible that he's tired of school and wants to focus on basketball. Not everyone wants to be a college athlete.
There are two major things at play here: (1) Likely draft position in this year vs. future years. (2) Lost income by staying in college. Some guys put their own personal priorities over these financial considerations (in some cases, the prospect of serious money sooner rather than later trumps everything; and in others guys highly prioritize the college experience, etc.), but this is the type of math they'll be taught to think of. One at a time:
(1) Likely draft position. The NBA has pre-defined salaries (+/- 20%) for rookies based on when they were drafted. Being drafted #15 overall means about $ 3 million over the first two seasons. Climbing to #10 would mean $3.9 million. So if he felt like he could go from #15 to #10 by staying around another year, he could stand to gain $900,000. The 3rd year option would be another $500,000, but the 4th year option brings them within $200,000. So over those 4 years the draft position could net him a total of $1.6 million extra. But the probability of jumping up comes into consideration, offset by...
(2) Lost income. People typically underestimate the impact of this. Professional atheletes have very different careers than a typical undergrad, obviously. They are limited by age. So while a typical undergrad could stay in college an extra year with minimal impact on lifetime earnings (it is one of let's say 40 years worked, plus they could opt to retire one year later, too), it literally removes an entire year out of a much shorter career. People then assume this means they lose that first year of income (in this example, $1.5 million). In reality, they are likely to lose one of their highest years of pay -- after all, he's still going to make $1.5 million, just a year later. But he is now retiring at the same age with one less year in the NBA. Here's an example of a guy drafted #15 in 2001 that looks fairly representative of how salaries change in a player's career:
Steven Hunter:
| 2001-02 | Orlando Magic | NBA | $1,244,880 |
| 2002-03 | Orlando Magic | NBA | $1,338,240 |
| 2003-04 | Orlando Magic | NBA | $1,431,600 |
| 2004-05 | Cleveland Cavaliers | NBA | $1,000,000 |
| 2004-05 | Phoenix Suns | NBA | $720,046 |
| 2005-06 | Philadelphia 76ers | NBA | $2,800,000 |
| 2006-07 | Philadelphia 76ers | NBA | $3,024,000 |
| 2007-08 | Denver Nuggets | NBA | $3,248,000 |
| 2008-09 | Denver Nuggets | NBA | $3,862,600 |
| 2009-10 | Memphis Grizzlies | NBA | $3,696,000 |
If he stayed in school an extra year instead of leaving as a sophomore and still retired at the same age, he would have lost $3,696,000. Even when you adjust for inflation, that's a HUGE difference from the potential gain of moving up to #10 in the draft.
I'm going to simplify a little of the other smaller aspects of the math (injury costs, inflation, etc.), but based on these major factors he'd have to be 100% certain that instead of going #15 this year he'd go #7 next year, and that would just be to breakeven. In order to come out substantially ahead, he'd have to be pretty sure he'd be in the top 3.
One other thing - consider the example guys are warned to think about, but usually don't. That your draft stock may actually go down. Stauskas has a good example of this with McGary. Even if McGary gets the benefit of the doubt by GMs and is drafted a lot higher than his current early 2nd round ranking (which comes with no guaranteed money), he'd lose over $1 million from sliding from #15 to #20 this year, plus lose the salary in the last year of his career (which, for his age and size, is likely to come a lot sooner than Stauskas). If you think he'd be making $5 million a year towards the end of his career, his decision to stay this season would cost about $6 million.
March 11th, 2014 at 11:09 PM ^
So deducing from these educated responses, its likely that Stauskas leaves as hes slated at 15, but if Glenn and Mitchs projections arent in at least the mid 20s of the first round, that theyll likely stay as to attempt to improve stock to get into first rd, otherwuse theyll leave too.
It's insurance against a carrer ending injury - not a fall in draft stock.
It costs real money (20-30 thousand per year) at a time when the athlete has no income to cover such a cost.
Taken these two together Mitch McGary could have taken one of those polices out prior to this past season and he would have recieved nothing, even though he missed a year due to injury and has seen his draft stock slide.
This is for the program offered by the NCAA. The details for such policies vary.
A third thing to consider is to look at who the NBA drafts.
2013 3 of the top 15 were in college for more than 2 years, 5 were freshmen and 6 were sophomores.
2012 3 of the top 15 were in college for more than 2 years, 6 were freshmen and 6 were sophomores.
2011 5 of the top 15 were in college for more than 2 years, 4 were freshmen and 3 were sophomores.
2010 6 of the top 15 were in college for more than 2 years, 4 were freshmen and 5 were sophomores.
You have to be wary of giving NBA scouts too much film to pick you apart. This was his first season of not just a shooter, give them another year and they may see something they don't like.
Another year at Michigan would give his dad time to retape the driveway court into a pro configuration and Nik could start making NBA 3's on YouTube.
Wow--Beilein really talked up his award. Too bad they didn't show him receiving the trophy, zipping down his pants and pissing on it (while eating a sub).
Seriously, though. I love his attitude. Giving (well deserved) props to Miles and immediately transitioning to talk about the team. Classy guy all the way.
I liked how Dan Revsine seemed a little taken aback by Beilein's reply and felt the need to reiterate that he was the media selection. You're right, however - John Beilein is a classy guy all around and is not afraid to recognize his compatriots in the conference for their impressive achievements as well.
It's not so much about injury, which insurance can cover (somewhat) as you mention. The NBA draft is a very selective process with huge guaranteed contracts in the top 15, pretty solid contracts in the later 15, and nothing guaranteed after that, and they get paid substantially less. The almost irresistible draw to jump early comes from stock reports of where kids will get drafted. Stock varies so much and can drop in an instant with a injury that can "worry" scouts, a few bad games, a perceived flaw that gets exposed, or anything else, so if guys get a top 15 grade they have to seriously consider it. The NBA is 99% of these kids dream job and is financially a jaw dropper for most people so I don't care how much he loves UM, happiness awaits in the NBA too.
This is exactly the response I meant in my long-winded post above about the actual cost of skipping a year of the draft. Not to pick on you, but Lewan likely cost himself an enormous amount of money. Probably about 10%, if not more, of his NFL earnings. In the grand scheme of things, he may be (clearly was) willing to accept that because he assumes he'll earn more money than he knows what to do with, but that's not the same thing as not costing much money.