Bulls Ownership Received $9,379,603 million In Kickbacks

August 3rd, 2009 by Andrew Wamboldt

As originally pointed out by imagge on the RealGM forums, the Bulls ownership group received some additional money, a sum greater than $6 million, in escrow money.

The NBA’s escrow system is in place to make sure that players don’t receive more than 57% (except in a few cases) of the basketball related income (BRI) in salary and benefits. The league will take a certain percentage of a players paycheck (9% this past season) and put it into the escrow account. If there is an overage, some of the escrow money will be distributed back to the teams.

This past season, each team received $6,467,847.

This is in addition to the $2,911,756 that the Bulls received from being a team under the luxury tax.

That makes for a total of $9,379,603 in kickbacks for the Bulls from the league office.

However, savings for the Bulls don’t stop there. The Bulls also saved $1,600,000 for this coming season when they bought out Tim Thomas for $4,866,600 as pointed out by Mark Deeks on Bulls Confidential.

So between the escrow and tax kickbacks, and the Tim Thomas buyout, the Bulls saved a whopping $10,979,603.

When the Bulls are saving that much money through various avenues, it gets a bit annoying to hear Jerry Reinsdorf set the luxury tax as a hard barrier of sorts for the team. Those savings are more than enough to cover the cost of the luxury tax payment that would have been in order had the Bulls chose to retain Ben Gordon this past summer.

It’s really disheartening as a fan to see a player of the caliber of Ben Gordon become a tax casualty when the Bulls’ ownership group is saving that kind of money this summer.

Check out Larry Coon’s Salary Cap FAQ for more information on the escrow system.