In this episode of The Matt Babcock Show, Matt Babcock explores the impact of NIL deals on college players deciding between staying in school or going pro. He provides insights into the NBA draft process, highlights key players, and offers advice for navigating these critical career decisions.
Transcript from The Matt Babcock Show: Draft Decisions, May 24, 2023
"So we just wrapped up the NBA Draft Combine this past weekend, and the NCAA Early Entrant Withdrawal deadline is right around the corner on May 31st. For underclassmen keeping the door open to return to school, some big decisions need to be made. Today, I will provide some insight into what these players are juggling behind the scenes as they decide to stay or go.
“I'm Matt Babcock, and this is The Matt Babcock Show.
"So I worked on the sports agency side of the business for more than ten years. Due to my role as a sports agent, I was often in the inner circle, advising players on the best steps to further their careers. This included conversations with underclassmen about whether they should stay in school or go pro.
"Well, it's been a tricky question for years. But here's the thing: I haven't been certified as an agent since 2017, and a lot has changed. Without a doubt, the most significant difference in recent years is the emergence of NIL at the college level.
"Let me explain why this has changed the decision-making process so dramatically. For an NBA first-round pick, their salaries are preset by a sliding scale, a mechanism that has been in place for years. The first pick is set to make the most, likely more than $10 million the first year, with the 30th pick likely making more than $2 million.
"First-round pick contracts are guaranteed for two years. You can do the math—it's good money. These contracts also include two years of team options, typically picked up by the teams.
"To make a long story short, if a prospect is projected as a first-round pick, I believe it’s generally a reasonable decision to remain in the draft. However, for projected second-round picks, it's an entirely different situation, especially now with NIL in play. Unlike first-round picks, second-round pick contracts are fully negotiable.
"Sometimes going in the second round is better for players, which was the case when I represented Jordan Mickey in the 2015 NBA Draft. We were able to negotiate him the most lucrative contract for a second-round pick in NBA history at that point, which was more than many of the first-round picks' contracts that year. However, that's not always the case. There is a lot of risk being selected in the second round and having to fully negotiate the contract.
"Each team has a different financial situation and often has different off-season agendas. For example, what if a team has little or no financial flexibility relevant to the salary cap? Or what if a team has a strategic plan to use cap space only for established players and use their second-round pick for one of their two-way contracts, which are very team-friendly?
"It makes the player and agent vulnerable because there’s little leverage to negotiate a good contract in those cases. This is where NIL needs to be included in the conversation. If a player is likely going to fall somewhere in the second round, they need to figure out how much money they’ll likely be able to earn through NIL if they decide to return to school. If they're looking to return to the same school, was that school reliable in paying the NIL money they promised? And if the player is looking to transfer, they'll need to ask around to ensure that the school lived up to its promises to players from the year before.
"Of course, talk is cheap, and these NIL deals are currently pretty loose. Still, some players are making significant money through NIL, so it needs to be taken seriously. It's challenging, but to make a well-informed decision, players must figure out how much they’ll likely be leaving on the table if they stay in the draft.
"A few players who participated in the combine and fall into this boat are Julian Phillips from Tennessee, Grant Nelson from North Dakota State, and Arthur Kaluma from Creighton, all of whom have their names in the transfer portal. All three are good NBA prospects, and if they remain in the draft, they have a chance to be selected. If not, I think it would be safe to say they’ll be on many NBA teams' shortlist for two-way contracts as undrafted free agents.
"However, if they pull their names out of the draft, they’ll be hot commodities at the college level. Due to the timing and limited options in the portal for schools, it could create a tug of war among schools with remaining budgets within their NIL collective, possibly generating some big money for these players. In this scenario, these players would be earning money while continuing to develop and hopefully elevating their draft stocks for the 2024 NBA Draft.
"Another notable difference nowadays is how the college and NBA games have changed from one another. The NBA game has evolved over time, becoming much faster and more spread out, while the college game has remained relatively the same as it was when I grew up in the 90s. This impacts the NBA pre-draft process because different players serve different levels of value at the two levels.
"For example, many people say that the big man is a dying breed. Although there is some truth to this statement, it only applies at the NBA level, not college. I don't think the big man has lost any value at the college level. Naturally, players like Zach Edey, Drew Timme, and Oscar Tshiebwe are the cream of the crop at the college level.
"Yet, they are not guaranteed to be selected if they remain in the draft. It’s been said that Oscar Tshiebwe made more than $4 million in NIL deals this past season while at Kentucky. If you’re one of these players, would you really leave school where you’re treated like a rock star and making big money to likely take a pay cut and maybe even spend time in the G League? I wouldn't.
"Another looming decision and unique situation I'm intrigued by is that of Dillon Jones from Weber State. Dillon Jones was terrific this past season. Subsequently, he was invited to the G League Elite Camp and earned a spot at the NBA Draft Combine. He did well and has put himself squarely in the NBA Draft conversation. If he keeps his name in the draft, it’s certainly possible he will get drafted.
"If not, I'm confident teams would be interested in signing him as an undrafted free agent. But Jones is in a different situation than the other players I mentioned. He did not put his name in the transfer portal. Although I respect Jones' loyalty to Weber State and find it admirable, it makes the decision-making process in this case tricky. Weber State is a smaller school in the Big Sky Conference, so I don’t expect that Jones would be able to generate a competitive amount from NIL deals. His decision-making process will be very different from that of Edey, Tshiebwe, or Timme, and more similar to how it used to be before NIL.
"As you can see, prospects testing the NBA draft waters must juggle a lot of moving parts. The traditional question in years past—should a player stay in school or go pro?—seems less fitting now. Although traditionalists still preach the concept of amateurism, these college players are professionals. They have to make significant business decisions early in their lives and careers. I understand that there are often no clear-cut answers for players and their parents as they decide to remain in the NBA draft or return to school.
"So I'd like to give a bit of advice. First, simplify everything as much as you can. Weigh out the pros and cons. No one can set your priorities. It’s your life and no one else’s, meaning there isn’t always a right or wrong decision.
"Do what's best for you, but be honest with yourself. And the last thing: whether you decide to keep your name in the draft or return to school, keep working hard. Regardless of your decision, you have a long way to go to accomplish your goals. Best of luck to all of you.
"I'm Matt Babcock, and this is The Matt Babcock Show."
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