Fixing the Guaranteed Contract Situation

Think buyout.
Think buyout.

How do we fix the guaranteed contract situation of the NBA and MLB?

Whereas the NFL has a hard salary cap in place that allows contracts to be terminated at a moment’s notice (like any other job in America), the other two major professional sports leagues have a tendency to overpay mediocre players for long periods of time, often handicapping franchises and angering fans.

There is a solution, beyond resorting to the NFL cap and non-guaranteed contracts, and it’s called commission. Yes, commission. A performance-based adjusting pay scale that is determined on a year-to-year basis. Here’s how it would work:

  • Contract negotiations would remain similar to how they are now. Players and agents would be working towards long-term deals, just like in the NFL, NBA, and MLB.
  • Unlike the NFL, the duration of contracts in the NBA and MLB would be GUARANTEED, meaning that if you signed Carlos Silva, for instance, for four years, you would be stuck with him for four years (unless you chose to cut him at a pre-determined rate).
  • A pay scale would be established based on certain benchmarks for a number of statistical categories, both offensive and defensive. This is where sabermetricians would come in and prove their worth.
  • After the completion of every season, players would have their performances evaluated and their contracts for the following year determined. This process would be based on the previously established performance pay scale that was created, in part, by sabermetricians. These annual negotiations would occur until the player’s contract expired and he became a free agent.
  • There would be a minimum salary of $40,000 per year, and an infinite maximum salary.
  • If financial terms for the following year could not be reached, the player and the team would have the mutual option of arbitration (which currently exists now).
  • If a team wanted to cut a player before the duration of his existing contract had passed, they could do so at the minimum annual rate of $40,000 for each remaining year on the player’s deal. So if the Mariners wanted to cut Carlos Silva right now, for example, they could do so at a rate of $80,000 (for the remaining two years on his deal), plus a pro-rated portion of the $40,000 that has already elapsed over part of this season. This, in essence, would be severance pay. The player would then become a free agent.

So how is this commission-based scale better than the non-guaranteed contracts of the NFL?

For one, it rewards players who do well on an annual basis, meaning they can up their pay every single year based on the past year’s performance. That’s a huge incentive to fringe players (think Willie Bloomquist-types) who are looking for a raise.

For another, it gives teams the freedom to rid themselves of cancerous players who have overstayed their welcome or simply lost the ability to produce at a significantly reduced rate.

Third, it still allows players to earn an infinite amount of money, and teams to dish out an infinite amount of money without having to worry about a hard salary cap like that of the NFL. Meaning the Yankees can still overpay free agents (for at least one year) if they so desire.

This scenario isn’t perfect, and probably isn’t likely to ever be implemented, but it’s an idea. And right now, with every team possessing at least one bad contract that irks the entire fan base, it’s progress that moves us in the right direction.

2 thoughts on “Fixing the Guaranteed Contract Situation”

  1. I have a better idea. Bring back the one-year contracts with the reserve clause.

    Lobby congress to strengthen baseball anti-trust exemption to allow this. If the MLBPA objects, just tell them “fine, one positive performance enhancing drug test and you are banned for life, Joe Jackson-style.” I think they’ll back down.

    Then you kill two birds with one stone: (1) eliminate free agency in baseball, and (2) make players actually perform for next year’s contract.

    We all know players perform the best in the last year of their contracts, but the danger is they’ll bolt to the highest bidder when the year is over. There is something wrong about this. Teams should expect the highest level of productivity from their players each year regardless of their contract situation. Unfortunately, this is not the case.

  2. HEY! Why don’t we tie game admissions to the win loss record of a team? The more a team wins the higher the ticket price per game, if the team loses more games than it wins the price of tickets goes lower….everyone wins. Run that one past the owners and front office, HA!

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