Facilitation 7/30: Should sports contracts be guaranteed?

In the NFL, contracts are not guaranteed by owners -- a team can terminate a player's contract and avoid having to pay them. In MLB and the NBA, contracts are guaranteed, so when an athelete signs a $100 million contract, he will get paid that $100 million regardless.

Sports agents, such as Drew Rosenhaus (right), have encouraged NFL players to hold-out, or refuse to play, until they get a large amount of guaranteed money. Many NFL contracts are re-negotiated every year. NFL players often push for large signing bonuses, which they receive immediately, to counteract their lack of contract security.

In contrast, MLB and the NBA have dozens of ridiculously overpaid players that nobody wants. There have been many instances in which players have had career seasons in the last year of their contract, then return to mediocrity after signing a massive deal. This is especially true for high-demand positions such as NBA center and starting pitcher. Some examples: Erick Dampier, Adonal Foyle, Michael Olowokandi, Joel Przybilla, Darius Miles, Carl Pavano, Adrian Beltre, & Russ Ortiz -- but these guys are just the tip of the iceberg. A prime example of the failure of this system is Steve Francis (above), who received nearly $31 million in a buy-out of his 2-year, $34 million contract from the Trailblazers -- they prefered to pay him to leave than pay his salary. Francis recently signed a 2-year, $6 million contract with the Houston Rockets, consequently receiving both a $14 million pay cut and a $17 million raise for the same season . . .

Arguments for guaranteed contracts:

-- They add an element of commitment to the vicious world of sports, in which atheletes are often treated more like commodities than people.

-- Atheletes with guaranteed contracts can relax and play the game without fear of an injury that could end their career and threaten their livelihood.

-- There are many more contract disputes in the NFL compared to MLB and the NBA because of the inequity between the sports related to guaranteed contracts.

Arguments against guaranteed contracts:

-- It reflects the real world, in which a company can fire a person without continuing to pay them.

-- Many professionals risk injury to complete their job responsibilities, such as construction workers, crab fishermen, & military personnel.

-- Just because the NFL is the odd-sport out in this area doesn't make them wrong. If MLB and the NBA didn't guarantee contracts either, there would be far less contract disputes in the NFL than there are currently.