Are MLB Contracts Guaranteed? (Everything Explained)

Whether you are an MLB fan or want to join the organization, certain questions induce curiosity in one’s mind.

One of these questions is, “Are MLB contracts guaranteed?”

The importance of a guaranteed contract is underrated.

However, people have different opinions on the subject. Several sports organizations avoid confirming guaranteed contracts with their players and employees.

Other organizations, like MLB, have a different perspective. MLB offers a guaranteed contract with every player and has firm principles regarding it.

If you wish to learn more about MLB contracts, what they hold, how much salary they offer, and answers to other relevant questions, you will find everything right here!

And if you don’t know what an MLB contract is, I will talk about that too. Go grab your popcorn, and let’s get started!

Are MLB Contracts Guaranteed?

Signing a contract.

All players of Major League Baseball enter a guaranteed contract when they become a part of the organization.

Whether they join via an extension or a free agency, the rule remains constant for every player.

Players cut from the 17th and Spring Training’s final days are usually compensated and paid for the 45 days.

MLB is so popular among players and investment bodies because it guarantees its contracts almost all the time, except under extraordinary circumstances.

Apart from the team options and performance bonuses, any Major League Baseball player gets 100% of their promised money when they sign a contract.

But as impressive as that sounds, there are certain drawbacks to these contracts as well.

For you to understand that in a better way, let’s talk about what these contracts are, what a guaranteed contract means, and how it is good or bad for any player.

Definition Of A Guaranteed Contract In MLB

People who ask, “Are MLB contracts guaranteed?” probably know well what a guaranteed contract is.

However, for those who don’t have a clear idea of this concept, let me give you some clarification.

A guaranteed contract means that any money promised to the player or the individual who signed it would get paid the whole amount under all the conditions mentioned in the contract.

Compared to all other universal sports, MLB contracts are usually 100% guaranteed.

It means that unless an extraordinary situation comes up, the signer will receive the total amount mentioned in the contract.

Why Are MLB Contracts Guaranteed?

Why Major League Baseball contracts are guaranteed in the first place does not have a definite answer.

However, there are several reasons why organizations tend to opt for it:

The three most important reasons why all Major League Baseball contracts are guaranteed include the Association’s strength, the season’s length, and, last but not least, the lack of salary caps.

And even though these reasons are individually not that valid, together, they make a reason powerful enough to advocate for a guaranteed contract.

The season’s length secures a lot of money for individual MLB players.

Every team is supposed to play over 80 additional games every year compared to their NHL and NBA counterparts.

They also play 146 games more than every team in the NFL. This way, they have more revenue to collect since they play more games.

Furthermore, in organizations like the NBA and NFL, only certain parts of a contract are guaranteed. This leads to a lack of salary caps, which plays a vital role in why MLB contracts are guaranteed.

Non-Guaranteed Contracts In The MLB

For reference, a non-guaranteed contract is one that can be terminated prior to the player’s first day on the field.

Non-guaranteed contracts also pay minimal salaries to the particular player in specific scenarios, as mentioned in said contract.

As I said, there are certain circumstances where money is not guaranteed in a contract.

These contracts are referred to as the non-guaranteed ones, and such circumstances include voluntary retirement and suspension.

Option years and contract opt-outs also so are a form of non-guaranteed money since they can end contracts early or extend them.

Also, players on arbitration, split contracts, or Minor League do not have guaranteed salaries.

Why Are MLB Contracts So Long?

So, “Are MLB contracts guaranteed?” Yes. But why are they so long?

The answer to this is quite simple: longer contracts help MLB withhold their good players for a longer period.

More extended contracts work best for both the organization and the players:

While it helps MLB keep a firm hold on their favorite players for an extended period, it pays more to the players.

Hence, it’s a win-win situation!

Fun fact:

The longest MLB contract in the organization’s history was a 14-year contract with Fernando Tatis Jr., the player signed a contract of a whopping 340 million dollars!

Average Length Of A Rookie MLB Contract

Rookie contracts last around six years in Major League Baseball.

During this time, the team and organization decide whether the player is competitive enough and what salary he should receive.

Once the rookie contract is over, the player is eligible for any free agency as the season ends.

This fact is valid unless the player has already agreed to and signed an extension of the contract that would cover another year of their free-agent seasons.

In case you are curious, rookie salaries can range from $700,000 to $925,000.

This salary depends on many features, including the competitiveness and skills of the player as well as what the team decides.

Can MLB Terminate A Contract?

MLB can terminate the contract under particular circumstances.

For example, if the player neglects, refuses, or fails to follow the contract’s personal conduct and sportsmanship rules, the team can terminate the contract.

Similarly, if the management suggests that the player is not competent enough to qualify as a team member, the contract can be terminated.

Also, if a player decides to breach the rules of a contract and neglects, refuses, or fails to cooperate, MLB can terminate the contract.

It is not uncommon for teams trying to void a contract. In fact, it has happened many times in the past.

They usually rely on paragraph 7 (b) 1 of an MLB contract to do so.

This particular paragraph states that teams can void a contract if the player neglects, refuses, or fails to follow the rules of personal conduct on the field.

For example, suppose the player is accused of bad sportsmanship, unprofessionalism, bad citizenship, or does not keep himself healthy or in good physical shape for the game.

In that case, the team can efficiently void the contract. These rules are both good and bad for the players and the teams.

However, under extraordinary circumstances in the past, it has been hard for teams to void a contract without significant hassles.

While this strictness makes games and careers safe for players, it is sometimes unfair for the teams since they have valid reasons to terminate a contract but cannot do so easily.

Hence, clubs, teams, and organizations are now pleading that voiding a contract should be made easier.

Payment Conditions In the Case Of A Terminated Contract

If the employers decide to let the player go at a particular time, they’re bound to pay him the whole amount promised to him at the start.

The player will be subjected to the termination pay decided in the contract.

He will also receive the traveling expenses, including the airfare and the meals, as he travels back to his home city.

The player can himself terminate the contract as well but will still be paid a promised amount.

Morality Clauses In MLB Contracts

Like most other organizations, even MLB has certain morality clauses in its contracts. These morality clauses are very specific, firm, and non-negotiable.

They are included and stressed because they keep the game safe and professional for everyone.

All the moral rules and regulations are legally enforceable on the players and cannot be neglected or denied.

These morality clauses also provide adequate protection of baseball’s rules and prevent behavioral issues on the field.

In case a player breaks any of these laws, there can be unpaid suspensions or even contract terminations.

How Are MLB Contracts Paid?

MLB Team meeting.

While the NBA pays its players within 24 installments a year, MLB has a different perspective. MLB teams and players negotiate how frequently they want to get paid.

This way, they can create customized payment schedules as per the convenience of both parties.

They create a base payment plan which dictates that every player will be paid twice a month when the season is on.

Once a player becomes bound to an MLB team, he is drafted for three whole seasons. Every year, the contract is renewed.

And then, at the end of these three years, the player is supposed to take the next step in his career.

Payments In Case Of Injuries

All Major League Players get paid their original salary even when they are on the injured list.

Any injured or unwell MLB player cannot be removed from the 25-man roster by being sent to the minors.

Until the player is healthy again or the season has ended, he must be on the injured list and get his promised salary.

This rule applies regardless of whether the sportsman was injured on the field or during a game.

As long as they were an active participant of the roster when they were injured, they are liable to get their guaranteed pay.

Payments In Case Of Suspensions

Suspensions are one of the rare cases in MLB where the player does not get paid.

Therefore, the reason for the suspension plays a vital role in how long it will last and what effect it will have on the player’s pay.

Most suspensions are usually caused by failure to pass the PED (Performance-Enhancing Drug) tests, and these are the most extended suspensions in MLB.

Minimum Salary MLB Offers

Before we end this discussion, I want to answer one of the most frequently asked questions about MLB: the minimum salary.

Don’t lie; I know you were thinking about it and waiting for this one, weren’t you?

Well, we all want to know, so no judgment!

The minimum MLB salary for a player in 2021 is around $570.5 thousand (US dollars). This salary has increased every year for the past 15 years or so.

Are MLB Contracts Insured?

Contrary to its counterparts in NHL and NBA, MLB does not have a mandatory insurance policy so far.

Different clubs, however, can go out and get insurance separately, which they do.

Because if you look at it technically and logically, on a contract as big as that of MLB, insurance is expected.

But the biggest issue is that insurance almost always requires exceptions on any previous injuries. These exceptions make insurance expensive and pretty much useless!

But since MLB does not provide insurance, baseball clubs are on their own.

The premiums of these insurances can sometimes be expensive: 7% for pitchers and 3% of a position player’s contract.

In addition, for any team to collect an insurance policy, the player should miss a set number of predetermined days.

Even then, the insurance seeker gets about 60 to 80% of a salary.

In Conclusion

So, are MLB contracts guaranteed?

Yes, absolutely. But are they always guaranteed?

Not quite.

There are certain circumstances where non-guaranteed salaries and contracts are involved, even in MLB.

However, those circumstances are very rare, and most of the time, a guaranteed amount of payment is promised to every player in the organization.

But while these contracts provide a safety net for skilled athletes playing with good intentions, they also demand dedication, loyalty, and a lot of effort in return.

Not that it bothers players who want to get enrolled in MLB because these demands are somewhat justified.

Besides, when we pay someone a handsome amount, don’t we expect the best in return?

Paul Hall
Paul Hall

Hello, I’m Paul, a 45 year old passionate baseball fan and the owner of this website. I hope my article could help to answer your questions.

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