Buyouts of European contracts (Ricky Rubio's burden)

The buyouts of European player services contracts are becoming increasingly important in the NBA. The NBA currently allows NBA teams to pay an amount not exceeding $500,000 to a basketball team other than an NBA team or to another entity to induce an international player to enter a contract with the NBA team. NBA CBA Article VII, Section 3(e)(1). Should the NBA consider increasing this amount in its next collective bargaining negotiation?

This low amount may raise issues relating to NBA prospect Ricky Rubio of Spain. Rubio is widely regarded as the second best prospect in this year’s NBA draft. However, Rubio’s buyout from DKV Juventut is rumored to be 4.75 million euros (approximately $6.6 million) and rises to 5.75 million euros ($8 million) after June 30. With NBA teams not allowed to pay an amount exceeding $500,000, Rubio will be individually responsible for the balance of the buyout.

Rubio has unsuccessfully attempted to negotiate a lower buyout with Juventut. The buyout is particularly burdensome for the young Rubio because he earned approximately $97,000 for his play this past season. Rubio's next step may be litigation, though it appears he will attempt to arbitrate the matter first. Because NBA teams may not contribute an amount exceeding $500,000, Rubio will be forced to almost solely to pay the buyout to Juventut. Should the NBA ease the path for talented players such as Rubio by raising the amount an NBA team may contribute to an international player's buyout, or would it weaken the league by making it easier to transfer team money abroad?

It is also rumored Rubio may attempt to use the liability as leverage. Rubio is not required to play in the NBA after being drafted and can continue to play for Juvenut in Spain. Rubio may claim he can not garner the endorsements necessary to pay for such a buyout in certain NBA markets. Rubio would attempt to parlay the buyout into selecting his own NBA team. However, this scenario appears to be conjecture that has not materialized.

Rubio's situation illustrates the need to increase the amount of a buyout which an NBA team may pay. Increasing the amount of a buyout may not give the NBA much leverage in future collective bargaining negotiations, however the league would be wise to ease the immigration of foreign basketball players to the league. The league should seek minimal barriers for the world's best players to participate in the NBA.