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The Contract Year Phenomenon



In professional sports, earning long-term deals are not guaranteed. Most contracts in professional sports are lucrative, but teams (e.g., owners) will be quick to trade or release a player if the performance isn’t helping the team win games or sell tickets. When looking at players' performances you may notice that athletes usually put up impressive statistics in the final year of their contracts. This is the contract year phenomenon. Players understand that as a result of high performance in their “contract year”, they will sign a new lucrative contract worth incredible amounts of money. However after signing this deal - we occasionally see a dip in performance following this highly motivated season. Why is this the case?


Introducing the ‘contract year’ phenomenon.


The Journey to the Top

Athletes work incredibly hard to make it to the professional level. Once the professional rankings are reached, a reliable spot/contract on a team isn’t always guaranteed. A player must compete against other talented players (the best in the world) day in and day out to get starting positions or roles that they are happy with. When it comes to playing time… the contracts speak loudly. The point is the sheer work ethic, dedication, and sacrifice professional athletes possess to be at the top of their game is remarkable. As a result, they want to be compensated adequately for their effort; rightfully so. Money is a powerful motivator; it provides security, freedom, and stability. However, that freedom can lead to comfort and a lack of motivation to continue improving their craft. What else would motivate an athlete to work as hard as possible if not for money? If a contract is a sole motivator for becoming a better player, that level of play will dip post-contract extension, which is the main idea around a player having a “contract year.”


The Case of Erik Dampier

A famous example of a player having a contract year is former NBA center, Erick Dampier. In his last season with Golden State in 2003-2004, he averaged 12.3 ppg and 12.0 RB and shot over 50 percent from the field. These stats are solid for a big man, but comparing those stats to the previous season, where he put up 8.2 ppg, 6.6 RB, and shot under 50% from the field, that is an exceptional improvement. After signing a long-term deal with Dallas, those averages came back down to earth. Did he stop trying? Possibly. In an email exchange between sportswriter Bill Simmons and renowned author Malcolm Gladwell, posted on Simmon’s now archived blog “The Curious Guy,” Gladwell provides a well-rounded explanation on Dampier’s decrement in performance after signing with Dallas:

Gladwell: What can we conclude from this? The obvious answer is that effort plays a much larger role in athletic performance than we care to admit. When he tries, Dampier is one of the top centers in the league. When he doesn’t try, he’s mediocre. So a big part of talent is effort. The second obvious answer is that performance (at least in centers) is incredibly variable. The same person can be a mediocre center one year and a top 10 center the next just based on how motivated he is. So is Dampier a top 10 player or a mediocre player? There is no way to answer that. It depends. He’s not inherently good or bad. He’s both. The third obvious answer is that coaching matters. If you are a coach who can get Dampier to try, you can turn a mediocre center into a top 10 center. And you, the coach, will be enormously valuable. (This is why Phil Jackson is worth millions of dollars a year.) If you are a coach who can’t get Dampier to try, then you’re not that useful. (You may want to insert the name Doc Rivers at this point.)


Motivation is a major factor in a players psyche. Dampier was motivated by the prospect of a lucrative contract and, once he was signed, it appears that his motivation decreased. This mindset depicts an important distinction between extrinsic and intrinsic motivation. What Dampier was motivated by (money) is an example of an extrinsic motivator: something external, usually in the form of a reward. In contrast, if Dampier put up some strong numbers out of a pure passion for the game, that would be an example of an intrinsic motivator: performing a behavior for enjoyment and not out of a desire for a reward. The behavior (passion for basketball) is the reward. Think of players (aka GOATS) like Michael Jordan, Kobe Bryant, LeBron James, and Stephen Curry: guys that made/are making ungodly amounts of money each year yet have won multiple championships and MVP rewards in their respective careers. Money alone was not the sole motivator for these guys, or else they wouldn’t have won as many chips as they did. The intrinsic motivation to become the best version of themselves fueled these players to reach incredible feats. Also, an essential contribution to each of these players' mindsets can stem from the wisdom they received from Hall of Fame coaches like Phil Jackson and Steve Kerr. These coaches each knew how to instill a fire in their players and get them to play for the sake of winning: not merely to earn as much money as possible. Although, money and contracts usually come as a byproduct of training and playing hard day in and day out.


Takeaway

The contract year phenomenon is more prevalent in the NBA because of the league’s high salaries and lengthy contracts. This is sometimes seen in the MLB and usually never in the NFL because players’ contracts are not guaranteed. The fact that an NFL player can sign a big contract with a team and then be released without pay highlights players' need to be motivated by something other than money. Since that internal motivation will most likely be unaffected by external factors, it will keep performance consistent independent of salary. That said, it is understandable for an athlete to be motivated by a lucrative, long-term deal. It becomes a problem when it’s the only motivating factor to play better. Money will be earned and spent, but a player’s legacy will last forever. Find work or training that you enjoy - it takes both intrinsic and extrinsic motivation for success.

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