There IS a difference between “team option” and “unguaranteed”, and it DOES matter

July 3rd, 2013

Several years ago, I wrote a piece called Creative Financing in the NBA, that sought to address and highlight a few quirky salaries and salaries mechanisms handed about that season. In that piece, I also spent a long time addressing the difference between team options and unguaranteed salaries. Often times, unguaranteed salaries are reported in the mainstream press as being team options, even though the two mechanisms are different. And often times, this is fine, because the differences don’t really matter. Not to the casual fan, at least. Nevertheless, differences do exist. Some of the initial post is quoted below that explains these differences: Unguaranteed or partially guaranteed final seasons are becoming quite the trend in the NBA, and they are quickly replacing team options. In fact, there are only 11 team options in the entire league […] 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% of the scale amount). Nothing else has to be guaranteed, but it is self-evident that almost all are. Would you accept an unguaranteed contract as a player? Not without incentive to do so, no. It is self evident why so many contracts are fully guaranteed. Yet the unguaranteed contract fad has its basis in logic. In a lot of cases, 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) 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 upon by June […]