What is a Max Contract in the NBA?

This post may contain affiliate links, meaning we get a commission if you make a purchase through our links, at no cost to you.

Spread the love

Facebook
Twitter
Reddit
Pinterest

NBA players are the highest-paid professional athletes among the four major sports in North America. That’s why when talking in-depth about the league, the topic centered around contracts always comes up. The fact of the matter is contracts are complex agreements, and they might even change depending on the agreed Collective Bargaining Agreement. One question that baffled many is, ‘What is a max contract in the NBA?’

Read more and find out.

How Does an NBA Max Contract WorkHow Does an NBA Max Contract Work?

A max deal is a type of contract that NBA teams can give to qualified players. The value is mainly determined by the amount of NBA experience that the player has. For example, the max contract a team can give a player with five years of experience differs from the one with an eight-year resume.

How do max contracts work in the NBA? Well, players with six or fewer years in the league are allowed to sign a contract up to 25 percent of the team’s total salary cap. Seven to nine-year vets may sign a contract worth 30% of the cap, while 10-plus-year veterans up to 35% (also called the supermax). 

Here are more specifics you should be familiar with.

  • The supermax contract, officially recognized as the “Designated Veteran Player Extension,” permits teams to re-sign qualifying players to maximum five-year contracts for up to 35% of the salary cap, with an 8% escalation in each succeeding year.
  • Then, there are called Bird rights. Named after the legendary Larry Bird, this allows a team to go over the salary cap limit to sign their own player. Bird rights are divided into three types: full, early, and non-bird. 
  • Full bird rights mean a player spent three straight years on the same team. Thus, the team can offer a max that ranges between 25% to 35%, depending on his years of service.
  • The second type, the Early Bird rights, is a distinction given to a player who has stayed with a team for two years without leaving in free agency. NBA clubs can present up to 175% of the prior compensation or 104.5% of the average league salary, depending on which is higher. 
  • A non-Bird rights contract is offered to a player who’s only been on a team for one year. The organization can offer him a max of 120% of his previous salary. Any other team can only offer lower salaries. Another advantage for franchises holding a player’s Bird rights is that they can offer a five-year contract, while the others can only offer four. 

Because max contracts are directly tied to the salary cap, it will change from season to season. There may also be contract clauses or qualifiers that involve players making All-NBA teams, All-Star teams, or winning MVPs.

How Long is an NBA Max ContractHow Long is an NBA Max Contract?

Max contracts offered by organizations to players to whom they own the Bird rights may be up to five years. However, teams may also offer max contracts with lower years attached. But then again, that negates their advantage to re-sign their own players.

There is also a 1+1 max contract in which a player signs for one year to remain with the team while having a player option for the second year. For a player, this type of contract is the equivalent of hitting three birds with one stone: He gets as much as he can for one year, protects himself in case an injury happens by opting into the second year, and keeps his options open in the future if the team does not improve.

What is the Highest Max Contract in the NBAWhat is the Highest Max Contract in the NBA?

Max contracts have been handed out like calling cards lately, but did you know the highest NBA supermax contract right now? It’s the Denver Nuggets’ Nikola Jokic. Jokic has not yet reaped the benefits of his supermax contract, but that five-year treasure will take effect in 2023. The Serbian secured a five-year $270 million contract that will pay him an average of over $54 million yearly.

The next is the Wizards’ Bradley Beal, who signed a five-year, $251 million deal last year. He will be paid around $50 million a year.

The only player to have signed two supermax deals in the NBA is none other than Steph Curry. Curry signed a $201 million supermax deal in 2017 and another one in 2021 worth $215 million. The two-time MVP will be paid around $60 million in the last year of that deal. 

Other players currently in max contracts are Damian Lillard, Giannis Antetokounmpo, Luka Doncic, and Rudy Gobert. Devin Booker, Karl-Anthony Towns, and Joel Embiid have their max contract beginning next year. 

What is an NBA Supermax ContractWhat is an NBA Supermax Contract?

Supermax contracts are supersized contracts dedicated to qualified players, allowing them to be signed by up to 35% of the salary cap with increments of 8% annually. Teams owning the Bird rights of a qualified player may offer a five-year supermax, while any other team may only offer four years. 

In the case of supermax contract extensions, teams are allowed to keep players for up to six years. Here are the specifics of such a contract, depending on the player’s years of service:

  • A player with seven or eight years of service and two years remaining on his current deal is eligible for a supermax extension for four years. This allows the player to remain on the team for the next six years.
  • An eligible player with seven or eight years of service and one year remaining on his contract may be extended to a five-year supermax. This keeps the player on the team for the next six seasons.
  • Any qualified free agent with eight or nine years of service is eligible for a five-year supermax.

Another feature of a supermax contract is that a player can’t be traded in the first year. That said, not every NBA veteran can be signed to a supermax. A player must be an All-NBA selection or a Defensive Player of the Year in the most recent season or the two seasons prior. The league MVP in any of the three previous seasons also qualifies for a supermax.

Why does the NBA have max contracts? It discourages the best players from jumping from team to team since the organization that owns their Bird rights can offer more money than other franchises. But with that being said, it’s not always a guarantee. Kevin Durant and LeBron James signed with different teams after staying with one franchise for years.

Wrapping Things Up: What is a Max Contract in the NBA?

The NBA has been so marketable the last few years that much money has been thrown around lately. In fact, the average salary of NBA players is over $9 million.

One type of contract that allows certain players to earn so much is the max contract. What is a max contract in the NBA? It is a contract that guarantees a lot of money for qualified players. It is tied to specific achievements and the player’s years of service, which means a player with less experience receives less money than long-time vets.

Then, there is the supermax contract. It is basically a max contract on steroids, allowing qualified players to earn as much as 35% of the NBA salary cap with eight percent increases in the following years. These provisions enabled players like Nikola Jokic and Bradley Beal to earn over $50 million a year! 

Whether these players deserve massive salaries is a story for another day, but for now, the question, “What is a max contract in the NBA” has been addressed. Regardless of anyone’s opinion, the money these players make is a testament to how big the NBA has become worldwide.

We hope you enjoyed this post! If you did, be sure to check out our other basketball FAQ articles here.

Hoops Addict
Hoops Addict

Hoops Addict was created to help basketball fans of all ages learn more about the sport and find the best basketball gear to improve their ability to hoop. He has been a huge basketball fan for decades, watching thousands of basketball games through the years to learn the ins and outs of the game.

If you found this helpful, help us out by sharing this post!

Facebook
Twitter
Reddit
Pinterest

Readers of this post also read...

How is the NBA All-Star Team Selected

How is the NBA All-Star Team Selected?

Getting into the All-Star game is no simple feat. For some players, it may take several seasons of high-level play to get the nod. However, other exceptional talents come into the league with so much...

Read More
What Does DTD Mean in Basketball?

What Does DTD Mean in Basketball?

Basketball is a world of its own with unique terms or jargon, in and out of the court. Through the years, more terms have been developed to represent specific things about the sport, and understanding...

Read More