When LeBron James signed his 2 year contract earlier this month, I didn’t understand why it was considered a 2 year deal even though the second season is a player option. In each sport, contracts are reported and described in different terms. For anyone who is confused about how contracts are measured by sport, I have it all spelled out below, for baseball, basketball, and football, with examples for each sport.
MLB – All money is guaranteed and option years are added onto a contract”s description. For example, Nick Swisher signed for four years and $56 million with the Indians in 2012. The contract also has a vesting option for a fifth year at $14 million. This could bring the deal to five years and $70 million. In this sense, baseball is the simplest of the three major sports because the guaranteed money is spelled out in contract interpretation, separate from the option years. There is little confusion in describing baseball contracts.
NBA – In the NBA, contracts can be fully, partially guaranteed, or non-guaranteed, with all possible money and option years included in the description. LeBron signed for two years and $42.2 million, though the second year is a player option. Next season, he will make $21,573,398. For partially guaranteed and non-guaranteed deals, there are dates written in each contract that a team can cut the player without paying the balance. For NBA contracts, read the details. There is little confusion leftover upon reading the specifics of a signing.
NFL – Not all money is guaranteed upon signing, option years are separated from the rest of the contract, and both guaranteed and possible figures are reported upon signing. Signing bonuses are also factored into both figures. For example, when Johnny Manziel signed with the Browns, Nate Ulrich of the Akron Beacon Journal tweeted this:
Per @spotrac, Johnny Manziel’s deal: 4 yrs., $8.25 mil., including $4,318,000 signing bonus, $6,702,625 guaranteed. Team option for 5th yr.
— Nate Ulrich (@NateUlrichABJ) June 17, 2014
If that’s not confusing enough, read this explanation of Joe Haden‘s extension from May. There is so much fine print and cap magic done in the NFL that even I choose not to read into all of the details in every contract. Compared to “The Shield,” Jerry West and Harmon Killebrew have contract setups that are much simpler. Yes, I am only scratching the surface, but this is a general primer and not an all-encompassing guide. If you have any other questions about contract specifics in any of the three major sports, let me know in the comments.