Credit: Zuma Press - Scanpix, BNS | BasketNews illustration/E.Alšauskas
Credit Zuma Press - Scanpix, BNS | BasketNews illustration/E.Alšauskas

Over €10M earnings in nine months only from buyouts. That's one-third more than the total Zalgiris budget for the 2021-22 season. Spanish teams are well known for selling their players at a high price. However, Real Madrid took it to another level. How to justify these gigantic deals by the Kings of buyouts? 

Facundo Campazzo

Facundo  Campazzo
Position: PG
Age: 30
Height: 179 cm
Weight: 75 kg
Birth place: Cordoba, Argentina

This buyout saga started with Facundo Campazzo, who left Real for the Denver Nuggets on a €6M buyout in November 2020.

In April, Gabriel Deck left Madrid for the Oklahoma City Thunder on a €1.3M buyout.

Recently, Usman Garuba went to the Houston Rockets for a €3M buyout.

That's a €10.3M income from buyouts in less than a year. For comparison, the EuroLeague playoff contender Zalgiris declared a €6.8M total budget for the 2021-22 season.

How do they manage to sign players with such buyout conditions? BasketNews talked to basketball people who explained the insights of transfer business in Madrid.

The NBA-like environment

First and foremost, Real Madrid is not a transit team. When it comes to the Royal club, we are talking about the top-class. If they sign you, it means you're the best for this position, and your job is to help them win all the titles. They provide you with the best conditions to reach common goals, but that requires accepting certain rules. Like putting massive buyouts in agreements. When was it easy to leave the Royal family, huh?

Let's begin with a starter pack which you get as soon as you become the Real Madrid player.

Former Madridistas compare Real Madrid conditions to the NBA teams. Real provides you with top-class support. From the private charter flights to finding you an apartment, getting your family members tickets to the Final Four and guiding them in the host city, or even getting your wife a translator for a pregnancy check-up at Madrid's hospital.

The Spanish capital also offers perfect weather, great restaurants, nightclubs, International schools for kids, or even tickets to FC Real Madrid games at the best price. And they even pay in advance.

In Madrid, you have to take care of nothing else but basketball.

"They work like the NBA club," Jonas Maciulis, who helped Real win the EuroLeague in 2015, said to BasketNews.

"They take care of you so much that basketball is the only thing which you have to think about," Maciulis explained. "It sounds simple, but when you live with it, you see. For example, you see how charter flights save you time and energy. Most of the EuroLeague teams have a flight during the day off. But here you can fly back home after the game, get a good sleep at home and spend the next day with your family. Staying with a clear head and spending more time with your family is a huge advantage. Not all teams have the same privilege."

"When it takes conditions, the city... It's like in the NBA," one International basketball agent told BasketNews. "They worked on their image for years, as well as building these conditions for players. If you want to get there, you have to accept their rules. It's that simple."

Credit Real Madrid

Take the buyout seriously

Do you have to accept their rules, including a buyout of 3M, 6M, or even more? Every situation and every individual is different. 

For example, Usman Garuba signed a six-year deal with Real Madrid when he was 17. According to BasketNews sources, he was set to earn almost €2.5M before taxes in six years with Real. When you're 17, sometimes these numbers can stun you. Sometimes it also might shock your agent, especially if he's looking for short-term rather than long-term gains.

Facundo Campazzo's story was a bit different. He had some NBA interest before signing a contract extension with Real in 2019. His previous deal in Madrid included a €1M NBA buyout. But the NBA opportunity blew up, and he decided to commit to Real for €15M gross over five years. By putting his signature on documents, he thought he wouldn't have a chance to make it to the NBA anymore.

Two years later, Nuggets approached him again, offering a two-year deal. But the situation was much more complicated. Campazzo had a €6M buyout included in his contract. Per NBA rules, the Nuggets could cover only $750k, which meant Campazzo had to pay the rest of the buyout himself.

Most of the players in Facu's situation would have stayed in Real. For the same reason, NBA teams don't look at the possibility of bringing Walter Tavares to the NBA seriously. According to BasketNews sources, Tavares' buyout is even more significant than the one Campazzo had. But Campazzo had an exceptional desire to give a shot at the NBA, despite substantial financial obligations.

The salary Campazzo earned in Madrid at the beginning of season 2020-21 helped cover part of his buyout. Also, he agreed to pay the rest of it in separate installments over the years. In two years with the Nuggets, Campazzo will earn $6.4M gross. Technically, it won't be enough to cover his buyout from Madrid. But that's how much Facu wanted to test himself among the best in the world.

Gabriel Deck was paid around $500k per year in Madrid before signing a 3-year $11M contract with the Oklahoma City Thunder, which was guaranteed for only $3.87M. He will need to cover half of his $1.5M buyout by himself.

Usman Garuba signed a four-year $11.8M contract with the Houston Rockets, including $4.9M guaranteed. Again, he'll have to cover the €2.25M difference from his €3M buyout in separate installments.

BasketNews sources say that Real has a rigorous approach to buyouts. Usually, there are no last-minute changes, and you have to follow every contract clause you agreed to. That left some former Real players hurt because of the way they parted with the Royal club, sources say BasketNews.

Best agents around Europe suggest avoiding such enormous buyout clauses. They criticize their agents for trapping their players, by agreeing to terms in the club's favor. But the perception of the NBA-out scenario might look different years prior to getting a real opportunity to enter the NBA.

What is 3 million for Real Madrid?

BasketNews tried to reach out to Real's front office for a comment, but Madrid stuck to their policy of not commenting on their financial operations publicly. But basketball insiders around Europe emphasized few more points.

When it comes to signing young prospects to contracts that include big NBA buyouts, Real Madrid invests millions every year only to maintain their youth system. It includes accommodating a hundred players in huge apartments in Ciudad Real Madrid, first-class training facilities, catering, game rooms, etc. That's a beautiful environment for every young prospect looking for the best conditions to develop and reach their basketball dreams. The buyout they ask might look fair for how much they invest in scouting, recruiting, and developing prospects from all over the world.

Also, playing for Real Madrid guarantees you the best platform for getting the attention from the NBA. It's one of the most followed European basketball organizations by the NBA clubs, which helps their players gain interest from the strongest league in the world.

Besides excellent conditions both for the first and youth teams, they can offer you good money. Most of the time, Madrid puts the best deal on the table. But getting paid well requires accepting the rules of the Royal club, including a massive buyout. If you don't like it, you can sign for less money with a different team.

"When you get once in a lifetime chance to be in Real Madrid, that's the best thing you can do," Jonas Maciulis adds.

Considering the buyout numbers, we can't ignore the difference between the Real and lower budget teams. For instance, Real reportedly had around €40M budget the last season. The buyout of €3M for Garuba makes about 13.3% of their total budget. For example, the standard NBA buyout ($775k) for Rokas Jokubaitis would make around 10.7% of the total Zalgiris budget this year. 

Bigger money bigger costs.

Lose-lose situation

When BasketNews broke the news about the €3M buyout for Usman Garuba, many people around the basketball community complained about putting players into a slave environment. Sincerely, it's hard to find anybody happy with the current International basketball system.

NBA teams complain about the duty to pay the buyout for young prospects, who sit on the bench and don't get playing experience (not in Madrid's case), while they can draft NCAA players for free. Or that they have to overpay European players to help them cover their buyouts.

European teams complain that their investment into a young player, which includes risking the overall team result, providing the training conditions, and years of development, is worth more than the standard NBA buyout ($775k).

And it doesn't seem fair at all that players have to cover the buyouts from their pocket, like in Facu's situation, giving away his entire two-year salary from the NBA club.

But since there is no consensus yet, everybody fights for themselves. And in the wild west of International basketball, we have to respect the clear Kings of the buyouts.

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