Guaranteed contracts a divisive issue between NBA owners and players

In 2006-07, it was Peja Stojakovic. Two years later, it was Malik Rose. In 2009-10, it was Etan Thomas.

The three of them, as members of the New Orleans/Oklahoma City Hornets and the Thunder, collectively took home more than $25 million during their respective single seasons in OKC. Despite that significant price tag, they appeared in just 56 of a possible 191 games.

In any other industry, it would equate to larceny. In the NBA, it's business as usual.

For years, guaranteed contracts have handicapped franchises and had owners hemorrhaging money. They've become a leading reason — flanked by the issues of contract lengths and the need for a “hard” salary cap — why the league is currently in the midst of a lockout.

Owners have sought to lessen their financial risks by removing fully guaranteed money from players' contracts. Players have stood firm in resisting any shift in their salary structure.

“Players want to have that guaranteed contract because you never know what will happen on any given day,” said Thunder forward Kevin Durant. “In this league, teams could easily just say ‘We don't want this guy on the team anymore.'

“I think the security of having that contract goes a long way because you're taking care of your family. You got a lot of things you're doing, and this is your way of living.”

In the final few negotiating sessions preceding the lockout, owners backed off their original insistence that contracts be unguaranteed. Owners instead proposed that contract lengths be reduced from five years to three for any player signing with a new team and from six years to four for a player re-signing with his current club. But with the two sides still being far apart while all business has shut down, it's not out of the question that non-guaranteed deals creep back into the conversation.

“We have not run from the reality that there are some teams that are in trouble and that there are some realities that have changed in the NBA in terms of economics,” said L.A. Lakers guard Derek Fisher, president of the players association.

“It should be a player and a team's right to negotiate how good or not they feel about guaranteeing (a) particular player a certain amount of income.”

Only in the National Football League do players perform without the security of fully guaranteed contracts. A player's signing bonus is all that is guaranteed. Major League Baseball and the National Hockey League both mirror the NBA when it comes to guaranteed contracts for players.

“It's something that we're not used to,” said Durant, who has assured the players will stick together and hold out until they receive the right deal. “So I think that's the biggest thing for us is having that security as a player, knowing that you're guaranteed and you're straight.”

NBA player salaries, however, have now topped more than $2 billion annually, and Stojakovic, Rose and Thomas during their days in Oklahoma City represent only a small sample of what's become a league-wide occurrence.

Last season alone, two of the top 10 highest paid players, Milwaukee's Michael Redd and Houston's Yao Ming, combined to earn roughly $36 million. They played a combined 15 games because of injuries. New York center Eddy Curry has made $32 million over the past three seasons. He's played in just 10 games. And seven-time All-Star Grant Hill, after signing a seven-year, $93 million contract with Orlando in 2000, famously missed 374 of a possible 574 games over the life of his guaranteed megadeal.

The league is littered with others who belong on the list.

It's one of the reasons why, in announcing the league's plans on Thursday to lockout the players, NBA Deputy Commissioner Adam Silver called the expired collective bargaining agreement “a broken system.”

“We will continue to make every effort to reach a new agreement that is fair and in the best interests of our teams, our players, our fans and our game,” Silver said.

NBA Commissioner David Stern has stated intentions of cutting player salaries by up to $800 million annually. As a means of doing so, owners have proposed to rollback players' salaries, reducing their income by more than 30 percent in any new collective bargaining agreement.

The players union, however, has maintained its stance that the onus of remedying poor decisions made by team owners and managers shouldn't fall on the players.

“Teams have been able to reduce player's salaries on their own through their own decision-making,” said Fisher.

“We've continued to offer ideas and solutions to address those areas without having them mandated and saying that's the only way it can be. All we're negotiating for and continue to negotiate for is the option to continue to have fully guaranteed contracts.”