Sports Contracts: Damar Hamlin and his 'split' clause

Contracts for professional athletes--called standard player contracts--are just like any other. It's an  agreement  between  competent parties based upon the genuine  assent of the parties supported by  consideration made for a lawful objective  in the  form  required by law.

The only difference between Tom Brady's contract and Tyrone Swoops's is salary, bonuses, and the option to renegotiate. And while the right to assign (be traded) is part of a player’s contract, some players are famous enough to negotiate a 'no trade' clause.

Those salaries can be eye-popping at first glance. You see headlines. They regularly ink $30M deals! But only a very small portion of that, think in the range of $4M, is guaranteed. The rest is paid out in smaller apportionments over the course of the multi-year contract.

If the contract ends prematurely--through injury, a dip in skills, or cap (that is the team needs to release the player so that they can pay other players without going over the league cap)--they may not receive the remainder of the money. It depends what's in the contract.

Sports contracts got some renewed public interest after Damar Hamlin suffered an on-field heart attack. While it's still unknown what caused the heart attack and the athlete is recovering, he was put on the injured reserve list (IR). At issue was a 'split' clause.

Split clauses are part of that guarantee clause and allow professional teams to pay the player less money if they're injured. So if football, a notoriously rough sport, causes them to be so hurt that they can't play football--they don't get paid their full contract amount.

The players may be entitled to some worker's compensation benefits, but those are usually pretty low compared to the salary a pro-footballer is expecting to make and the intense physical toll the game takes on the body with delayed issues like CTE coming later in life.

Thankfully for Hamlin, the NFL announced it was amending the clause in his contract to pay him out in full. But that is a concession to Hamlin and the very public, dramatic attempt to resuscitate him on national television. Other NFL players on IR might be out of luck. For now.

A few players have recently been given 'fully guaranteed' contracts. Regardless of why they're released from a team, they'll still be paid in full. With the negative publicity over Hamlin's contract combined with the recent full guarantees issued, league norms may be shifting.