NBA Supermax Contracts Explained: Are They Worth It?
The supermax contract is the largest deal a player can sign in the NBA. It was designed to help small-market teams keep their best players. But has it worked? And are supermax contracts actually worth the money?
What is the supermax?
The Designated Veteran Player Extension, commonly called the supermax, allows teams to offer their own players a contract starting at 35% of the salary cap, regardless of years of experience. A normal max contract for a player with 7-9 years of experience starts at 30%. That 5% difference adds up to tens of millions of dollars over the life of the contract.
To qualify for the supermax, a player must have been named to an All-NBA team, won MVP, or won Defensive Player of the Year in the previous season. The contract can be up to 5 years with 8% annual raises. At current cap levels, a supermax contract can be worth over $300 million.
The success stories
Giannis Antetokounmpo signed a supermax extension with the Bucks in 2020 and won the championship in 2021. SGA signed a supermax extension with the Thunder and has been worth every penny, leading OKC to the best record in the West. When the supermax goes to a player in his prime who stays healthy, it is a great deal for the team.
The cautionary tales
John Wall signed a supermax with the Wizards and injuries derailed his career. He was paid over $40 million per year while barely playing. Russell Westbrook's supermax with the Thunder looked great initially but became an albatross as his game declined. The risk of the supermax is that you are committing massive money to a player for 5 years, and a lot can change in 5 years.
The small-market dilemma
The supermax was created to help small-market teams keep their stars. But it has had an unintended consequence: some stars decline the supermax and leave anyway, while others accept it and become untradeable because no other team wants to take on that salary. Small-market teams are stuck ā they either overpay to keep their star or lose him for nothing.
The verdict
Supermax contracts are worth it for the top 5-7 players in the NBA. For everyone else, they are a gamble. The key question is: will this player still be a top-15 player in year 4 and 5 of the contract? If the answer is yes, sign the deal. If there is any doubt, think carefully.
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