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NBA Max Contracts, Rookie Wages, & Free Agency

NBA Max Contracts, Rookie Wages, & Free Agency

With the NBA Offseason rumor mill now full steam ahead, we'll take a moment to dive into the nuts and bolts of maximum contracts, which love them or hate them, continue to drive the league forward on an annual basis. There are just a few things to consider when considering a player at a maximum compensation level.

 

Years of Experience

First year salaries for maximum contracts are based on tiers of years of experience (0-6, 7-9, and 10+).

  • 0-6 years of experience would qualify for 25% of the cap, 
  • 7-9 years of experience would qualify for 30% of the cap, 
  • 10+ years of experience would qualify for 35% of the cap

 

Contract Length & Salary Increases

The length of a maximum contract varies based on whether the player is re-signing with his current team, or signing a new contract elsewhere. Players re-signing with their current team can lock in a maximum contract of 5 years. A contract with a new team can only be a maximum of 4 years.

While the first year salary of a maximum contract is based on the slotted percentage of the league cap, the additional salaries are calculated based on a percent increase. Players re-signing with their current team have salary increases of 8% built in to the contract, while those signing to a new team receive only 5% increases.

 

Maximum Contract Breakdowns

All figures based on a $109M salary cap

New Team Current Team
YOE: 0-6SalaryTotal YOE: 0-6SalaryTotal
1 $27,250,000 $27,250,000   1 $27,250,000 $27,250,000
2 $28,612,500 $55,862,500   2 $29,430,000 $56,680,000
3 $29,975,000 $85,837,500   3 $31,610,000 $88,290,000
4 $31,337,500 $117,175,000   4 $33,790,000 $122,080,000
        5 $35,970,000 $158,050,000
             
YOE: 7-9SalaryTotal YOE: 7-9SalaryTotal
1 $32,700,000 $32,700,000   1 $32,700,000 $32,700,000
2 $34,335,000 $67,035,000   2 $35,316,000 $68,016,000
3 $35,970,000 $103,005,000   3 $37,932,000 $105,948,000
4 $37,605,000 $140,610,000   4 $40,548,000 $146,496,000
        5 $43,164,000 $189,660,000
             
YOE: 10+SalaryTotal YOE: 10+SalaryTotal
1 $38,150,000 $38,150,000   1 $38,150,000 $38,150,000
2 $40,057,500 $78,207,500   2 $41,202,000 $79,352,000
3 $41,965,000 $120,172,500   3 $44,254,000 $123,606,000
4 $43,872,500 $164,045,000   4 $47,306,000 $170,912,000
        5 $50,358,000 $221,270,000
*based on a $109M league cap

 

SuperMax Contracts

SuperMax contracts were built in to allow younger players who are producing at an elite level the opportunity to jump up a maximum contract tier, despite their lack of accrued years.

In other words, it allows players with at least 4 years of experience to jump up from the 25% pay scale, to the 30%, or players with 8-9 years of experience to jump up from 30% to 35%. Here are the rules to qualify for the SuperMax:

  • The player was named to the All-NBA First, Second or Third team in the most recent season, or both of the two seasons that preceded the most recent season.
  • The player was named the Defensive Player of the Year in the most recent season, or both of the two seasons that preceded the most recent season.
  • The player was named the NBA Most Valuable Player in any of the three most recent seasons.

 

The 1+1 Contract

One of the more recent trends that LeBron James & Kevin Durant have started is to sign a 1 year contract that includes a player option for a 2nd season, commonly known as a 1+1 deal. This allows players the ability to make a lot of money (generally the max) in the first year, then complete control of their immediate future. As the league salary cap has continued to rise at a big clip ($10M annual), players have opted out of their 2nd year in order to sign a new contract based on the increased league cap figure.

However in the case of the now injured Kevin Durant in 2018-19, locking in the player option for 2019-20 was certainly to his benefit. Before the injury, it was a near certainty that Durant would opt-out of his current deal and explore the open market seeking a new maximum contract. Now injured, Durant holds control over how his next calendar year will play out.

 

Notable 2019 Free Agent Max. Contracts

It's important to note that these are just the maximum terms that are available. Players may choose to sign contracts shorter in length, and in the cases of players with 8 years of experience, will likely do so to allow themselves the chance to cash in at the 10 YOE level.

PlayerPosTeamStatusYOEMax 2019-20 SalaryCurrent Team Max ContractNew Team Max Contract
Kevin Durant SF GSW Player Option 12 $38,150,000 5 years, $221M 4 years, $164M
Kawhi Leonard SF TOR Player Option 8 $32,700,000 5 years, $190M 4 years, $140M
Jimmy Butler SG PHI UFA 8 $32,700,000 5 years, $190M 4 years, $140M
Klay Thompson SG GSW UFA 8 $32,700,000 5 years, $190M 4 years, $140M
Kyrie Irving PG BOS UFA 8 $32,700,000 5 years, $190M 4 years, $140M
Kemba Walker PG CHA UFA 8 $38,150,000 (TOR)
$32,700,000 (New)
5 years, $221M 4 years, $140M
Tobias Harris SF PHI UFA 8 $32,700,000 5 years, $190M 4 years, $140M
Khris Middleton SF MIL UFA 7 $32,700,000 5 years, $190M 4 years, $140M
D'Angelo Russell PG BKN RFA 4 $27,250,000 5 years, $158M 4 years, $117M
Kristaps Porzingis PF DAL RFA 3 $27,250,000 5 years, $158M 4 years, $117M

 

Drafted Rookie Contracts

The starting point for the NBA rookie wage scale was created in the current CBA for the 2017-18 season. From there, rookie wages have increased based on the percent increase of the league salary cap. That slotted figure is the "middle" point that a team can sign their rookie to, as every first round pick's salary can be as little as 80% of the slotted price, or up to 120% of that figure. Generally speaking, most high first rounders receive the full 120% value.

Rookie contracts are designed as 2 year deals, with club options in year 3 and year 4, & and qualifying offer (or restricted tender) available in year 5.

Players are available for an extension following the 3rd accrued season of their rookie contract, just like in the NFL. Here's how the 2 year contracts & projected 2019-20 cap figures look for the first 5 draft picks.

PickTeamYearsDollars2019 Cap Hit
1 NOP 2 $19,976,760 $9,744,720
2 MEM 2 $17,874,000 $8,718,960
3 NYK 2 $16,050,840 $7,829,640
4 LAL (NOP) 2 $14,471,400 $7,059,360
5 CLE 2 $13,104,480 $6,392,400