Greece Loses Magnetism for NBA Millionaires as Tax Doubles
NBA player Josh Childress
Roberto Serra/EB via Getty Images
Josh Childress, seen here playing for Olympiacos during the Euroleague Basketball Final Four Final Game between Regal FC Barcelona vs Olympiacos in Paris.
Josh Childress, seen here playing for Olympiacos during the Euroleague Basketball Final Four Final Game between Regal FC Barcelona vs Olympiacos in Paris. Photographer: Roberto Serra/EB via Getty Images
Greece’s financial crisis is bad news for National Basketball Association players seeking bigger paychecks and rent-free mansions by the Mediterranean.
The Greek basketball league has enticed more than 100 NBA players since nine-time All Star Dominique Wilkins left the Boston Celtics in 1995 for Panathinaikos in Athens. Greek clubs are known for covering players’ taxes and housing costs as well as paying multimillion-dollar salaries.
That’s changed because of the recession and after the income tax rate for athletes more than doubled, according to Marc Cornstein and other agents who represent players in Greece. Greek teams have been reducing salaries by as much as 70 percent, letting players go and cutting the amount of perks.
“It’s not that players have said they don’t want to go to Greece, it’s just that the offers coming from Greece haven’t been forthcoming,” Cornstein said from his office in New York. “The market has moved much slower this year.”
Josh Childress, 27, joined the Phoenix Suns and Linas Kleiza, 25, went to the Toronto Raptors after they exercised contract options in July to leave the Athens-based Olympiacos club.
Childress joined Olympiacos in 2008 from the Atlanta Hawks and was given a three-bedroom apartment, Volvo car and personal chef on top of a three-year, $20 million deal, the New York Times reported at the time. Kleiza joined him at Olympiacos after he left the Denver Nuggets in 2009.
“I got treated very well,” Kleiza said in an interview. “They get you a house, they get you a car,” and pay the income tax, he said. “In the NBA, you’ve got to do everything on your own.”
Budget Deficit
Many Greek clubs can no longer afford to cover players’ income taxes, according to Teta Stefanou, a player agent in Athens. Greece lifted the rate for athletes with a salary of over 100,000 euros ($126,170) to 45 percent from 21 percent on Jan. 1 to narrow a budget gap that reached 13.6 percent of gross domestic product last year, more than four times the European Union limit.
Greek teams also are being hurt by an economy that shrank at an annual rate of 3.5 percent in the second quarter. Sponsors “aren’t exactly knocking on our door,” said Vasilis Vourtzoumis, general manager of Aris, which won the last of its 10 Greek championships in 1991.
The league, which opens in October, is relying on rookie players to lower costs, said Elias “Lou” Diamantopoulos, who owns the Athens-based player agency Diamond Sports.
“This is probably going to be the worst year for all of us,” said Diamantopoulos, who set up his agency in 1998. “It’s very slow.”
‘More Difficult’
Many former NBA players are paid in dollars and salary- related expenses increased as Greece’s debt woes weakened the euro, Vourtzoumis said. The currency fell 19 percent against the dollar during Childress’s two-year stint in Greece.
Childress didn’t reply to a request for comment for this story made via the Suns.
“We are still looking to the U.S. for players, but it is more and more difficult,” Vourtzoumis said. Aris’s former NBA players include two-time All Star Reggie Theus.
Greece was Europe’s top league after Spain and Italy, according to the most-recent rankings by the Union of European Basketball Leagues in Barcelona in 2007. The three leagues draw the most NBA players, according to Italian league spokesman Maurizio Bezzecchi.
Olympiacos and Panathinaikos have the means to sign NBA players because of the wealth of their owners, Kleiza and several agents said. On Aug. 5, Olympiacos hired Radoslav Nesterovic, a 7-foot center who played in the NBA with the Toronto Raptors last season.
‘Like a King’
Olympiacos is bankrolled by Panagiotis and Giorgos Angelopoulos, whose interests include shipping and steel. Panathinaikos is run by brothers Pavlos and Thanasis Giannakopoulos, who own Vianex SA, an Athens-based pharmaceutical company.
Officials at Olympiacos and Panathinaikos didn’t immediately respond to phone calls and e-mailed questions about their finances.
Wilkins, a 6-foot-8 American, moved into a four-story mansion with marble features, and had two cars and a maid provided for him by Panathinaikos, which also agreed to pay income tax on his two-year, $9 million deal. Those days of what Wilkins in a 1998 interview called living “like a king” are over, according to Stefanou, the agent in Athens.
“Now teams will be asking the players to contribute to their living costs,” Stefanou said. “If the players want a bigger house, they will have to pay for it themselves.”
To contact the reporter on this story: Alex Duff in Madrid at aduff4@bloomberg.net.
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