Guaranteed Contract

Definition

Players who obtain Major League contracts -- either via free agency or extensions -- are guaranteed the full amount of money promised by those contracts. Conversely, players signed to Minor League contracts must earn a spot on the roster in Spring Training or via an in-season promotion in order to have their contracts guaranteed. Arbitration contracts are not guaranteed either, as a club can release a player on or before the 16th day of Spring Training and be responsible for only 30 days worth of pay. Players cut between the 17th and the final day of Spring Training must be compensated for 45 days worth of pay (at the prorated version of their arbitration salary). But if a player that agreed to an arbitration salary breaks camp with the club, his contract is fully guaranteed.

Example

Right-hander Josh Johnson signed a one-year, $8 million contract with the Padres prior to the 2014 season. Despite the fact that he did not throw a single inning for the Padres, he earned the entirety of that $8 million because he had signed a Major League contract.