The False Allure Of Multi-Year Contracts

May 8th, 2014

[Originally posted on Hoopsworld, 15th October 2013.] Unguaranteed or partially guaranteed final seasons are quite the trend nowadays in the NBA, and they have these days almost completely superceded team options. In fact, excluding rookie scale contracts, there are only eight team options in the entire league, belonging to Chauncey Billups, Darius Morris, Timofey Mozgov, Marreese Speights, Carrick Felix, Chandler Parsons, Jae Crowder and Rodney Williams. All other contracts referred to in the press as ‘team options’ are, in fact, unguaranteed salaries. There are very few instances in which contracts must be guaranteed. In fact, there are only two; the first year of a signed-and-traded contract, and the first two years of a rookie scale contract (which must be guaranteed for a minimum of 80 percent of the scale amount). Nothing else has to be guaranteed. It is self evident why so many contracts are nonetheless fully guaranteed – players want that, and teams want players to want them. Yet the unguaranteed contract fad has its basis in logic. Essentially, unguaranteed contracts function much like team options do. However, there are some significant advantages to doing it in this way, which is why it happens. The differences: 1) Non-rookie scale team options have to be decided upon by the final day of the previous season. Seasons change over on July 1st, and thus team options must be decided on or before June 30th. This is not the case with unguaranteed contracts, which either have guarantee dates that can be negotiated to different dates, or which have no guarantee date at all. A lot of unguaranteed contracts have some guaranteed money, becoming fully guaranteed upon a certain date, or no guaranteed money at all becoming slowly guaranteed upon several dates; for players earning the minimum salary it is often the latter, […]