Many people feel professional athletes are overpaid for their efforts. Whatever the price paid for a player, the bang for that buck is measured by the player's performance over the term versus the expectations set out at the start of the term. Not every player is fortunate enough to play out his entire contract. On occasion, team management finds sufficient reason to want to cut their losses and buy out the remaining value of a player's contract. Sometimes, the reason is simply a matter of an athlete not giving the effort they initially did to earn the contract. Other times, injuries prevent a player from delivering on expectations. In rarer cases, a player just makes their team so mad that management will pay any sum to see that player leave town. Here is a look at some of the most notable contract buyouts in sports history.
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The NHL's New York Islanders' legacy for making bad managerial decisions is starting to overshadow its legacy as one of the greatest NHL dynasties of all time. Arguably the worst fiscal decision in team history was signing Alexei Yashin to a 10-year deal worth $87.5 million in 2001. After posting a strong first season with the club, Yashin struggled to put up point totals that reflected his salary for his remaining time with the team.
While fans could be convinced to forgive his unenthused play in the regular season, his pointless playoff performance in 2007 was inexcusable, and management felt forced to buyout Yashin's contract to make room under the salary cap for someone who might produce more points. The Islanders paid Yashin the remainder of his contract, and took on a reduced cap hit of $2.204 million. Unfortunately, the Islanders' management hasn't put the money to any more effective point production, as Yashin's 75-point season in 2001 still ranks as the best by an Islander in 13 years. Eventually, the Russian star returned to his homeland to play in the Kontinental Hockey League.
When NBA superstar Stephon Marbury was traded to his hometown team in 2004, the New York Knicks, many thought it would be a perfect fit for the superstar point guard. They couldn't have been more wrong. Marbury feuded with all three of his coaches, became entangled in a sexual harassment lawsuit filed against Isaiah Thomas and his play on the court was substandard. Sports fans can excuse many character flaws, but even the Pope would be booed in New York if he was getting $20 million a season and only putting up 16 points per game. By 2008, Marbury found himself hated by New York basketball fans and fighting for starting-player status on the team. Feeling slighted for not getting the starting position, Marbury skipped training camp and the Knicks then banned him from the team. During a lengthy standoff, the Knicks attempted to buyout Marbury for less than the $20.8 million owed to him, to which Marbury responded, "If I owed you $100 and I said I want to give you $80, what would you say? What would you say?"
Few people know exactly what was said, but eventually Marbury agreed to a buyout that was rumored to be about $2 million less than the full value. Marbury was then a free agent, whereupon he signed with the Boston Celtics for $1.3 million for one season. (For additional reading, check out: The Financial Impact Of The NBA Lockout.)
When Sheldon Souray was signed to a five-year, $27-million deal as a free agent by the NHL's Edmonton Oilers, it was meant to be a message to other prospective NHL stars: Elite players want to come to this city. However, the outcome of the deal may have negated the effect of that message. After two injury-riddled seasons in the first three years of his contract, Souray spoke out against the Oilers' management, claiming that he felt pressured to play sooner than he was ready and this pressure contributed to his reoccurring injuries. The way Souray handled his grievance was viewed as unprofessional by Oilers' management, and Souray found himself earning his $4.5-million average annual salary in the minor leagues.
Not wanting Souray's alleged negative attitude to have any influence on developing players in the organization, the Oilers arranged for Souray to join the Hershey Bears of the American Hockey League, which had no affiliation with the Oilers. After trying in vain to trade Souray while he was in Hershey for a full season (strange there were no takers on an aging, injury-prone, high-priced defenseman) the team eventually opted to buy out the remaining year of his contract in 2011, and absorb a $3.56-million cap hit spread over two years. Souray has since signed a new one-year, $1.65-million contract with the Dallas Stars.
The Bottom Line
Big-money contracts are put on the table by optimistic managers. They're betting that they've signed a player who can either exponentially improve upon established potential, or consistently perform at a high-level that's been proven in past seasons. However, making athletes rich beyond their imaginations can cause them to lose the motivation to perform at the highest level, and the pressure to live up to lofty expectations can overwhelm many athletes. Ultimately, when big-money players don't step up in the big games, their stock crashes and their buyers get anxious to sell. (For additional reading, check out: Top Pro Athlete Pension Plans.)