Chris Paul’s most remarkable win in Houston came in the form of a paycheck. He got his bag, but not his ring, and after being traded to the carcass of a contender that is Oklahoma City last week, he likely never will. After 14 seasons, Paul’s most enduring legacy may not be as the Point God, but as president of the National Basketball Players Association. In 2016, he took part in negotiations that added the designated veteran player provision—commonly called the supermax—to the NBA’s collective bargaining agreement. It changed free agency in ways neither party intended.
The provision, which allows teams to sign a qualifying player to a whopping 35 percent of the salary cap, was meant to do three things: help the best players get more money, give small-market teams a leg up on re-signing their superstars, and disincentivize the creation of superteams in the interest of parity. Three years later, only one of those goals panned out. The supermax is responsible for the two worst contracts (from a team perspective) in the NBA right now: John Wall’s four-year, $171 million deal, and Russell Westbrook’s five-year, $206.8 million deal.
Additionally, Paul helped negotiate for a change to the league’s over-36 rule (now the over-38 rule) that allowed him to sign a four-year, $159.7 million deal that looks like a supermax if you squint. Ever so coincidentally, that’s probably the third-worst contract in the NBA.
In addition to their direct deposits, Wall and Westbrook can be happy that they qualified for the supermax in the first place. Bradley Beal hasn’t been able to do it. Neither has Klay Thompson. To be eligible, a player must be on the team that owns their rookie contract rights, have completed eight years in the NBA by the end of their current contract, and have accomplished at least one of the following:
- Won MVP in any of the previous three seasons
- Won the Defensive Player of the Year award in the previous season, or won it both of the two seasons before that
- Made an All-NBA team—the first, second, or third team—in the previous season, or both of the two seasons before that
As a result, Wall and Westbrook—along with Stephen Curry, James Harden, and Damian Lillard—secured their bags. But in numerous other cases, the supermax isn’t having its intended effects. Several star players have switched teams despite the salary hit, and some teams have balked at giving their supermax-eligible stars a deal that would tie the franchise’s hands. “What they did—the way it was done—has had a really detrimental impact on small markets,” said an executive for a small-market team. “If [a player] makes third-team All-NBA, then they’re eligible for a supermax. Somebody who might be the 30th-best basketball player in the world gets voted into an All-NBA team by the media, and now the expectation is that you overpay this guy. It’s asinine.”
Small markets are already motivated to pay top dollar for players. If the money were the same, why would a star stay in Minnesota over, say, Miami? Surely the Wolves had their doubts about giving Andrew Wiggins a max rookie extension in 2017, but they did it anyway. Teams weigh their current players’ potential against the possibility of a superior talent coming along, and for small markets, that means almost always leaning on the former. The supermax exacerbates this gamble for small-market front offices because it puts more of their money on the table. The risk of losing a superstar has always been there; with the supermax, keeping him can be so costly that it becomes almost an equally unpalatable option.
Take Wall, who signed a four-year supermax extension two years ago. It’s finally kicking in this season, which he’ll miss most of while recovering from an Achilles tear he suffered in February. Washington probably can’t salvage its future by convincing another team to take on Wall. Having such a large contract renders him unmovable, which leads to another unintended consequence of the supermax. Beal, who has already usurped Wall as the Wizards’ centerpiece, is now the franchise’s only appealing trade asset.
For teams that have one player who accounts for roughly a $40 million cap hit, the franchise’s other star often becomes its only trade chip. The same was true with the Thunder when they dealt Paul George. Oklahoma City eventually did wash its hands of Westbrook’s contract, but in muddied water. They sent him to Houston and got Chris Paul in return, two nearly untradable contracts exchanged like bad white elephant gifts. (Harden and Westbrook are projected to account for roughly two-thirds of the Rockets’ cap space in 2020-21.) After signing Lillard to the supermax this summer, Portland could also experience second-star syndrome with CJ McCollum in a couple of years.
Of the five supermaxes signed to date, two have been rewarding—Harden’s and Curry’s—and the jury is still out on Lillard’s. Maybe that number would be higher if every eligible player took the extra money. Anthony Davis and Kawhi Leonard passed on potential supermax deals when they demanded trades. The bump matters less to the true 1 percent of the NBA than it does to a third-team All-NBAer who won’t profit as much from endorsements. Harden, for example, signed a 13-year, $200 million shoe deal with Adidas in 2015.
“The signature shoe guys that really matter in the shoe game can do whatever they want financially because they’re already set for the rest of their lives,” the front office executive said. “Our contracts don’t mean that much. You come to realize how insignificant you really are in the grand scheme of things when a dude who’s had an existing quad injury … would make the determination that it’s not that important to him to take all the money in the world off the table somewhere.”
George shared a similar (less graphic) sentiment last season. “When you’ve got guys that know their talent, know their skill set, and know what they’re capable of from a money standpoint, you can’t really entice somebody with a bag,” he told ESPN.
But just as players have bypassed their chance at a supermax, teams have as well. Charlotte reportedly declined to offer the option to Kemba Walker this summer, and Chicago and Sacramento dealt their eligible players, Jimmy Butler and DeMarcus Cousins, respectively, in 2017, passing on the chance to give those players supermax deals in the future. The Hornets have been heavily criticized for letting Walker go, but it is justifiable for a small market to not want to lock itself into a roster construction that has never made it out of the first round of the playoffs.
The most profitable teams—Golden State, for example—can better surround a star who carries that kind of cap hit because they’re more willing to pay the tax that comes with going over the limit. Franchises that don’t generate the same kind of revenue can’t afford to do the same. Walker was the only über-talented player Charlotte had seen in years. Yet he never pushed the needle enough to put the Hornets in contention. The front office couldn’t sign a playoff-caliber roster around Walker when he was making $12 million a year on his last contract—imagine how little it would have been able to do had the team committed more than a third of its cap space to one player.
The supermax is a symptom of a larger disease. Richer teams will always have an advantage when the punishment for overspending is a punitive tax. Addressing that calls for an action far more dramatic than the designated player provision; instituting a hard cap that enforces a spending limit could be a start.
A handful of the best players—the group the supermax was intended for—have already showed us that the extra money won’t sway them, while players who might not be worth the risk demand it. Per ESPN, some team officials want the requirements tightened, perhaps before their own third-team All-NBA player asks for $40 million, though there’s really no reason the players union would agree to such a restriction. Maybe the All-NBA qualification could be switched to a more objective metric that isn’t media-driven. There’s no obvious answer. A true fix is something even a super amount of money can’t buy.