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Guaranteed contracts are common in a number of pro leagues, including the National Basketball Association (NBA), the National Hockey League (NHL), and Major League Baseball (MLB).
And while you’ll find these types of agreements in the NFL as well, it’s clear that not all guaranteed contracts are made equal.
In fact, guaranteed contracts for NFL players may not be “guaranteed” after all.
Just ask Dee Ford, a defensive end selected in the first round of the 2014 NFL Draft by the Kansas City Chiefs.
After five seasons with the Chiefs, Ford was acquired by the San Francisco 49ers in 2019. He signed an $85.5 million contract with his new team, with over $33 million guaranteed.
But in 2022, just three years into his five-year contract, the 49ers released him. By that time, he no longer had any guaranteed money left on his contract.
So was his NFL contract actually guaranteed? It depends on what you consider a guaranteed contract to be.
What are guaranteed contracts?
Guaranteed contracts ensure that a player will remain with a team and receive an agreed-upon amount of pay.
Typically, there are exceptions written in to the contract that would exempt the team from paying out the guaranteed money. For example, a player might be released from their contract for violating team rules.
In the NFL, however, guaranteed contracts often include a number of other circumstances under which a player might be released, including an injury that prevents them from playing.
That’s what happened with Dee Ford. Though his contract was “guaranteed,” he was plagued by injuries and back problems during his time with the 49ers. Over three seasons, he played in just 18 games.
Due to his injuries, the team decided to cut him loose — which they were permitted to do thanks to a stipulation in the so-called “guaranteed” contract.
As a result, the team also created more cap room to bring on other players.
Fully guaranteed contracts
In the NFL, player contracts like Ford’s are fairly common.
However, there is an option that gives players more assurance that they’ll be able to hold on to their spot on the roster.
Fully guaranteed contracts include fewer scenarios in which teams are permitted to release a player without paying out their full salary.
A fully guaranteed contract typically includes the following stipulations:
- Guarantee for skill: The player is still entitled to their full salary even if their skills have declined to the point that they are released from the roster.
- Guarantee for injury: The player is still entitled to their full salary even if they are released from the team due to an injury.
- Guaranteed for salary cap: The player is still entitled to their full salary even if the player is released because the team needs more salary cap space to secure contracts with other athletes.
In the NFL, fully guaranteed contracts aren’t the norm. In fact, Deshaun Watson made headlines in 2022 when he signed a five-year, $230 million fully guaranteed contract with the Cleveland Browns.
Watson’s contract may prove to bring about changes for the league. In 2022, the NFL Players Association (NFLPA) filed a grievance alleging that NFL teams are colluding with the league to avoid offering fully guaranteed contracts.
Some standout players in the NFL are able to secure extra guarantees in their contract without their agreement being considered “fully” guaranteed.
For example, quarterback Patrick Mahomes signed a 10-year, $503 million contract extension with the Kansas City Chiefs in 2020.
In that contract, $140 million is fully guaranteed for injury, and other guarantees accrue over the period of his contract.
This essentially makes it less feasible for the Chiefs to terminate Mahomes’ contract unless it’s very close to the end of his 10-year contract.
The future of NFL contracts
Will NFL players be able to secure more fully guaranteed contracts following the example of Deshaun Watson?
It’s possible. The latest collective bargaining agreement approved by NFL players included some key changes for the league’s financial requirements.
NFL teams have to follow a “fully funded rule,” which meant that any guaranteed money in player contracts must be held in escrow, minus a $2 million deductible.
For example, quarterback Kirk Cousins’ used the advantage of free agency and the franchise tag to strike a contract with the Minnesota Vikings in 2018 for $84 million fully guaranteed, which means the team had to maintain $82 million in escrow.
The new agreement changes that deductible to $15 million through 2028, and $17 million in 2029 and 2030. This frees up more money that could be guaranteed in contracts.
Guaranteed contracts in other pro sports leagues
While NFL players are struggling to strike fully guaranteed deals, these types of contracts are fairly common in other pro leagues, including the NBA, MLB, and NHL.
As in the NFL, guaranteed contracts in these leagues aren’t part of the collective bargaining agreement set in arbitration.
However, the NBA, MLB, and NHL have utilized fully guaranteed contracts for decades following precedents set by previous players.
NBA guaranteed contracts
Who was the first NBA player to have a fully guaranteed contract?
Larry Bird secured a fully guaranteed contract with the Celtics in 1983, opting for a stronger guarantee over a signing bonus or incentive bonus.
Are all NBA contracts fully guaranteed?
All NBA contracts are fully guaranteed as soon as they’re signed.
MLB guaranteed contracts
Who was the first MLB player to have a fully guaranteed contract?
In 1974, Catfish Hunter signed a five-year, $3.75 million fully guaranteed contract with the New York Yankees.
Are all MLB contracts fully guaranteed?
All MLB contracts are fully guaranteed as soon as they’re signed.
NHL guaranteed contracts
Who was the first NHL player to have a fully guaranteed contract?
One of the first fully guaranteed contracts in the NHL belonged to Derek Sanderson, who moved from the Boston Bruins to the Philadelphia Blazers on a five-year, $2.6 million contract in 1972.
Are all NHL contracts fully guaranteed?
All NHL contracts are fully guaranteed as soon as they’re signed.