Are NBA contracts guaranteed? Get to know how NBA contracts work

The topic of NBA contracts has sparked curiosity and debates among fans, experts, and journalists, with some questioning the fairness of basketball teams when issuing deals. The league rules require every professional player to sign an agreement with their teams, but are NBA contracts guaranteed?

NBA contracts are binding agreements between players or coaches and teams. An NBA basketball team has a maximum of 15 players on its roster during the regular season, but their contract details differ. So, are all NBA contracts guaranteed? Sports Brief has a comprehensive guide on how NBA contracts work.

Are NBA contracts guaranteed?

National Basketball Association contracts vary. They can be fully, partially, or non-guaranteed. Every player, coach, or anyone involved in the basketball business should understand the metrics behind signing the papers.

How do contracts work in the NBA?

According to Fan Arch, NBA contracts are governed by the rules of the NBA's Collective Bargaining Agreement (CBA), negotiated between the league's owners and the players' union. There are several types of NBA contracts, which can be divided into two:

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NBA

Rookie scale

Dario AS explains that rookie contracts are standard four-year deals offered to first-round picks in the NBA Draft. They allow teams an option to keep the player in the third and fourth years. The rookie salary is set according to the overall salary cap.

The drafted stars earn a salary depending on their draft slot. First-round picks can sign for as much as 120% and as little as 80% of the rookie scale.

Veteran

Teams offer veteran contracts to players who have completed rookie-scale deals or have been in the league for a long time. These deals vary in length, structure, and security.

NBA contract guarantee structures

Basketball teams make different agreements with players after negotiating their terms before the players pen their agreement. Are NBA contracts guaranteed money? Not all deals assure athletes of getting all their money in their deals. According to NBA Blast, here are the three levels of guarantee structures, including how they work and examples.

Fully guaranteed

The deal means a player is entitled to receive the entire money stipulated in the contract, regardless of the circumstances. Such agreements provide players with stability and security and protect them against unforeseen events like injuries.

An example of a fully guaranteed NBA contract is LeBron James with the Los Angeles Lakers. ESPN reported in August 2022 that the basketball star penned a two-year deal worth $97.1 million, with an option to extend for the 2024-25 season.

The agreement means the LA Lakers will pay Le Bron James the entire amount during that period, regardless of whether he plays.

Non-guaranteed

The deal offers less financial security to players because it does not include any guaranteed salary. NBA teams can waive the agreement anytime without incurring further financial expenses on the athlete or paying the total agreed amount.

According to the Hispanos NBA, nearly every team has this contract on their roster for the 2023-24 season. They include:

Partially guaranteed

The deal assures players a portion of the agreed amount if they meet certain conditions. The agreement encourages players to maintain performance levels. Some partially guaranteed deals include a two-year contract where the first year is fully guaranteed, while only a part of the second year is assured.

In July 2022, Sports Illustrated reported that DJ Wilson penned a partially guaranteed deal with the Toronto Raptors from Oklahoma City Blue. They included a $250,000 guarantee upon his signing.

Factors influencing guarantee levels

Basketball players receive different contracts from their teams depending on several factors. We break down some of these reasons and how they influence the decision between player and club.

Player performance and value

Star players and those who contribute often get fully guaranteed deals because of their importance to the team's success.

Injury history

Injury-prone players get deals with lower assurances to prevent teams from incurring financial losses when they are injured.

Team's financial situation

A team's financial position and salary cap space can also influence players' contract levels. Teams with lower salary caps offer players lower assurances to ensure they stay within their financial limits.

Negotiating power

Players and their agents negotiate deals with teams, but the level of negotiation differs. Those with solid leverage in talks are more likely to secure better deals.

Trivia

Are NBA contracts guaranteed for injury? Injured players will earn their full salary if they sign a fully guaranteed contract. For partial ones, they may get some amount, while non-guaranteed deals get nothing. Here are more facts about basketball deals.

Are NBA rookie contracts guaranteed?

According to Yahoo Sports, a rookie-scale deal carries two guaranteed years with a team option for the third and fourth years. But are 2nd round NBA contracts guaranteed?

Unlike the first-round picks, a player drafted in the second round has no guaranteed contracts. Teams can sign them through cap space, an exception, or a two-way deal. Some compete for a roster spot during the NBA Summer League and training camp.

What percentage of NBA contracts are guaranteed?

HoopsHype listed the 2023-24 NBA teams' contracts, showing that most NBA players have fully guaranteed deals with their teams. Some have two-way contracts, while a few have partial and zero guarantees.

Are NBA two-way contracts guaranteed?

Two-way contracts are usually not guaranteed, meaning players can be laid off at any point. Teams issue the deal to developing players to be rostered on an NBA team and its G League affiliate. According to USA Today, only players with three or fewer years of NBA service are eligible for the two-way deal.

Are NBA coaches' contracts guaranteed?

Most coaching deals in the National Basketball Association are guaranteed, but some are partial and others not. Firing the fully guaranteed manager is expensive for the team because they must pay the remaining amount on the deal.

What is the minimum NBA salary?

Statista revealed that the minimum salary for players in the 2023-2024 NBA season is around $1.1 million. The value has increased since the 2017-18 season, when the minimum wage was around $815,600.

Who has the richest contract in the NBA?

Stephen Curry of the Golden State Warriors has the highest-paid contract in the 2023-23 NBA season. Basketball Reference indicated Curry's cap hit is $51.9 million, followed by Kevin Durant of the Phoenix Suns' $47.6 million.

Final word

Every young college basketball player dreams of getting a contract with the National Basketball Association, but are NBA contracts guaranteed? Some are fully guaranteed, while others are partial and non-guaranteed. Teams offer players different deals depending on factors like experience and injury history.

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