Canzano and Others Are Wrong About the Guaranteed Contract

There is a myth out there amongst sports fans, perpetuated by ill informed media types that guaranteed contracts are ruining the NBA. This year’s playoffs are showing us all that despite the guaranteed contract, the NBA is alive and well. The premise of those that argue against the guaranteed contract is that once players receive their guaranteed contract, they lose incentive to improve and continue to play at a high level. Basically if a player knows that he is always playing for a contract, he will always play at the his highest possible level, because he knows that any slip in play could lead to a reduction in salary, or even worse not getting re-signed.

The comparison most people use is the NFL, where it is assumed that the league’s high level of play is due to the fact that their players play under non-guaranteed contracts, and thus have incentive to play as hard as they can. Yet these supporters of the NFL’s system of non-guaranteed contracts are the same ones that complain when NFL players hold out for more money. You see, NFL players hold out because they know that by honoring contracts that don’t pay them huge salary bonuses (guaranteed money), they are taking a chance that they will get injured and not have their contract honored by their team. This causes a situation where contracts in the NFL don’t mean anything. You have teams that can cut a player anytime they want, and because of this, the best players are always looking to hold out for a new contract with up front salary bonuses.

The thing that irks me the most is the fact that the media knocks players who do this. NFL teams don’t honor contracts and can cut players that have given up their bodies in the most dangerous sport in the world, yet players are knocked for playing the same game. Players are criticized by fans for not being loyal to the team and putting the goals of a team ahead of their own financial goals. These critics never knock a team for cutting a guy that has been the heart and soul of a team for his entire career, but then is cut because he got slower or because he had a freak injury. Take Terrell Owens for instance. I know the way he conducted himself last season was wrong, but let me give you a players perspective. I know you guys remember how Terrell was hurt before the playoffs during the 2004 season. Don’t tell me that if Terrell never would have healed completely from that injury that the Eagles would have hesitated to cut Terrell. That is the world of the NFL, and in my opinion it is wrong.

The NBA probably has the best salary structure of any league in the world. They have a free market salary system, with free agency, and maximum and minimum salary thresholds for individual players and for individual teams. The only problem with the system is that there’s a mid level exception and a Larry Bird exception (which allows teams to go over the cap and thus bloat salaries). Yet the system has failed not because of the lack of effort that players put in after they sign their guaranteed deals, but because of the lack of fiscal responsibility from teams around the league. Why is it that every team in the league is willing to pay a Tyson Chandler or a Sam Dalembert a maximum salary? Is that the fault of the players, or the fault of the General Manager, who sets the market by overpaying for certain guys? People forget that this is a business, and that players only have a short time to make as much money as they can, so if a GM is dumb enough to offer them a max contract when they really don’t deserve it are they supposed to say: “Nah, I’ll pass on your money, Mr. GM”? And and even better question would be would you turn down guaranteed money if you knew that a GM was willing to pay you a max contract? I didn’t think so.

Fans and media types forget to point out that just because a player is a free agent doesn’t mean that you have to sign him to a long term deal. A smart GM would probably pay a player more money but for a shorter term. But not these NBA GMs. They are two busy giving second and third tier players such as Joe Johnson 6 year, $70 million contracts. So as they say, don’t hate the player, hate the game.

Instead of ragging on players for not meeting expectations, why not rag on the GM. Did any of you think Tyson Chandler was worth his long term deal when he signed it? Why did Jalen Rose receive a max deal? Tim Thomas? Brian Grant? Keith Van Horn? Larry Hughes? To me max means you are the best, yet GMs are so fiscally irresponsible that they will overpay in order to steal a player from another team or in order to prevent players from leaving their team to sign with a higher bidder.

People always criticize the Clipper organization for not paying players over the years. But as Donald Sterling has professed, what players did they have that deserved to be paid that they were asking? The first player they ever got their hands on that was worth big time money was Elton Brand, and they signed him. With Brand they also played the restricted free agency game correctly by letting their competing team set the market and then matching the offer. The Clippers don’t sign players to extensions before their free agency, and because of it the Clippers don’t really have any “bad” contracts.

The Golden State Warriors are the complete opposite of the Clippers. Seemingly, they’ve signed a ton of unworthy players to maximum type long term deals prior to their actual free agency. They’ve allowed agents such as Dan Fegan and Arn Tellem to punk them into signing extensions with players such as Troy Murphy, Jason Richardson, and Mike Dunleavy Jr. I don’t understand it. Don’t teams understand that they have the right to match any offer made by a team on one of their restricted free agents? Considering this, why would any team that has a player with impending restricted free agency sign that said player before their free agency kicks in? If the players thinks that they deserve a larger contract, let them go out on the free market and find someone that will pay them the money they want. If you think the player is worth that money, you can always match the deal. Lastly, you don’t have to give this player a six year deal, just because that is the max. If you are worried about a player falling off, just pay that player a lot of money for a shorter time. And if you know he is not worth more than that, don't pay him, even if another team is willing to. Seems simple enough, right?

And before NBA fans jump on players that are overpaid, think of this. There’s a player by the Name of Anthony Carter who signed a deal with the Miami Heat that could have been termed a bad contract. During the summer of 2003, Carter had a players option to continue his contract with the Miami Heat. Being that this option paid him more than he could have possibly gotten on the free market, Carter would have been a fool not to have taken the option. The only problem is that his glorious agents over at Bill Duffy and Associates were so busy chasing Carmelo Anthony that they allowed Carter’s option to expire thus making him a free agent and costing him MILLIONS. The Heat knew that Carter intended to pick up his option and re-sign with them, yet when his agents dropped the ball, they didn’t make a friendly phone call to Carter or his representatives to remind them of the option. Instead they jumped at the unexpected cap space and signed Lamar Odom. This signing is what allowed them to be in position to make a trade for Shaquille O’neal the following summer. So instead of always knocking the players for their integrity, be sure that you are being balanced and fair and take a look at the ineptitude and the lack of integrity on the part of some of these teams and their general managers.

And if you haven’t noticed, the NBA is doing better than ever, despite the guaranteed contract. None of the players I have witnessed in this year's playoffs look like they are loafing because they are guaranteed to be paid. People forget that these guys are competitors, and most of them truly want to win. Sure there are a few bad apples out there. But I'm sure that many of you probably work with a few of those at your own job. And I don't think you want your salary to drop because of the work ethic of some of your colleagues. Just a thought...

Here are some articles on the net that address this issue:

Frank Hughes-ESPN

Sam Smith

Milwaukee.com

USA Today

Canzano