The Los Angeles Lakers recently secured a thrilling victory over the Indiana Pacers in the NBA Finals, bringing home the championship trophy and a hefty financial reward for the players and staff. Under league rules, every player on the Lakers' roster, including head coach Darwin Hamm, received a $500,000 bonus.
Players with two-way contracts received $250,000 each, while assistant coaches shared a pool of $375,000. However, the celebratory mood may be tempered by the harsh reality of California's high taxes. After deducting federal and state taxes, along with other financial obligations, players are left with significantly less than their initial payout.
Shockingly, the state of California alone takes more than half of their championship winnings, leaving players with about $231,000. This harsh reality raises questions about the financial viability of playing in a high-tax state like California, even with the lure of fame and glory.
The government takes a large share of the pie
The impact of these taxes is especially evident for players like Anthony Davis, one of the NBA's best centers. While Davis has expressed his desire to not only win a championship, but also earn enough money to shower his loved ones with gifts, the reality of his after-tax earnings cast doubt on his ability to fulfill this desire.
With "only" $231,000 left over after taxes, he may have to dip into his $62 million annual salary to fulfill his holiday gift-giving plans. It's important to note that the $62 million figure represents Davis' salary before taxes.
After deducting a hefty $22.9 million in federal taxes, and other fees, his earnings drop significantly to about $24 million. The enormous financial burden faced by professional athletes in high-tax states means that the government earns more than the player.
The Lakers' victory in the championship deserves to be celebrated, although the excitement of the victory is undeniable, the financial implications of playing in certain states cannot be ignored.