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J.R. Smith has been paid out half of the three-year, $17 million-dollar contract he just signed

Jul 27, 2013, 11:00 PM EDT

John Starks, J.R. Smith AP

The rules of the NBA’s collective bargaining agreement are fascinating to a certain segment of NBA fans, so with that in mind, we bring you this financial quirk involving J.R. Smith.

The reigning Sixth Man of the Year signed a three-year deal worth just under $18 million to remain with the Knicks a few weeks back, and using the rules (potentially) to his advantage, has already been paid out at least half of the entire value of his contract.

From Frank Isola of the New York Daily News (via HoopsHype):

A league source confirmed that J.R. Smith has already been paid $8.974 million of the $17 million contract he signed three weeks ago. Smith agreed to a two-year deal worth $11 million with a player option for a third season. Five days after agreeing to a new contract, Smith had knee surgery that, according to the club, will sideline him up to four months.

This doesn’t affect the Knicks’ cap figure in any way, and theoretically (if Smith invests the money wisely) it would be beneficial to the player to get paid out as much as possible immediately to begin to earn interest on those otherwise future dollars.

Mark Deeks, who runs the comprehensive NBA salary site ShamSports.com, explained how this fits within the league’s rules a few days back.

Smith did NOT get 80% of his contract paid up front. That’s not allowed. What IS allowed, however, is having 50% of your base salary given..

…to you as an advance prior to November 15th of the relevant season (no more than 25% before October 1st.) This is what Smith has done.

It’s a smart decision, provided Smith does something productive with all of that up-front cash.

  1. mp4philly - Jul 27, 2013 at 11:15 PM

    Pretty sure he’s not concerned with earning interest off of that cash.

    • fanofevilempire - Jul 28, 2013 at 1:36 PM

      he is going to invest in some shoes for his whip, 22″, look for him in DUBS………

      Just kidding, I hope his moma gets her hands on that check
      and I’m not talking about RiRi either. I just hope this doesn’t
      end with another broke baller.

  2. bball1950 - Jul 27, 2013 at 11:34 PM

    As Melo had said on someone else contract, ” That’s a ridiculous contract”.

  3. asimonetti88 - Jul 27, 2013 at 11:37 PM

    I don’t necessarily get the feeling he’s getting paid to earn interest.

  4. hartdaddy - Jul 28, 2013 at 12:13 AM

    Fact of the matter is that JR is getting less money than Kyle Korver, Tyreke Evans, Kevin Martin & equal to Gerald Henderson. Which is a STEAL no matter how he gets his money.

    • xLith - Jul 28, 2013 at 12:44 AM

      Half of those guys you mentioned CONSISTENTLY score. They don’t take nights off regularly like J.R. does.

      • cr7tique - Jul 28, 2013 at 10:37 AM

        So I guess JR won the 6th man award because they just hand them out like candy nowadays. You shouldn’t comment unless you’ve seen him play every game, he was inconsistent in the playoffs because of a torn meniscus and other knee issues.

      • jimeejohnson - Jul 28, 2013 at 12:35 PM

        J.R. takes it easier when his Mom stays home.

      • knightrider1755 - Jul 28, 2013 at 3:34 PM

        J.R. routinely takes postseasons off. I guess he’s just a regular season kind of guy.

    • fanofevilempire - Jul 28, 2013 at 1:38 PM

      what did those guys win?

  5. anhdazman - Jul 28, 2013 at 12:38 AM

    He needs all that money early so he can “make it rain.”

    Guarantee he’s going to be another broke athlete when his time has come.

    • adoombray - Jul 28, 2013 at 1:33 AM

      Wow dude, closet racist much? Gets into one bar fight when he’s 22 and gets covered in tattoo’s and that automatically makes him a thug who will be broke? We ALL do stupid things at bars when we are 22. By all accounts he is a model citizen these days and it isn’t appropriate for anyone to judge another man on how he makes or spends his money.

      • 00maltliquor - Jul 28, 2013 at 4:15 AM

        Yeah! You tell him adoombray! How dare he get on the man who recklessly ran through a stop sign onto oncoming traffic that killed his friend in the passenger side!

      • mtr75 - Jul 28, 2013 at 8:12 AM

        “We ALL do stupid things at bars when we are 22.”

        Actually, believe it or not, we don’t ALL do stupid things in bars when we are 22. Spare me the self-righteous outrage.

      • anhdazman - Jul 28, 2013 at 10:39 AM

        Guess you don’t know much about JR Smith’s history.

      • jimeejohnson - Jul 28, 2013 at 12:36 PM

        Newsflash: stupid white guys piss their money away too.

  6. glink123 - Jul 28, 2013 at 12:48 AM

    think how many tigers he can buy!

  7. timb12 - Jul 28, 2013 at 1:47 AM

    He’s going to blow Tyrone Biggums $450,000 crack party out of the water!

    • runthepicketfence - Jul 29, 2013 at 10:10 AM

      This is the funniest thing I’ve read in a long time. I’m still crying over this one. Freakin hilarious!!!

  8. kingwithringz - Jul 28, 2013 at 1:50 AM

    (no more than 25% before October 1st.) (Last paragraph) So how did he get 50% of his base salary given?

    • casualcommenter - Jul 28, 2013 at 7:36 AM

      Yeah, I’m glad I wasn’t the only one who noticed that the article begins by saying J.R. Smith has gotten over 50% of his 3-year contract base salaries paid up front, then the article ends with an explanation of CBA rules that says he is only allowed to get 25% of his base salaries up front.

      It’s like, “…Okay. I’m pretty sure the Knicks wouldn’t blatantly violate CBA rules, so clearly, there’s a clause that hasn’t been mentioned allowing so much cash to be paid upfront.”

  9. norvturnersneck - Jul 28, 2013 at 2:27 AM

    With former NBA players as a guide, I’m guessing most of that money is blown on cars, tats, weed, an houses. Him and Vince Young should hang together and discuss bankruptcy.

    Make it rain!

    • jimeejohnson - Jul 28, 2013 at 12:38 PM

      Weed? You talkin’ about cannabis, bro? You’ve got to be a human chimney or a Rastafarian to piss big money away on it, unless you live in New Yawk and pay inflated prices for garbage.

  10. yousuxxors - Jul 28, 2013 at 4:06 AM

    do a lot NBA players do this?

    • casualcommenter - Jul 28, 2013 at 7:41 AM

      Not a lot, but it’s somewhat common.

      Usually, early payouts are a “sweetener” attached to deals in which a player agrees to take a hometown discount to stay with his favored team.

      The player’s agent argues that if his client is going to take less than market value to play for a team, then that team should pay him more money upfront to compensate. That way, his client could (in theory) invest the money early and make up for some of the money the player “lost” by taking a hometown discount.

  11. mrstevenirizarry - Jul 28, 2013 at 5:53 AM

    A lot of the comments here are based on ignorance…
    I have happened to frequent some of the same venues as JR Smith after a Knick home game.
    Unlike most people’s perception JR doesn’t go out to spend lots of money on a bunch of his friends… Most of the time he would arrive with only one person and stay out for a short period of time.
    What one man does with the money he has worked his whole life for is his business.
    Most athletes get hated because they take more money to leave the team they made a name for themselves.
    You see a man who just won the sixth man of the year take less money than some lower caliber shooting guards this summer to stay home.
    Let’s celebrate that!

    With that said, I hope JR spent some of that nine mill on home equipment to rebuild the strength in that knee.

  12. stephenolszewski - Jul 28, 2013 at 8:18 AM

    That’s probably not a good idea…

  13. worldsmostfamous - Jul 28, 2013 at 10:23 AM

    Two things:

    1) How can he elect to receive “Half” of his 17 million, if the third year is a player option? What if he has an insane second year and wants to opt out but already spent the money? He is only truly guaranteed 11 million.

    2) While I’m not sure how particularly common this is, Kobe gets two paychecks a YEAR, each for $16 million.

  14. jimeejohnson - Jul 28, 2013 at 12:40 PM

    J.R. Smith didn’t win the 6th man award for nothing. The guy has uncanny skills albeit bad judgment. Nobody’s perfect.

  15. dmaq1 - Jul 28, 2013 at 3:33 PM

    Should read ” J.R. Smith has spent half of the three-year 17 million dollar contract he just signed.

  16. ddmcd1974 - Jul 28, 2013 at 7:58 PM

    Adoom and jimmijohnson are exactly what is wrong in this country at this time. The guy you two clowns responded to never mentioned anything but saying smith would prolly be an athlete whom is broke later on. Adoom called him a racist and jimmijohnson pointed out white guys go broke to. You two blow big balls. Why do either of think he was only talking about black basketball players. He never said that. Never even disguised it. Just said broke athlete. But no you two dirtbags gotta go all out and over him with racial crap. Pathetic. Hate people like you two.

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