The NBA will continue to have maximum contracts in the new collective bargaining agreement, which leaves the top-5 and even possibly the top-10 players in the league underpaid relative to their value both on and off the court. The uncomfortable reality is LeBron James has been worth 100 percent of the salary cap since he was 20 and he just finally became the highest paid player in the NBA this season.
While eliminating the max contract would completely reshape the system and eliminate the NBA middle class, there was a compromise in which superstars can be paid supermax contracts worth 35 percent of the salary cap for longer durations of their career. The ability of select players to earn more money and for their existing teams to keep them is indisputably the most impactful new element of the 2017 collective bargaining agreement.
The NBA has accorded a new financial bar to its best players and that meritocracy was certainly needed. As perennially underrated Mike Conley has been during his career, there is a fundamental flaw with he and Kevin Durant being subject to the same max contract structure.
Within the existing system, players could only be paid up to 35 percent of the cap once they hit 10 years of service and they couldn’t sign a four-year or five-year deal if they hit the age of 36 during the life of the contract. The limitation on the number of years a superstar player could be paid appropriately was unfairly short.
Players either on or coming off their second contract can now sign an extension, or a new deal as a free agent, worth 35 percent of the cap even if they have not accrued 10 years of service if certain criteria are met. In order to qualify for the provision, players must have been named to an All-NBA team in the previous season or two of the previous three, or either be an MVP or Defensive Player of the Year in any of the previous three seasons. In addition to that individual achievement, players must also remain on the team they were on during their rookie contracts.
To get a feel for who this provision will apply to, the players who hypothetically would have been eligible for a supermax contract during the 2016 offseason are listed at the end of this article. With the exception of Joakim Noah, who wasn’t offered a max contract in free agency after two injury-plagued seasons, the list is a fair and accurate representation of the players most deserving of a supermax contract. The framers of the new CBA did well on this point: it isn’t too broad since they use All-NBA instead of All-Star appearances, and it isn’t too narrow since they don’t merely include the first team All-NBA selections.
One deserving player excluded from the list is Anthony Davis who similarly did not qualify for the Rose Rule, a provision added in the 2011 CBA specifically designed to benefit players such as Davis. Because Davis had an injury-shortened 15-16 season and was not named to one of the three All-NBA teams, he lost $24 million on his five-year extension coming off his rookie contract. Davis will almost certainly be an All-NBA player this season and will qualify for an extension in the future.
One of the first beneficiaries of the new rule will be Stephen Curry. The estimated salary for Curry this coming offseason under the new rule is $209 million over five seasons instead of $165 million over five seasons under the previous CBA. The $44 million difference in the two contracts the Warriors can offer also coincidentally matches the four-year, $44 million extension he signed in 2012. A rival team can only offer Curry a four-year, $133 million deal, which is a difference of $76 million. The Warriors are in a place competitively where they didn’t need the additional financial advantage, but they can write off the extra $44 million as both symbolic and tangible makeup pay.
Russell Westbrook, James Harden, Paul George and DeMarcus Cousins will be afforded the opportunity to sign extensions in 2017 under the new rule assuming they continue to qualify. All four players have been in less certain long-term basketball situations than Curry with the Warriors, but the financial incentive for them to remain with their current teams is consequential. Westbrook will hit 10 years of service and able to sign for 35 percent with any team (albeit for smaller yearly raises) in 2018 and Harden becomes eligible in 2019, while George and Cousins reach that level in 2020.
For a player like Cousins, who has widely been considered the most likely superstar to be traded or leave his current team in free agency, the power dynamic now tilts in favor of the Kings. Durant in 2016, Dwight Howard in 2013, as well as LeBron James and Chris Bosh in 2010 only left behind trivial amounts of money for preferred playing situations. None of those players left a franchise and roster situation anywhere nearly as dire as Cousins’ with Sacramento, which will make him the first real litmus test for the effectiveness of the new rule.
Some staunch owners reportedly wanted to go even further in controlling the movement of superstars following the departure of Durant to the Warriors, but the new system is a big win for them on that point and the existing imbalance that favored the mobility of players has undeniably shifted back in their favor.
The unintended consequences for this supermax structure still are plentiful:
1. Players will sign supermax deals and then force their way out via trade at a later date.
Under the existing structure, players were traded when they approached the free agency before their third NBA contract and it became clear they would likely leave their franchise. Carmelo Anthony, Deron Williams, Chris Paul, Dwight Howard and Kevin Love were each preemptively traded in this type of situation. James and Durant were on title contenders in their walk years and also generational talents where even recouping 50 percent of their value via trade is an impossibility, hence they stayed all the way to the end.
Anthony would have surely extended his deal with the Nuggets in 2011 considering the money differential and because they were a competitive team at the time. By forcing a trade to the Knicks, Anthony’s calculus was more about market and off the court opportunities than basketball or his NBA contract. Anthony was in a similar spot in his 2014 free agency and there was a report that he decided to take the extra money from the Knicks and he could attempt to be traded if things didn’t work out. Anthony’s no-trade clause allows him to control the terms even if he and the Knicks have remained in a relative limbo where they’re neither fully rebuilding nor contending for a title.
The other players were in more uncertain situations in regards to their surrounding talent, but the blueprint of signing a supermax extension and angling for a trade at a later date is the most likely outcome for anyone on a non-contender.
This still benefits the incumbent franchise since they can control the timeline and the destination to a lesser extent while also providing a substantial return of value in the form of players and picks.
Players who try to get themselves traded have routinely been villainized by both media and fans. While Paul and Love suffered no consequences with their trades, Anthony and Howard in particular have never recovered. From a basketball perspective, the team in which they’re traded to will be stripped down to facilitate the transaction as was the case with both Anthony and Williams.
The decision of Anthony to force his way to the Knicks via trade so he can sign a pre-lockout extension in 2011 continues to plague him and probably cost him the chance of playing with Chris Paul.
2. Players will try to exert more control while on their rookie contract or even before the draft.
The existing structure already gave a massive amount of control to teams over players coming into the NBA. Because of the extension window after Year 3, followed by restricted free agency after Year 4, a player has to wait five years to reach true free agency. There have been no max players to let that process play out with Ben Gordon in 2008 being the most notable player to sign the qualifying offer as a restricted free agent and then leave the next season as an unrestricted free agent.
On top of the existing financial advantage given to teams, superstars will now have to wait until they hit 10 years of service to make comparable amounts of money with a team other than their rookie deal team. The decisions made on draft night will be unprecedentedly permanent for both the players and teams.
The incentive for a player to try to dictate the process and get to a preferable situation either before the draft or during those first four seasons will be monstrous. Once a player is in the building, it will be more difficult for them to force a trade, particularly since there is so little leverage for them to use, which leaves the draft as the time and situation to assert control. Special players with a greater probability of eventually qualifying for the rule will likely be worth the risk even if they choose not to workout for certain teams or threaten to play in an overseas league. If a player is one or two draft slots away from his preferred team, it shouldn’t be entirely impenetrable to get himself there.
There will be more draft night trades as we saw in the 1990s with the Warriors trading multiple future first round picks for Chris Webber. We could also see the same type of multi-month stalemate employed by Steve Francis to get his draft rights traded by the Vancouver Grizzlies to the Rockets, or player going abroad for a year as Danny Ferry did when he refused to play for the Clippers in 1989.
3. Teams still have no guarantees of keeping their supermax players and cannot offer the supermax if the player doesn’t qualify.
The right player stuck with the wrong franchise can still ideologically decide being paid a standard max contract in a now cash rich NBA is better than wasting the prime seasons of his career outside of title or even playoff contention. The supermax was unavailable to everyone under the 2011 CBA so he can willfully ignore the financial consequences, as stark as those will be, in favor of fully utilizing their irreversible prime.
For players who don’t qualify, their teams will operate under the current constraints where the financial advantage is not as meaningful. The most notable current example of this is John Wall who has yet to be an All-NBA player and will struggle to do so given the competition at the guard spots.
Players on the level of Wall or Gordon Hayward will now be the realistic ones teams can trade for and sign in free agency.
4. Do some teams even want the bigger financial burden for the second tier superstars?
During the 2016 offseason, the Hawks didn’t even fully exercise their existing financial advantage in attempting to re-sign Al Horford. Atlanta could have offered up to $153 million over five seasons to a player that finished just outside of the new All-NBA supermax criteria, but instead only offered as much as $136 million over five seasons. Horford was prepared to accept $142 million over five seasons but signed with the Celtics for $113 million over four seasons when Atlanta declined to budge. Horford had played his entire career with the Hawks and they let him leave over a rather trivial amount of money.
Even Mark Cuban, who spent his initial years as an NBA owner brashly flashing cash, let himself get outbid in 2004 for future two-time MVP Steve Nash.
5. The NBA as a single entity is hurt by the rule.
While Durant going from one Western Conference Final team to the other is the exceedingly rare scenario owners are seeking to protect themselves against, they are restricting the movement of some of their best players to play in better basketball situations that would benefit the league as a whole.
The 2010-2014 Heat advanced the growth of the NBA more than LeBron ever could with the Cavaliers as they were constructed in 2010, as did the arrival of Kevin Garnett and Ray Allen in Boston in 2007. Ratings bottomed out when LeBron reached The Finals with an overmatched Cleveland team in 2007 and recovered dramatically the next season with Celtics vs. Lakers.
The 2012 Thunder would have also continued to advance the popularity of the league had they stayed together and the only meaningful difference for the NBA between having a superteam in Oklahoma City instead of the Bay Area are the gate receipts.
LeBron is on his way to his seventh straight Finals appearance and that hegemony is ultimately good for the national television deals that have fueled the league’s current financial boom. Lone wolf teams with one superstar that LeBron experienced early in his career will now have longer lifecycles.
Finally, there will be less interest during the NBA offseason, which has played a major role in generating relevance in the league for more casual fans. The NBA offseason will now more closely resemble the NFL offseason in which only marginal players change teams.
Eligible Qualified Players in 2016 Offseason
- Stephen Curry
- Kawhi Leonard
- DeAndre Jordan
- Paul George
- James Harden
- Klay Thompson
- Damian Lillard
- DeMarcus Cousins
- Blake Griffin
- Draymond Green
- Kevin Durant (if he re-signed with Oklahoma City)
- Joakim Noah (if he re-signed with Chicago)
Non-Eligible Qualifying Players in 2016 Offseason (Part 1)
- Andre Drummond (coming off rookie contract)
Non-Eligible Qualifying Players in 2016 Offseason (Part 2)
- LaMarcus Aldridge (not with rookie contract team but eligible under 10 years of service rule)
- Kyle Lowry (not with rookie contract team but eligible under 10 years of service rule)
- Chris Paul (not with rookie contract team but eligible under 10 years of service rule)
- LeBron James (eligible under 10 years of service rule; side note: would returning to Cavs still count as rookie contract team if under 10 years?)
- All other players with 10 or more years of service are eligible to sign for 35 percent of the cap assuming their team either has their full Bird rights or sufficient cap space.