NBA Free Agency 2018: What is a max contract?
By Micah Wimmer
Ever tried to make sense of what it means when people talk about a max contract? Let Micah Wimmer explain the history and ramifications of it for you.
After many years of being chronically underpaid in light of his value, having won 4 MVPs and 4 NBA Championships in addition to a ton of other accolades, Michael Jordan ended his career with the Bulls by signing two massive one year deals in 1997 and 1998 worth over 30 and 33 million dollars respectively. Wary of the precedent Jordan’s payday set, and what this could mean for the rest of the league, the NBA instituted the maximum contract following Jordan’s deals during the 1998 lockout, and it has remained in place ever since.
Under the current Collective Bargaining Agreement, the maximum salary players can potentially earn is contingent upon both the current salary cap and their number of years in the league. For players with 0 to 6 years of experience, they are able to earn 25 percent of the cap, players with 7 to 9 can earn 30 percent, while players with 10 or more seasons played can earn 35 percent of the cap.
In addition to mere years of service, in several situations, there are a number of other requirements players must meet in order to garner a maximum salary. For example, the Designated Veteran Player Exception, better known as the Supermax contract, makes a player eligible to earn 30 to 35 percent of the cap. However not only must they be entering at least their 8th or 9th season in the NBA, they must have named All-NBA or Defensive Player of the Year in either the previous season or two of the last three, or MVP in any of the three years before signing. Also, the team offering such a deal must have either drafted the player themselves or traded for him while he was still on his rookie deal.
There has been some talk of removing the max contract, which LeBron James was rumored to have supported during the most recent CBA talks. It is a move that would make some sense considering the fact that it’s very arguable that the league’s biggest superstars are in fact underpaid considering the on and off court value they provide to their teams. Also, the removal of a max contract would likely help the league achieve a greater semblance of parity since, with the league’s biggest stars demanding more money than they are now, it would be harder for multiple stars to team up if they demanded more than 25 to 35 percent of the salary cap.
However, the maximum contract has been great for the NBA’s “middle class.” Since stars are only able to make a certain percentage of the salary cap, that frees up lots of money for non-stars who would earn much less if the NBA were a true open market. If the NBA ever does eliminate the maximum salary, it will come at a great cost to players who would have been unable to fetch a max contract in the first place as the money going to the stars will be coming out of their pockets, albeit indirectly.
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The maximum salary is a mixed blessing then for NBA players, giving an advantage to solid players while keeping the biggest stars from earning their true value. Sure, 35 percent of the cap is a lot, but what team would not eagerly give up half of its cap if it gave them LeBron James? Nevertheless, the max is here to stay, at least until the next CBA deliberations, and understanding it is a key to making sense of the upcoming whirlwind of free agency moves.