Decisions On The Dollar: What The NBA's Supermax Is And Isn't Doing

As the All-NBA teams were announced last Friday, most of the chatter surrounding the players with upcoming free agency who did – and did not – receive the honor of being named to one of the three teams and what that means for negotiating their next contract. The common word being thrown around is "Supermax." Let's break down what it is and its intended purpose in the NBA.

What is the Supermax?

Using this article from NBC Sports, the Supermax in the NBA is officially known as the, "Designated Veteran Player Extension." The rule allows for qualified players to be signed to a five-year contract with the team he was on in the previous season. Another team can only offer a maximum of four years. The money breaks down to that Supermax contract equaling 35 percent of the year's projected salary cap, with an 8 percent increase on that first-year amount each year afterward. In short, home teams gain the ability to offer one more year and more millions of dollars in hopes of convincing a player to stay.

The intricacies of the qualifications depend on a player's length of tenure in the NBA, with at least seven years of service being the standard for players under contract and eight years as a pro being the minimum for free agents. The three achievement qualifications that a player must have one of in order to be eligible are:

  • Be named to an All-NBA team in the most recent season or both seasons before it, or
  • Be named NBA Defensive Player of the Year in the most recent season or both seasons before it, OR
  • Be named NBA MVP in any of the three previous seasons

That first bullet point is the one that had the most interest, as there will be players waiting to see if they were selected to an All-NBA team. Players like Kemba Walker, Rudy Gobert and Damian Lillard met this qualification this year while players like Klay Thompson did not. This makes upcoming contract negotiations much more interesting.

The Supermax's Design

The short definition of the Supermax's purpose is so that superstars don't bounce from team to team. Rather, it's supposedly designed for smaller market teams (like Oklahoma City with Russell Westbrook and Utah potentially with Gobert) to keep the stars they developed to keep the league's top talent more spread out. For the good of the NBA, this is a noble cause. The Association is best when there is good talent in more places, thus allowing for more teams to be worthy of arena attendance and TV viewers.

Is The Supermax Working As Designed?

Complexity underlies a lot of simple ideas. A collection of simple truths make up the most complex of ideals. Simple questions can have simple answers. But when a modified is added, that complicates it. The Supermax is working, as superstars like Steph Curry and James Harden both signed the first two to be constructed. But it is and is not working as designed – as an incentive to keep superstars where they are.

Financial security is a big component of contracts. If someone does not believe more money will be available to them – especially in a performance-based deal, as all sports contracts are – that person is likely to take the most money possible and prioritize that security over other important factors like winning and place of residence. There are a great number of great players who can be dissuaded from signing with another team based on these factors.

A perfect example is Westbrook, who signed his Supermax to stay in Oklahoma City where he's beloved and believes he can still win. His sense of loyalty is so deeply rooted that he held a temporary grudge against former teammate Kevin Durant for signing with the Golden State Warriors in 2016. He even signed his Supermax on Durant's birthday – possible coincidence and possible act of pettiness. Either way, Westbrook and his competitive nature is greater than his desire to win a championship.

That is one type of player the Supermax can entice. The other is someone like Rudy Gobert. He's a very good player and elite him protector. But he plays a position in which some of his contemporaries (and those many would consider as good as or better than him) are younger than him. Gobert is 27. He plays the same position as Denver's Nikola Jokic, Minnesota's Karl-Anthony Towns and Philadelphia's Joel Embiid, who are 23, 24 and 25 years old, respectively. Gobert making an All-NBA team is not totally farfetched, but it is not the lock that better players have. Gobert could easily miss being selected next season and if he doesn't sign a potential Supermax, he'd lose millions in possible earnings. But, if he bets on himself and makes an All-NBA team again, his earnings could increase to the point where we question if he's worth the contract.

This brings me to Kemba Walker, who made Third-Team All-NBA, earning his Supermax eligibility. He's also a free agent. He must decide if being on a better team is more important than added financial stability. If he's a superstar, playing in a bigger market on a better team would allow him to make more money off the court, offsetting the "loss" from not signing a Supermax offer from the Charlotte Hornets. That is why the Supermax isn't working on elite players whose priority is on seizing an opportunity to win a championship, wherever that may be. They could be in more lucrative markets and dabble in extracurricular projects, such as LRRM's Uninterrupted and other business ventures. The landscape suggests that only the true elite have access to those opportunities, while the next tiers of stars mostly make money from their contracts.

The Supermax, if anything, is a very interesting cog in the business machine of the NBA. We'll see who's offered it and what they do with the offer. May this be an event-filled offseason. Happy NBA, folks.

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