Are NBA Contracts Guaranteed?

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Zion Williamson

Put the Mountain Dew down Zion!

Every off-season in the NFL, we hear about eye-popping totals for deals, only to later see the guaranteed amount is much smaller. This might leave you wondering: are NBA contracts guaranteed?

The short answer is yes, with some exceptions. When you see that an NBA player is signing for some amount of money, you can usually safely assume they’re gonna collect that total (minus taxes, agent fees, and baby mama alimony).

When NBA Contracts Aren’t Guaranteed: Exhibit 2

Despite the description I just gave, the Collective Bargaining Agreement (CBA) actually gives teams and players a surprising amount of flexibility. It specifies that they can agree to add a clause called Exhibit 2 to contracts. This clause allows them to negotiate limiting the guarantees of the contract based on:

Each of those terms isn’t explicitly defined like you might imagine—beyond those broad categories, it’s all up to what the team and player agree to. It’s worth noting: the CBA doesn’t automatically apply Exhibit 2. Teams and players must mutually agree to add these protections in the contract language.

Zion Williamson’s Contract’s Injury Protections

One of the most notable examples of a player with partial guarantees is Zion Williamson’s rookie extension—a five-year,$197.2 million deal signed in July 2022 after playing only 114 games in his first three seasons. The last three years of his contract became non-guaranteed when he missed more than 22 games in 2022-2023.

That doesn’t mean Zion is completely out of his money, though. He has opportunities to earn back the money each year. He gets weighed seven times a season and needs to have a combined weight and body fat percentage of 295 (gotta love whoever came up with that). He earns 20% of his guarantee for meeting that benchmark, 40% for playing in 41 games, and an additional 10% each for playing in 51 and 61 games. He even gets a 10% bonus for not getting caught eating candy in the locker room like Johnny Sacks’s wife (okay, I made that one up!).

Unfortunately for New Orleans, this doesn’t reduce how much they have to pay him if he’s on the roster—just how much they have to pay him no matter what. If Zion only reaches 40% of the benchmarks but is on the roster, he’ll get all the money (that’s a lot of gumbo!). They would need to waive him to actually save any money.

Performance Bonuses

While Exhibit 2 covers specific scenarios, the CBA also allows performance bonuses, which work differently but can similarly affect how much players actually earn. Performance bonuses can only be tied to official NBA stats (being on NBA.com is literally the definition), must be positive (no turnover records), and must be based on absolute numbers—like shooting 80% from the free-throw line, not shooting 5% better than last year. Bonuses can also be tied to earning league honors (MVP, All-NBA, etc.).

Performance bonuses are broken down into likely and unlikely. A bonus is considered likely if a player would have met the conditions in the prior season and thus counts immediately against the cap. An unlikely bonus, on the other hand, doesn’t count against the cap unless the player actually hits the threshold.

One recent example of performance incentives is how the Brooklyn Nets incorporated $1 million in bonuses into Kyrie Irving’s 2019 contract, with bonuses for things like games played, turnovers, fouls, and free-throw percentage among other things. Even before the days of the second apron, this extra million made a big difference when the Nets were trying to sign Irving and DeAndre Jordan as well as pull off a sign-and-trade for Kevin Durant in the same summer.

Will NBA Contracts Ever Become Like NFL Contracts?

So, could we ever see NBA contracts become like NFL deals with massive differences between guaranteed and total money? Probably not. While the CBA gives teams some ways to limit guarantees and add bonuses, NBA players face much less injury risk than NFL players, and each NBA player has much more bargaining power. Plus, fully guaranteed deals have been the norm in the NBA for decades—something both players and agents aren’t likely to give up without a fight. But if you ever hear about partial guarantees in an NBA deal, now you’ll know exactly how it works!

Let’s keep exploring the CBA and the fascinating world of NBA contracts together.