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Do athletes get guaranteed contracts?

On Behalf of | Jul 26, 2022 | Sports & Entertainment Law

Whenever a star athlete gets a new contract, it usually makes the news. The contract will be listed as a set amount of money over a specific amount of years. For instance, an NFL quarterback may be paid one hundred million dollars over the next five years. 

But does that announcement actually mean that the quarterback is going to get $100,000,000? Are they guaranteed to get paid that money now that they’ve signed the contract? Or is it all smoke and mirrors? 

It depends on the league 

If you look at the four major sports of baseball, basketball, football and hockey, you’ll find that guaranteed contracts are actually the norm. The NBA, NHL, and MLB all provide guaranteed contracts in most cases. There are some exceptions in some leagues, like the NHL, for buyouts. But the money is generally guaranteed, and baseball is famous for giving guaranteed contracts for astronomical sums because of the lack of a salary cap. 

In the NFL, however, guaranteed contracts have never really taken off. One was recently given to Cleveland Browns quarterback DeShaun Watson, but it is perhaps the only example of a fully guaranteed contract being given to a star football player. It will be very interesting to see if this contract spurs change in the NFL on the whole. In the past, contracts were only guaranteed for a certain number of years, and then players could be cut with no penalty. 

As things change and the sports world gets more complex, athletes need to make sure they understand all of their rights and options