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NBA rosters go global, and contracts get complex

The San Antonio Spurs romped in this month's NBA Finals, highlighting not just their skills but also their national diversity: 10 foreign-born players, from places as far-ranging as Brazil, France, Argentina and Australia, started the season on the Spurs' roster, and many played an integral role in the June 15 victory.

Yet, global rosters also bring unique contract complexities, and the NBA may have more of both in its future.

Manu Ginobili and Tony Parker of the San Antonio Spurs.
Getty Images
Manu Ginobili and Tony Parker of the San Antonio Spurs.

The NBA tipped off the 2013-2014 season with a record 92 players born outside the U.S. on its rosters, and the Spurs boasted the most ever for an individual team. The league could see another influx at Thursday night's NBA Draft, where teams could select as many as 14 foreign-born players, said Jonathan Givony of DraftExpress.com.

Drafting a foreign-born player doesn't guarantee he'll play in the NBA, though. Bringing in those players—many of whom have signed contracts with other professional teams—can create a tricky financial process for draftees and teams.

"If a player has a very difficult contract, that will make it harder for him to come to the NBA," Givony said.

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In the case of the Spurs, foreign-born players, such as Australian point guard Patty Mills, played at an NCAA school in the United States. Those who didn't, such as point guard Tony Parker (from France), Argentine shooting guard Manu Ginobili and Brazilian center Tiago Splitter, often hold contracts with foreign professional teams before playing in the NBA.

Players paying for their own buyouts

Non-NBA pro teams "understand they're in some respects a farm league for the best players," leading those foreign teams to craft buyout agreements into players' contracts that must be paid before they can play on an NBA team, said Larry Coon, an expert in the NBA's collective bargaining agreement who runs NBA Salary Cap FAQ.

Additionally, the rules of Federation Internationale de Basketball (FIBA), the sport's international governing body, require players to obtain a clearance letter from the federation in the country where they're under contract. There are 214 national FIBA federations.

The NBA allows teams to pay an "excluded amount" of money toward a buyout without it counting against their salary caps. The limit increases each year and will reach $600,000 for the 2014-2015 season, Coon said.

Anything above $600,000 falls on individual players.

"Essentially, it comes out of their [NBA] contracts," Coon said.

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For example, the Chicago Bulls picked Nikola Mirotic, a center who plays for Spanish powerhouse Real Madrid, with the 23rd pick in the 2011 draft. Mirotic has yet to land in Chicago, but he would pay $2.9 million of his $3.5 million buyout if he debuted this season, Coon said.

The NBA's rookie pay scale limits salaries for first-round picks, offering little flexibility for players and teams, who often package buyouts into players' signing bonuses. If Mirotic had signed with the Bulls immediately, his first-year base salary would have topped out at only $1,003,800—versus his part of a buyout, which would be almost three times that amount.

Teams will often pass or trade down to the second round, where the scale doesn't apply, to open more flexibility in structuring contracts for players responsible for a buyout, he said.

Teams can avoid the rookie scale, though, if players wait more than three years to sign, which the Bulls may choose to do with Mirotic, Coon said.

Fears about buyouts or commitment largely won't affect teams' draft decisions on Thursday night, though. Blockbuster contracts outside the U.S. have largely disappeared in recent years, said Chris Denker, managing partner at NetScoutsBasketball. FIBA told CNBC that some pro players' salaries have taken a hit in recent years as a result of the euro zone crisis.

"In a lot of these places here, there's going to be little to no buyout," Denker said.

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Denker couldn't speak toward specific buyouts for this year's prospects, largely because teams negotiate them on a case-by-case basis. However, he noted that no buyouts this year will come close to Spanish phenom Ricky Rubio's, which was reportedly in the $6 million neighborhood when the Timberwolves drafted him in 2009.

Both Denker and Givony said potential first-round prospects who play in Europe, such as Croatian Dario Saric and Bosnian Jusuf Nurkic, aren't under large enough contracts to have issues striking a comfortable buyout deal. Australian prospect and potential top-10 pick Dante Exum won't be subject to a buyout agreement, as he never signed with a professional team.

Regardless, most teams will have done enough research to predict their draft picks' plans.

"I can't remember a case where a player wanted to get out of his contract and couldn't," Givony said.

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