Definition of Supermax Contract
What is a "supermax contract" in the NBA? What is meant by a "supermax contract"?
In the NBA, certain very fortunate (and good, of course) players will find themselves eligible for a DVPE, which stands for "Designated Veteran Player Extension", aka the "supermax deal".
In order to qualify for the "supermax contract", players must have played for their original team for seven or eight years. The exceptions to this rule:
1) Player that is traded to another team on their rookie deal
2) Player that is picked up via amnesty waiver
Here is the very important part - the player must also have distinguished themselves as one of the top players in the league in one of the following ways:
1) Named to All-NBA first, second or third team in immediately preceding year or in two of the last three years
2) Named Defensive Player of the Year (DPOY) in immediately preceding year or in two of the last three years
3) Named MVP of the league in one of last three seasons
If a player qualifies via one of these three options, they will be eligible to receive a "supermax deal". The players on the "All-NBA" teams have taken on a significantly increased amount of importance under this CBA deal, as there is literally tens of millions of dollars on the line.
Teams are able to pay out 35% of their salary caps to players on a "supermax deal". The projected salary cap in the first year of the player's supermax deal is used to calculate their first year of salary.
In addition, players are eligible to receive 8% increases in their annual compensation due to the fact that they are players with "Bird rights". So, a salary might start at $37,800,000 for the 2019-20 season and then jump to $40,824,000 and $43,848,000 in the years after.
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The purpose of the supermax contract is to allow teams to keep their homegrown superstars. Teams can offer more money than if the player decides to become a free agent, which gives players a major incentive to stick with their teams, even if they are playing in a small market.
