Getting rid of/limiting guaranteed contracts

Very interesting article

Let's make a new deal: no guaranteed contracts

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By Frank Hughes
Special to ESPN.com


As the NBA and the Player's Association go into top secret -- even double secret -- negotiations this summer in an attempt to extend the collective bargaining agreement and avoid an ugly public labor dispute in the next few years, presumably one of the topics that will be on the table is an age limit, where the league does not want players to be able to join until they are at least 20 years old.

To me, this seems like an effort in futility. Since David Stern usually gets what David Stern wants, this appears to be a done deal -- especially since, as we saw with rookie contracts in the last agreement, what do players already in the league care about some nameless, faceless phantom 18-year-old kid they don't know and whether or not he gets in the league to possibly take their job?


The Magic shouldn't be forced to pay guaranteed money to an unhealthy Grant Hill, right.
But what also seems like a done deal is that at some point some nameless, faceless phantom 18-year-old kid who can't get into college and doesn't want to go overseas is going to realize there was some dude way back named Spencer Haywood who successfully sued the league and won the right to join the NBA as an underclassman. The kid is going to go to court on the grounds that he has the right to earn a living no matter how old he is -- and considering there are 18-year-old bricklayers, he's got a point and just might win.

What the NBA should be focusing on in its next negotiating session is the elimination of the guaranteed contract, the bane of the NBA.

At the very least, the league should be asking the union that guaranteed contracts be limited to a maximum of three seasons. Certainly, a contract can run longer than three seasons, but only the first three are guaranteed, which would give teams more flexibility to cover past mistakes and allow them to maneuver their rosters to make everybody better.

"I don't like that idea," Seattle SuperSonics guard Ray Allen said. "Teams have to take responsibility for the contracts they sign. They went out on a hunch and thought it would benefit them in the long run based on potential. That's always a bullet the team has to bite.

"General managers have to be smarter. They have to know what they are doing. In a sense you are almost saying it's the player's fault. If you are giving that kind of money away, you should know what you are doing as an organization. You should know whether a guy is worth it or not."

That may be true, but there are very few teams around the league who have not fallen victim to the curse of the guaranteed contract.

By my count, there are only five teams in the league that don't have a contract that seems absurd. The teams: The Los Angeles Lakers, in part because all their money is devoted to Shaquille O'Neal and Kobe Bryant; the Los Angeles Clippers, because they don't pay anybody anything; the Detroit Pistons, who have all their money evenly dispursed; the Chicago Bulls, who pay Jalen Rose $12 million and everybody else less than $6 million; and the Sacramento Kings, who I think is the best and deepest team in the league and has done a fantastic job of amassing talents that are worth their every cent (relatively speaking).

My list could be up for debate, of course, but by my count, there are 34 players who make a combined $307.8 million who, if they are not stealing money, certainly are not producing enough to justify the ludicrous contracts they have.

I know, I know, some of it is not the player's fault, but does it really seem fair that the Orlando Magic have to be strapped with Grant Hill's $93 million deal, including $12 million this season, when he has played only a handful of games for them since he joined the Magic?

From Jason Caffey ($5.2 million) to Alan Henderson ($7 million) to Vin Baker ($12.37 million) to Tom Gugliotta ($10.8 million) to the retired Hakeem Olajuwon ($5.6 million) to Alonzo Mourning ($20.6 million) to Brevin Knight ($5 million) to Calvin Booth ($4.9 million) to Terrell Brandon ($10.2 million) to Kelvin Cato ($6.7 million) to Danny Fortson ($5 million), the list goes on and on with players who are making money they clearly are not earning.

Allen's point about good GMing has some legitimacy to it, like the case with Booth. But can GMs know that Mourning is going to contract a kidney disease? That Gugliotta almost died and has never fully recovered? And yet, their teams are handcuffed for years by fate frowning upon them.

The NBA should do what the NFL does: If you produce, you get paid. If you don't produce, go find another line of work. That's how it happens in the real world.

Few people in others professions get paid on their potential, and they certainly don't get paid if they don't ever live up to that potential. And that is one of the reasons the NBA is faltering, why the league sometimes institutes rules changes to change the dynamics of the game. For every Kobe and Tracy McGrady who strive for excellence, there are two Kelvin Catos who are simply too happy to have their money and are not willing to not just improve, but to even work at their games.

"I don't think six- or seven-year contracts are good," Sonics coach Nate McMillan said. "It is too long of a commitment. Six or seven years is a long time to be guaranteed for the salaries that we give."

If there are no rules, egomaniacal owners hungry to win a championship and further feed their self-esteem can't help themselves but give huge contracts. Can you say $252 million, ARod?


Of course, there are those who will argue that teams are not forced to give players such long-term deals. But sports has a long, well-documented history of not being able to police itself. If there are no rules, egomaniacal owners hungry to win a championship and further feed their self-esteem can't help themselves but give huge contracts. Can you say $252 million, ARod?

"In a sense they are (forced to pay) because that is what is out there," McMillan said. "That is what is negotiating. Everybody is asking for the max. If you don't give it to them, there is someone who will, and you will end up losing players."

So at the very least, give three years guaranteed. That should be enough time for players to get financial security, as well as to establish themselves on their new teams. It is enough time for a player to show if he is deserving of another three-year guarantee, or only one year. And it is a small enough amount of time that if a team makes a mistake, it does not have to deal with that mistake into and sometimes past a new NBA cycle.

It would improve the quality of the game, because players would strive to get better, knowing they have to actually work for their next contract. And, in the one thing fans love to see, it would enhance player movement because there would not be so many restrictions about trade possibilities.

A cynic would say that every team would be suffering from what the Clippers are enduring this season, a bunch of young guys who care more about their statistics than they do about winning, which results in anarchy and bad play. As Allen told me, "This is an unfortunate business because stats are the bottom line. Winning is the biggest thing, but stats are the bottom line." But McMillan thinks that the Clippers' problems are a product of youth, that those players care more about what they can take into negotiating sessions than what the team does.

McMillan said that on the Sonics' 1995-96 team that went to the Finals against the Chicago Bulls, there were seven free agents on that team, including Gary Payton.

"It was the best season I think I played in," McMillan said. "You didn't have any problems, and everybody was doing what they were supposed to do. Fighting? They were playing."

Wouldn't it be nice if every team was like that every year?


I'm intrigued. I haven't thought it through clearly yet, but I like the idea of shorter guaranteed contracts. I wouldn't get rid of them entirely, but three years sounds like a reasonable time. No way I see players going for this though, unless it can be shown that the average non-max player or non-center will benefit.

 

Another problem will be retaining franchise players. You're going to have Webber and Duncan contract years twice as often, with twice the disruption, etc. But if the financial incentives remain the same, I guess teams will still retain the edge in keeping their stars.