scorecardNBA supermax contracts pay stars at least $200 million to stay with their teams - but they're backfiring as often as they work out
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NBA supermax contracts pay stars at least $200 million to stay with their teams - but they're backfiring as often as they work out

Scott Davis   

NBA supermax contracts pay stars at least $200 million to stay with their teams - but they're backfiring as often as they work out
Sports6 min read
  • The NBA and players union created a contract option known as the "supermax" to allow teams to pay significantly more than the competition to keep their best players.
  • Six players have signed the supermax so far, but only about half of those contracts have become long-term, successful pairings.
  • Giannis Antetokounmpo recently signed the supermax with the Bucks, saving the NBA from a potential crisis as players have turned it down.
  • It's fair to question whether the supermax has worked, and it may need to be changed going forward.

Many around the NBA, from executives to analysts, breathed a sigh of relief last week when Giannis Antetokounmpo announced that he would sign the five-year, $228 million "supermax" extension with the Milwaukee Bucks.

A superstar was staying in place. The supermax had worked as intended.

For a tense few weeks, it seemed as if Antetokounmpo might spurn the Bucks. Antetokounmpo didn't immediately sign the extension when the Bucks offered it at the start of free agency on November 20, sparking fears that he may leave Milwaukee next offseason as a free agent.

It would have been another blow to NBA small markets - the latest in a series of them - if Antetokounmpo had turned down the supermax from a perennial contender for, say, better weather and endorsement opportunities. It's precisely what the supermax was intended to avoid.

Added to the collective bargaining agreement between the NBA and players union in 2017, the supermax was designed to give teams a way to offer their stars significantly more money than other teams. The supermax allows players entering their seventh, eighth, or ninth seasons to sign new contracts or extensions worth 35% of the salary cap, with 8% annual raises each season. To be eligible, they have to have recently won MVP, Defensive Player of the Year or made an All-NBA team.

But three years into the existence of the supermax, it has not consistently resulted in happy, long-term marriages between franchises and stars. In some cases, it has created challenges for team-building because of the large sums owed to players. In other cases, the huge financial advantages that come with the supermax haven't been enough to convince star players to stay with their teams.

Antetokounmpo signing the extension may have saved the league from a full-blown crisis. But the overall success of the supermax thus far remains hazy.

The massive supermax salaries may not be for everyone

Six players have now signed the supermax, formally known as the Designated Veteran Player Extension: Stephen Curry, John Wall, Russell Westbrook, James Harden, Damian Lillard, and Antetokounmpo. The contracts have all been upwards of $200 million, except for Wall, whose extension was 4 years, $170 million.

One agent told Insider that the supermax has had a 50% hit rate - it's worked out well for Curry and the Golden State Warriors, Lillard and the Portland Trail Blazers, and likely now Antetokounmpo and the Bucks.

But the other three cases are more complicated.

Westbrook signed his supermax extension with the Oklahoma City Thunder in 2016-17 after an MVP season. It was seen as a win for the small-market Thunder, who had lost Kevin Durant to the more-glamorous Warriors the previous offseason.

But two years later, the Thunder traded Westbrook to the Houston Rockets. Then after just one season, the Rockets traded Westbrook to the Washington Wizards - for Wall, also a supermax recipient.

Wall signed his supermax extension in 2017. Less than two years in, though, Wall had a series of injuries that kept him off the court for the better part of two seasons.

The Wall-Westbrook trade was a rare 1-1 swap of star guards. It didn't drastically improve either team, nor did it help either team's financial situation. Westbrook and Wall's giant salaries, combined with their age, injury history, and tricky on-court fits, left them with a bare trade market.

Westbrook's extension with the Thunder ended up looking more like a formality than a commitment from either side, while Wall's injuries turned him from an asset to a burden for the Wizards.

This is part of the bind of the supermax - teams want to keep their stars, but they may not be worth the money of the supermax. One NBA GM, whose identity is known to Insider but asked to remain anonymous when discussing the supermax, said the salaries attached to these extensions can be "debilitating" to teams.

Very few players are truly worth the supermax, the GM said: "LeBron's really the only guy in the NBA that I think you can say beyond a shadow of a doubt."

He added: "Steph Curry, I think, is one who you could probably say that's true of. But there really aren't many guys ... It's in the range of three, probably."

Some teams have already made the call on whether their star players are worth it. The Charlotte Hornets, for example, did not offer Kemba Walker the supermax in 2019 after he made an All-NBA team. They instead sent him to the Boston Celtics in a sign-and-trade that returned Terry Rozier and a second-round pick - hardly a coup for an All-NBA guard.

Some players, too, have turned down the massive payday. Paul George made his desire to leave the Indiana Pacers clear in 2017, walking away from a potential supermax. Kawhi Leonard was eligible to sign the supermax with the San Antonio Spurs but was traded after a fallout with the team. And Anthony Davis requested a trade from the New Orleans Pelicans in 2018, months before he could have signed the supermax extension.

These superstars' decisions to turn down $200 million-plus deals in order to leave small-market teams (and later join Los Angeles teams) has also raised questions about whether the ability to outbid competition is enough for the incumbent team.

The supermax may need tweaking

Going forward, the NBA and players union might need to tweak the rules around the supermax.

For instance, what if supermax salaries only partially counted against the salary cap? Antetokounmpo is set to make $39.3 million in 2021-22. What if only 80% of that money counted on the Bucks' salary cap? Antetokounmpo, of course, would still earn the full amount, but reducing the cap charge would give the team slightly more flexibility with other players' contracts. It's unclear if the idea has any traction in the league.

The GM who spoke to Insider suggested that teams should receive compensatory draft picks if a supermax-eligible player leaves in free agency. But the agent, who also asked to remain anonymous, warned that it would be shot down by the players union, as it would impact free agent markets by forcing teams to give up assets.

Perhaps teams should be able to offer the extension earlier in players' careers, when they haven't yet made as much money?

The agent suggested a clause that doesn't allow a team to trade a supermax player or for a supermax player to request a trade within three years of signing the deal, ensuring some accountability from both sides.

The latter idea resonates in light of James Harden's recent trade request from the Rockets.

Harden signed his supermax extension in 2017. Given his age and contract (which is set to play him $47 million in 2022-23), his trade market is limited. The Rockets don't have the flexibility to make great upgrades around him, nor are they likely to receive equal value back for their franchise player.

Perhaps these binds are a sign that the supermax contract is working on the whole. It's forcing teams to make decisions about who is really worth the money. In that sense, Westbrook and Wall could become cautionary tales. Players, meanwhile, will have to weigh whether they want more money to stay put or earn less to play elsewhere.

Antetokounmpo's signature may have saved the NBA from a crisis over small-market teams. But if the supermax remains a part of the NBA in the years to come, as both the GM and agent expect, it may need to be tinkered to truly achieve what it intended.