NBA: The poison pill that is the supermax contract and a potential solution

Taking a closer look at what impact the NBA’s supermax contract has on teams and a potential solution to the problem

In 2017, the new CBA introduces a new concept to the world of the NBA, the “Supermax Contract”. But exactly what is the supermax contract? Essentially, it’s a contract a “star” NBA player can sign with a team that earns $250 million over five years.

For an NBA player to sign this kind of contract must qualify for it. The different criteria’s are:

1. He makes one of the three all-NBA teams or is named either defensive player of the year or most valuable player the previous season.

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2. He has made one of the three all-NBA teams or has been named defensive player of the year in two of the prior three seasons or the league’s most valuable player in one of the three prior seasons.

And this crucial stipulation: He must be on the team that drafted him or must have been traded on his rookie deal to another team.

Question is, is the supermax really a contract that will work in the NBA? We will examine how it potentially handcuffs teams and a potential alternative option to locking up a huge chunk of a team’s salary cap space on just one player.

NBA players with supermax contracts

Okay, now that we understand what is the supermax contract and how can a player qualify for one, let’s get to the main theme “the Supermax contract is helping NBA Teams?”.

At the moment, these are the four players that have signed the supermax contract:

– James Harden with the Houston Rockets signed through to 2022-23 with an average salary of $42.3 million.

– Stephen Curry with the Golden State Warriors signed through to 2021-22 with an average salary of $40.3 million.

– John Wall with Washington Wizards signed through to 2022-23 with an average salary of $42.3 million.

– Russell Westbrook with Oklahoma City Thunder signed through to 2022-23 with an average salary of $41.3 million.

With some coincidence, we have two NBA players that are “winning” teams, with James Harden and Steph Curry getting into the Conference Finals in the 2018 playoffs. But, on the other hand, we had two players that are teams that can’t advance beyond the first round of the playoffs.

For this article, we will only analyze the cap situation of the Thunder that has the “losing” record and is the one that has the most difficult cap situation.

OKC Thunder cap situation throughout the years:

Player Age 2019-20 2020-21 2021-22

Russell Westbrook 30 $38,506,482 $41,358,814 $44,211,146

Paul George 28 $33,005,556 $35,450,412 $37,895,268*

Steven Adams 25 $25,842,697 $27,528,090

Dennis Schroder 25 $15,500,000 $15,500,000

Andre Roberson 27 $10,740,741

Jerami Grant 25 $9,346,153 $9,346,153*

Patrick Patterson 30 $5,711,200*

Terrance Ferguson 20 $2,475,840 $3,944,013**

Nerlens Noel 25 $1,988,119*

Abdel Nader 25 $1,618,520+ $1,752,950**

Hamidou Diallo 20 $1,416,852 $1,663,861**

Kyle Singler 30 $999,200 $999,200 $999,200

Total Salaries $146,822,878 $137,543,493 $83,105,614

NBA Salary Cap Max $109,000,000 $116,000,000 $121,000,000

Cap Space -$37,822,878 -$21,543,493 $37,894,396

(*Player Option, **Team Option, +Non-Fully Guaranteed, ItalicCap Hold)

Now that we can see the Salary Situation to the next three years of the Thunder there is something in common, lack off Cap Space. And not to blame Westbrook, but his contract has 35% on average of the Cap Space of his team.

The idea of the Supermax Contract is to have the players stay within the organization that has invested money, time developing that player. Let thinks like CEO of the company, if we can identify a young person that has rough talents and huge potential normally we will try to attract that person to work for us as a trainee.

If the person develops as the person we thought we formally a signed him or her to a contract, we don`t want that another company stole that talent from us. Well in this example the company is an NBA team and the CEO is like the General Manager.

Supermax contract 2.0… sort of

The idea of the supermax contract has a solid foundation but maybe the idea was wrongly executed. Let’s remember the main purpose of the supermax contract, to make it more difficult for a player to leave the team that develops you as a player. However, if your contract absorbs 35 percent of the team’s cap space, it is difficult to build a quality team around you and therefore compete for a championship.

Now, let’s try to propose a little change in the concept. If we can put in simple words the concept of supermax contract is to compensate the player for their loyalty to a team, a “Loyalty Bonus”.

What about that we paid the player the same amount of money but instead of hitting the cap space directly and limit our option to build a competitive team, we can sign them to friendlier contract and give them a bonus.

Player 2019-2020 2020-2021 2021-2022

Russell Westbrook $38,506,482 $41,358,814 $44,211,146

Devin Booker $27,250,000 $29,430,000 $29,430,000

Cap Relief $11,256,482 $11,928,814 $14,781,146

In the example above we have the top paid players of the Thunder and Suns, in Westbrook and Devin Booker. Booker recently signed his extension as a rookie with the Phoenix Suns, he is a promising young player that hasn’t yet any award to be paid as a supermax player. If we signed Westbrook to the same contract of Booker, and work the difference like a “Loyalty Bonus” we can have a cap relief of about $11 million in seasons 2019-20 and 2020-21 and in season 2021-2022 about $14 million.

Of course, this is not the solution to every player in line for a huge raise. This example is only if we apply it to a supermax contract player, however, if we apply this, for example, both to Westbrook and George, the top 2 players of the Thunder, we can have in average in the first two seasons about $17 million in cap relief.

If NBA teams can have this kind of luxury, it will make the life of a GM not that complicated. Let’s not forget that is complicated to build a competitive team and there are a thousand situations to evaluate like health, chemistry, etc. Navigating around a supermax shouldn’t be one of them.