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Does the NBA Have Guaranteed Contracts?

Publish Date: 30.04.2024
Fact checked by: Emily Carter

The NBA is a hyper competitive league where only the best of the best thrive. It takes a lot of work to get there, but doing so comes with a big payoff. The NBA offers players plenty of big contracts, and almost all of them have some level of guaranteed pay.

Typically, the better or more successful a player is, the more money they get guaranteed. Managing such deals is a big part of a well-run organization. Owners need to sign big checks to bring in big players, but they don’t want to overpay for lackluster results.

It’s about achieving a balance, which comes from understanding the different types of contracts that can exist within a professional basketball franchise.

Understanding NBA Contracts

NBA contracts, as with deals from any big sports league, are pretty straightforward. A player signs with a team, and then gets a payment structure based on what they bring to that team. Better athletes get more money, while worse players get less.

All of that then figures into what is known as the salary cap. Teams only get so much money to spend each year, and they are able to only give you money that fits into that amount. That means the more they pay the top players, the less cash there is for other contracts.

Such numbers are part of the NBA’s Collective Bargaining Agreement, which is a deal set between the owners and the Players Association. They are in charge of all big moves, and that includes what contracts can and cannot pay.

Types of NBA Contracts

When looking at if the NBA does have guaranteed contracts, it’s important to note that all deals can be grouped into either rookie scale or veteran contracts. Each comes with its own specifications and reward scale depending on the team and individual situation.

Rookie scale contracts are what all players coming into the NBA sign. Such contracts are based on a predetermined scale based on draft position, with more money going to higher picks and less money going to lower ones.

All money is guaranteed on rookie scale contracts, but teams do have some wiggle room. They are able to sign first rounders for as little as 80 percent of the standard scale amount or as much as up to 120 percent of that number. It depends how much they’re willing to spend.

In contrast, veteran contracts refer to all deals signed by players who age out of their rookie scale contracts or who have been in the league a specific number of years. Once a player hits a certain number, they go up to veteran status.

Such deals can be for as low as the league minimum or as high as a supermax contract, which allows players who have been around for eight seasons to sign a five year deal that is 140 percent higher than their last contract.

Guarantee Structures

Once you get past the above two broad categories, NBA players do tend to have guaranteed contracts. However, how much they get guaranteed largely depends on the style of individual contract they want to sign.

The best contract for players is a fully guaranteed contract. As the name suggests, such deals allow players to get the full amount of the money no matter what happens or what circumstances (like injuries or trades) occur.

Beyond that, there are also partially guaranteed contracts and non-guaranteed contracts. Partially guaranteed contracts are the norm, giving players a base salary with the ability to earn more based on various criteria like stats, games won, or games played.

Non-guaranteed contracts mean that a team can cut a player without any obligation to pay the rest of the money on the deal. For example, if a player has already made $1 million of a $10 million deal but gets cut, they wouldn’t be entitled to the other $9 million.

It’s also important to note that non-guaranteed contracts are pretty rare and almost no teams have fully guaranteed contracts. NBA players do almost always get partially guaranteed contracts, as that’s how organizations prefer to dole out money to their players.

Factors Influencing Guarantee Levels

NBA contracts fall into various categories, but how much someone makes on an individual level typically comes down to personal negotiations between them and their team.

There are many external factors that impact how much a player might get paid. Higher profile athletes with a successful history will naturally get bigger deals. However, they also might get less if they have a long injury history or known off-court issues.

Older players typically don’t earn as much as players in their prime either. It comes down to what owners are willing to risk. If they think someone can perform, win games, and fill seats, they are likely to pay more on the backend during negotiations.

However, no matter what an owner might want, teams can only pay what they can afford. Some franchises are simply so tied to big name players that they cannot bring in anyone else, or they’ve spread their money out so much that free agents are off the table.

That’s why players are always seeking some type of leverage in negotiations. Big time names going to struggling teams typically command a lot of money. The same can be said for big players who threaten to leave a team if they don’t get a bigger deal.

While in the past organizations had all of the negotiation power, times have changed. Players aren’t afraid to speak out about demands and can use such demands to earn more money, get bigger deals, or simply change their playing situation.

Conclusion

An NBA contract is a big deal for any player, but basketball is also unpredictable. That’s why the more money an athlete can secure, the better off they will be. Guarantees are always the ultimate goal, regardless of how much they end up earning.

That’s why the Players Association and owners are always going back-and-forth over payouts, salary cap, and contract structure. While it’s unlikely for any big shifts to happen soon, as the NBA brings in more money, players tend to get bigger guaranteed deals and earn even more.

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