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Guaranteed Contracts in professional sports.

keetskeets Posts: 25,351 ✭✭✭✭✭

Professional athletes routinely sign "guaranteed contracts" which are pretty simple, they get paid no matter what happens to them such as injury. There's a thread on page one which relates to this concerning Dustin Pedroia who has been injured for a couple years now and is still paid due to contract stipulations. Every Team has them, some more than others and my hunch is that the better Teams probably have a higher percentage of their overall player salary devoted to Guaranteed money. This seems true with all professional sports.

Certainly Team Owners limit these types of contracts but in terms of real dollars they can add up and be substantial.

My questions are twofold: First, what kind of affect do you think this will have on each sport going forward as it inevitably costs ownership hundreds of millions of dollars with almost nothing coming in to balance the ledger?? Second, how do you think this will affect contract structure in the future as owners will most likely be loathe offer money that they might not be able to receive performance for??

Thanks for you input.

Al H.

Comments

  • perkdogperkdog Posts: 29,343 ✭✭✭✭✭
    edited April 23, 2020 6:08AM

    I don’t think it will change much other than wording protecting owners from another event out of human control. This pandemic is something we haven’t seen in over a hundred years, now if the potential is real that it could resurface then yea there could be clauses that would halt pay due to unforeseen events such as natural disasters or another pandemic forcing a play stoppage then I could absolutely see the language change in regards to a “Guaranteed” contract but outside of that clause I think these contracts will still be the norm

  • bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭

    i want this to destroy sports. I want tickets at 5 bucks and parking free . Reset your calendar to 1965 and do it like they did it then.
    And I don't want to ever see sports being analyzed on tv . No sports networks , no former athletes telling us who might get drafted or traded . Just shut up and I will watch the game and not spend another second on it.

    I'll post that damn AI video so help me. its about the GAME no more talkin bout practice

    If it takes a bloodbath s'be it .

  • keetskeets Posts: 25,351 ✭✭✭✭✭

    Reset your calendar to 1965 and do it like they did it then.

    I have no desire to attend a Cleveland Indians game in old Municipal Stadium, sorry. that aspect of it is greatly improved as far as MLB is concerned, they gave the Parks personality, improved the experience all the way around. aside from that I am in agreement with you because there is so much about sports that is tailored to money which prices a blue-collar guy like me out of the experience. the other three major sports, NFL, NBA, and NHL are all played in pretty sterile houses that can't be altered to improve the experience.about all any of them care about is how many fans can get jammed into seats.

    looking just at MLB, we passed out of the era where the Owners had absolute control over the players to the current era where players can earn their "freedom" after an initial 3-5 period of servitude at only making several hundred thousand - a couple million each year........................pity them!!!

    Professional Sports may never be the same, and that ain't really a bad thing, it's just a thing. wouldn't it be cool if this ended the life of ESPN and all the League driven channels?? bring back radio!! B)

  • hammer1hammer1 Posts: 3,874 ✭✭✭✭✭

    @bronco2078 said:
    i want this to destroy sports. I want tickets at 5 bucks and parking free . Reset your calendar to 1965 and do it like they did it then.
    And I don't want to ever see sports being analyzed on tv . No sports networks , no former athletes telling us who might get drafted or traded . Just shut up and I will watch the game and not spend another second on it.

    I'll post that damn AI video so help me. its about the GAME no more talkin bout practice

    If it takes a bloodbath s'be it .

    Darn right.

    Pro athletes should need a second job.

  • bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭

    @hammer1 said:

    @bronco2078 said:
    i want this to destroy sports. I want tickets at 5 bucks and parking free . Reset your calendar to 1965 and do it like they did it then.
    And I don't want to ever see sports being analyzed on tv . No sports networks , no former athletes telling us who might get drafted or traded . Just shut up and I will watch the game and not spend another second on it.

    I'll post that damn AI video so help me. its about the GAME no more talkin bout practice

    If it takes a bloodbath s'be it .

    Darn right.

    Pro athletes should need a second job.

    i don't mean that the players should be punished. I mean enough with the endless BS of 24 hour sports channels , if somebody is playing show it! then go away . I don't need 500 stephen A smiths babbling at me.

    Just games , no extras. No $600 seats just people in seats they buy at the gate, no ticketmaster no ace ticket buying up seats 7 months ahead and reselling them that real fans cant afford.

    When I was younger I attended 100's of bruins and redsox games , I walked up and paid cash and went in. Once these ticket services started buying up all the seats I never went again. I'm not paying $100 for a ticket that has $28 printed on it

  • JoeBanzaiJoeBanzai Posts: 11,171 ✭✭✭✭✭

    I think the owners often buy insurance against those guaranteed contracts, but I am not sure.

    2013,14 and 15 Certificate Award Winner Harmon Killebrew Master Set and Master Topps Set
  • JRR300JRR300 Posts: 1,346 ✭✭✭✭

    Okay, sounds like I'm in the minority here but I'm all for the players here. Let's face facts; pro sports has become BIG business, as owners have watched the values of their franchises go from millions to billions. The guaranteed contracts protect the players; the vast majority of them want to play. They even play when they are injured but able to lace em up and play. Do you really want to penalize them? Do any of you really think the owners would give these contracts if they didn't make up that money multiple times over? We talk about the guaranteed contracts of players making the larger sums, but what about the younger guys....those who come up to the majors, become starters in their first few years and are limited in earnings because they don't have enough time in. You see teams constantly manipulate the time when they call up younger players so they gain an extra year of salary control.

    Yes, I'd like to go back to the days when the Vet just opened and as a kid, I could get in to the upper levels for 50 cents or a dollar, but sadly those days are long long gone. The business end has taken over. So when you see owners shelling out 13 year guaranteed contracts for $300 to $400 mil, don't get mad with the players. The owners are paying that for their own self interest. IMO

  • keetskeets Posts: 25,351 ✭✭✭✭✭

    I think if you take a look at everything, player salaries, owners revenue, money made by vendors, money made by TV/cable enterprises, I think if you take a look at all of it and run the numbers you'd find one thing is clear --- the fans are screwed royally.

    the irony of it all is that without the fans there is no money for anyone else. sure, you could have games played in empty venues and only have it on TV: wait a minute, how's that working out now?? face it, without fans in attendance ALL major sports will die, and it won't be a fast, painless death. when/if any League ever goes that route it'll be embarrassing.

    go ahead, be for the players, be for the owners, I'll make a stand and be for the fans. the fans are the ones who end up paying for everything. is it too much to ask for something like what bronco posted, where an average person who decides this morning to go to a game tonight can actually get a ticket for a good seat at a reasonable price??

  • perkdogperkdog Posts: 29,343 ✭✭✭✭✭

    Ive long hoped for MLB to go bankrupt and these ridiculous salaries being null and void for lack of money.

  • bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭

    I'm for the players too , I see what the stadium pays for bottles of water and what it charges me or you and the math is very simple. Same for beer hot dogs and T shirts . The owners are making way more than they spend screw them and their cries of woe is me ,

    they are making ends meet but the scumbags probably have their hands out for corona bailouts from tax payers already.

    Sports is non essential shut it all down forever , who cares

  • JoeBanzaiJoeBanzai Posts: 11,171 ✭✭✭✭✭

    I am a players guy as well.

    Too bad the greedy new players won't fight for the guys that made it all possible. A lot of the retired players that weren't superstars are really suffering.

    Screw the owners, they have always sucked.

    2013,14 and 15 Certificate Award Winner Harmon Killebrew Master Set and Master Topps Set
  • doubledragondoubledragon Posts: 22,516 ✭✭✭✭✭

    It's always made me sick how much these athlete's make. Mike Trout is probably using a $100 bill right now as a napkin.

  • JRR300JRR300 Posts: 1,346 ✭✭✭✭

    @doubledragon said:
    It's always made me sick how much these athlete's make. Mike Trout is probably using a $100 bill right now as a napkin.

    That's not his fault. As the face of the Angels and one of the faces in the forefront of MLB, he deserves to be paid accordingly. One thing is certain, they wouldn't be paying him that kind of money if they weren't making that much ten times over. Just like in any job, you're only worth as much as someone is willing to pay.

  • doubledragondoubledragon Posts: 22,516 ✭✭✭✭✭

    @JRR300 said:

    @doubledragon said:
    It's always made me sick how much these athlete's make. Mike Trout is probably using a $100 bill right now as a napkin.

    That's not his fault. As the face of the Angels and one of the faces in the forefront of MLB, he deserves to be paid accordingly. One thing is certain, they wouldn't be paying him that kind of money if they weren't making that much ten times over. Just like in any job, you're only worth as much as someone is willing to pay.

    It just makes me sick how much these athletes make, while Police officers are out here risking their lives and making peanuts. To pay a guy $430 million to play baseball is ridiculous.

  • bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭

    @doubledragon said:

    @JRR300 said:

    @doubledragon said:
    It's always made me sick how much these athlete's make. Mike Trout is probably using a $100 bill right now as a napkin.

    That's not his fault. As the face of the Angels and one of the faces in the forefront of MLB, he deserves to be paid accordingly. One thing is certain, they wouldn't be paying him that kind of money if they weren't making that much ten times over. Just like in any job, you're only worth as much as someone is willing to pay.

    It just makes me sick how much these athletes make, while Police officers are out here risking their lives and making peanuts. To pay a guy $430 million to play baseball is ridiculous.

    baseball is the stupidest most dismal boring sport and also the least crippling so they actually should make the least

  • BLUEJAYWAYBLUEJAYWAY Posts: 7,938 ✭✭✭✭✭
    edited April 25, 2020 6:08PM

    @doubledragon said:
    It's always made me sick how much these athlete's make. Mike Trout is probably using a $100 bill right now as a napkin.

    Or in a pinch as some high grade TP.

    Successful transactions:Tookybandit. "Everyone is equal, some are more equal than others".
  • JRR300JRR300 Posts: 1,346 ✭✭✭✭

    Let me ask this then: do you begrudge them because they are athletes? How about TV or movie stars who get ridiculous amounts of money for a movie or tv series? Or the singers and musicians? They also are entertainers.
    You're correct in saying that it's just not right for police officers and firefighters who make so much less, but that is the reality of the world in which we live. If you want to pay them more, it comes directly at the expense of the taxpayers and nobody wants that.
    What you have to realize is that in today's world, these people are entertainers also. They make the money they do because the sports they play bring in enough revenues to support those wages.. It's nice to see that so many of today's athletes give back to their communities in so many ways, not only with their time but thru a variety of charitable foundations.

  • doubledragondoubledragon Posts: 22,516 ✭✭✭✭✭
    edited April 26, 2020 12:25PM

    It all comes down to this, reality stinks. The Angels can't even make the post season, a lot of good it's doing them. I'll never understand why guys like Trout get paid that kind of money to hit a baseball. Oh, and catch fly balls.

  • JRR300JRR300 Posts: 1,346 ✭✭✭✭

    At this point we must agree that we have seriously divergent points of view. This is our world; the people shelling out the dollars wouldn't do it if they weren't making money. It's a far different time than when athletes had to take regular jobs in the off season to support their families.

  • thisistheshowthisistheshow Posts: 9,386 ✭✭✭✭✭
    edited April 26, 2020 9:24PM

    This thread is hitting on some great points.

    Actors, athletes, entertainers, can get to the biggest stage and get paid exorbitantly. It was always like that, but for awhile now it has just been so out of whack.

    There was a time when the owners of a sports franchise had to really try to assemble the best team they could in order to be successful. But now, with huge TV contracts and everything split amongst the billionaires, there has been a change.

  • fiveninerfiveniner Posts: 4,109 ✭✭✭

    There are some greedy sobs out there . There is one in particular with Tampa Bay Rays Blake Snell says he will not play for any amount of a reduced contract if the season should be shortened. The overpaid crybaby has hardly had his feet wet. Many people in our country ,just regular Joes that have given to the current cause.
    I say if a player plays at least 10 years a short term contract could be considered.
    The rest get paid year to year.

    Tony(AN ANGEL WATCHES OVER ME)
  • JoeBanzaiJoeBanzai Posts: 11,171 ✭✭✭✭✭

    At least in sports the best players usually get the best contracts.

    2013,14 and 15 Certificate Award Winner Harmon Killebrew Master Set and Master Topps Set
  • SanctionIISanctionII Posts: 11,660 ✭✭✭✭✭

    Income in any area of human endeavor in the private sector depends upon supply and demand (well in an ideal world it would and should; but we do not live in an ideal world).

    Low supply and demand that exceeds what the available supply can provide results in higher income. Low demand and an over supply brings the opposite.

    Guaranteed contracts (in any field) present benefits and risks to both sides of the contract. In sports a player with a guaranteed contract is assured of getting paid, regardless of whether he or she performs (i.e no season due to Covid 19) and regardless of whether his or her performance is lousy or is MVP quality. Some players perform at an MVP level and get paid peanuts under a long term guaranteed contract. Some players get MVP money under a long term guaranteed contract and play horrible.

    Some guaranteed contracts arise within the context of "we are rewarding you for your past service", some arise within the context of "we are rewarding you for your expected future performance" and some arise within the context of both. Future performance is never a certainty and thus long term contracts are inherently risky for one or both parties to same.

    The funny thing about sports contracts and other personal service contracts is that if one party is not happy about the contract that party can always seek to change the status quo by:

    1. breaching the contract (not playing at all, not playing at the level one is capable of, etc.);

    2. demanding the contract be renegotiated; or

    3. demanding a trade.

    Another interesting legal aspect of personal service contracts is that they are one where the benefits of the contract that the individual performing the services is entitled to can be delegated, assigned or transferred by that person to someone else; however the obligations of the individual performing the services cannot be delegated, assigned or transferred to someone else. This makes sense on so many levels. It is simply inappropriate for someone like Tom Brady or LeBron James to be legally able to delegate, assign or transfer their contractual obligation to play an NFL or an NBA game or season to someone else.

    Could you imagine LeBron James doing so and having a 5'2" 35 year old, 220 pound couch potato whose only experience with dunking is Oreo cookies dunked in a glass of milk suiting up for an NBA game in the place of The King?

  • TabeTabe Posts: 5,920 ✭✭✭✭✭

    @fiveniner said:
    There are some greedy sobs out there . There is one in particular with Tampa Bay Rays Blake Snell says he will not play for any amount of a reduced contract if the season should be shortened.

    That's not what he said. At all.

    What he said was he wouldn't play for a reduced per-game rate. He's OK with half a salary if they play half a season. He's not OK with getting 10 or 25% salary for half a season.

  • fiveninerfiveniner Posts: 4,109 ✭✭✭
    edited May 17, 2020 8:16AM

    @Tabe said:

    @fiveniner said:
    There are some greedy sobs out there . There is one in particular with Tampa Bay Rays Blake Snell says he will not play for any amount of a reduced contract if the season should be shortened.

    That's not what he said. At all.

    What he said was he wouldn't play for a reduced per-game rate. He's OK with half a salary if they play half a season. He's not OK with getting 10 or 25% salary for half a season.

    Sorry I misread or misheard.

    Tony(AN ANGEL WATCHES OVER ME)
  • bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭

    @Tabe said:
    @fiveniner said:
    There are some greedy sobs out there . There is one in particular with Tampa Bay Rays Blake Snell says he will not play for any amount of a reduced contract if the season should be shortened.

    That's not what he said. At all.

    What he said was he wouldn't play for a reduced per-game rate. He's OK with half a salary if they play half a season. He's not OK with getting 10 or 25% salary for half a season.

    He is dumb as a sack of doorknobs . You don't have a clue what he said and no one else does. He is a moron.

    Idiots like him are the death of baseball.

  • bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭

    The moron said

    “No, I’m not splitting no revenue. I want all mine. Bro, y’all got to understand too, because y’all are going to be like ‘bro, Blake, play for the love of the game, man! What’s wrong with you bro? Money should not be a thing!’ 
    
    Bro, I’m risking my life. What do you mean it should not be a thing? It 100 percent should be a thing.”
    

    Which is even stupider than David price saying he will take as long as he wants between pitches .

    We don't need baseball so fine don't ever come back and lets see you earn millions of dollars doing something else you are really good at, which is actually nothing .

  • TabeTabe Posts: 5,920 ✭✭✭✭✭
    edited May 18, 2020 4:47PM

    @bronco2078 said:

    He is dumb as a sack of doorknobs . You don't have a clue what he said and no one else does. He is a moron.

    Idiots like him are the death of baseball.

    I don't have a clue what he said? I can read quotes and listen to interviews.

    He's 100% right. He agreed to a prorated contract AS DID THE OWNERS. Why should he give them a second pay cut while also risking his health?

  • bronco2078bronco2078 Posts: 9,964 ✭✭✭✭✭

    @Tabe said:

    @bronco2078 said:

    He is dumb as a sack of doorknobs . You don't have a clue what he said and no one else does. He is a moron.

    Idiots like him are the death of baseball.

    I don't have a clue what he said? I can read quotes and listen to interviews.

    He's 100% right. He agreed to a prorated contract AS DID THE OWNERS. Why should he give them a second pay cut while also risking his health?

    he may have the covid , isn't pig latin one of the symptoms?

  • fiveninerfiveniner Posts: 4,109 ✭✭✭

    I guess I very well misunderstood Blake Snells comment.of course I heard this from another party.

    Tony(AN ANGEL WATCHES OVER ME)
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