Definition of Supermax Contract

What does the term "supermax contract" mean when it comes to the NBA? What does the term "supermax contract" mean?

A "supermax contract" refers to the contracts that can be doled out to those lucky NBA players who qualify for the Designated Veteran Player Extension (DVPE).

In order to qualify for a "supermax contract", players must have seven or eight years of service in the league and still be with their original teams, unless they were traded (James Harden) or acquired by assignment via amnesty waiver.

In addition, players must distinguish themselves as top tier talent through one of the following three ways:

1) Named to All-NBA first, second or third team in immediately preceding season or in two of last three years
2) Named Defensive Player of the Year in immediately preceding season or in two of last three years
3) Named NBA NVP during one of last three seasons

If players fit all of these criteria, they qualify for a "supermax" extension.





The Designated Veteran Player Extension allows players to add five more years to their existing contracts if they have one year left on their current deals and four new years if they have two years left on their deals.

Teams are able to pay out 35% of their salary caps to players who qualify for a "supermax contract". The 35% is calculated based on what the salary cap is projected to be in the first year of the "supermax" extension.

For instance, a player who has a "supermax" extension that kicks in during the 2019-20 season will be eligible for a maximum salary of $37,800,000 in 2019-20 (35% of the projected $108 million salary cap).

In addition, these players are entitled to annual 8% increases in their salaries due to the fact that they are "Bird" players (players with "Bird rights").

So, James Harden, for instance, has a "supermax contract" that looks like this:

$28,299,399, 2017-18
$30,421,854, 2018-19

Extension Kicks In

$37,800,000, 2019-20
$40,824,000, 2020-21
$43,848,000, 2021-22
$46,872,000, 2022-23

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Damian Lillard of the Portland Trailblazers recently signed a supermax extension that adds four years to the existing two years that are left on his contract.

For the existing two years that are left on his deal, Lillard will receive:

2019-20 - $29,802,321
2020-21 - $31,626,953

The "supermax" extension will look like this:

2021-22 - $42.6 million
2022-23 - $46.0 million
2023-24 - $49.4 million
2024-25 - $52.8 million

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