Economic Impact of NBA Super Max Contracts
Over the past decade, news of hundreds of millions of dollars worth of contracts have stolen the spotlight on headlines. Following the 2025 NBA championship win by Oklahoma City Thunder, Shai Gilgeous-Alexander, Canadian superstar & point guard for OKC, signed a contract of $285 million for 4 years. Similarly, in 2024, after the Boston Celtics took down the Dallas Mavericks, star player Jayson Tatum signed the biggest NBA contract in history for $313 million for 5 years. Steph Curry, Jokic, Giannis, Joel Embiid, and Jaylen Brown - all of these incredible stars are on “Supermax Contracts,” making unimaginable amounts of money after reaching a certain threshold of achievement and years of performance. However, when a franchise spends a substantial amount of its salary cap - a limit each team has to spend on its roster - on one star, it is interesting to understand the effects on the rest of the economy, such as other roster spots, the average fan experience, and future trades/recruitment.
To take a deep dive into what these supermax deals actually mean, A Supermax contract, also known as “Designated Veteran Player Extension (DVPE)” was introduced to the league in 2017 as a tool for medium-sized franchise teams to keep homegrown players. To be eligible for this opportunity, a player must have either made the All-NBA Team or won the Defensive Player of the Year. They also have to be entering their 8th or 9th year in the league and have been drafted by the team or traded to it while still on their rookie deal. A non-eligible player can earn 30% of the salary cap with 5% yearly raises. However, if eligible, a team can offer the player 35% of the league’s salary cap with annual raises - more than any other team is allowed to offer.
On the surface, this sounds like a suitable solution for retaining huge talent. Teams like Milwaukee, Denver, and Oklahoma City don’t have the appeal of Los Angeles or Miami when it comes to attracting free agents, so the supermax gives them a financial advantage to keep their stars. Giannis stayed. Jokic stayed. Shai stayed. The argument here is simple: If the league wants balance, it has to give smaller markets tools to keep their talent, and the supermax does exactly this - allowing smaller teams the ability to retain top talent by giving them the financial arsenal that no other NBA team is allowed to provide.
But that’s only part of the story. While teams are locking down their stars, they’re also locking themselves into long-term financial pressure. If one player is earning $50 or $60 million per year, that means over a third of the team's total payroll is utilized. The rest of the roster has to be built with far less financial flexibility. Teams in this situation can’t afford to miss draft picks or overpay role players, because every mistake gets magnified. The Boston Celtics, for example, have both Jayson Tatum and Jaylen Brown on supermax contracts. In 2025, their combined salaries are pushing the team into the league’s second tax apron, which comes with penalties that limit trades and signings. This ultimately forces teams into win-now mode, whether they’re ready or not.
It is also important to underline the unintended consequences for the rest of the league. When a star gets a supermax, it resets the entire salary market. Role players who aren’t eligible to be all-stars due to their performance, expect salaries in the $20 to $30 million dollar range because that’s the average price in a league where the best players make $60 million. This makes it harder for role players to find an appropriate contract or team, and it inflates expectations on players’ values. Not every player who makes All-NBA is a generational cornerstone, but supermax rules evoke this idea. That puts pressure on franchises to offer inflated contracts that they may later regret. For example, John Wall and Bradley Beal, two very big prospects for the Washington Wizards that ended up hurting the Wizards’ flexibility. It’s a high-stakes and risky decision - once the contract is signed, there is no turning back.
It is interesting to look at the Supermax contract solutions from the fans’ perspective. A star signing a long-term deal can be an emotional rollercoaster for fans - it might lead to a thrilling championship run, or just as easily be derailed by injury or a sudden trade request that crushes any hope for success. James Harden, currently a PG for the LA Clippers, signed a supermax contract in 2017 that locked in a deal through the 2023 season, but then forced a trade in 2021. Damian Lillard remained committed to Portland for years, signing a four-year, $196 million super-max extension to stay with the franchise, but ultimately requested a move when the team could no longer contend at a high level. The supermax might keep players from shifting towards free agency, but it doesn’t guarantee long-term loyalty. Fans buy jerseys, become emotionally invested in their teams, and get sold on the “face of the franchise” only to see that star move the moment things go south. The intention was to stop the formation of superteams and constant movement - but ironically, these contracts can delay the inevitable while tying a team’s hands.
Of course, there are valid counterpoints. One argument is that every contract comes with risk, and supermaxes are just part of doing business in a growing league. As revenues increase, so do player salaries. Some would argue that stars deserve their high salaries - they’re the reason arenas sell out, fans tune in, and billions of dollars in merchandise are sold globally. Why shouldn’t a player like Nikola Jokic or Giannis Antetokounmpo be paid 35% of the cap when they’re producing MVP seasons and carrying their teams to championships? The NBA is star-driven, and without elite players, most franchises can’t survive. Some people may even say that super max deals are not paying the most valuable players enough, given how much they generate for the league.
However, it is still the case that not every supermax deal ends in a parade. For every Nikola Jokic or Steph Curry who delivers titles on their contract, there are examples where teams get stuck: not bad enough to rebuild, not good enough to contend. The NBA ends up with a few dominant teams and a middle tier of franchises that are not able to break through. That's not a problem the supermax fixed - it might’ve made it worse.
In conclusion, supermax contracts have reshaped the finances of the NBA. They’ve given teams in smaller markets a fighting chance to retain their stars and build around them, and in the best cases, they’ve helped deliver championships. But they’ve also created new financial challenges, warped the salary market, and raised questions about player movement and team-building. The thesis here is simple: The supermax is a tool - it’s not good or bad in itself, but how it's used determines whether it is beneficial or harmful to a team’s long-term future. NBA franchises must be smarter, not just richer, and fans must adjust their expectations for what “loyalty” and “value” look like in the modern league's economy. As contracts get more expensive, the margin for error gets smaller - and everyone, from General Managers and fans to the players themselves, has to play the financial game just as carefully as the game on the court.
Works Cited:
Baucom, Sheri. “Using Data Integration and Advanced Modeling to Determine Active External Corrosion.” Supermax Contract NBA Explained: How It Impacts Teams and Player Careers - French League 1 Live - France Ligue 1 Matches Today, Irth Solutions, 8 Sept. 2025,www.franceligue1matchestoday.com/french-league-1-live/supermax-contract-nba-explained-how-it-impacts-teams-and-player-careers-650081.html. Accessed 13 Nov. 2025.
“Sources: Celtics’ Jayson Tatum Agrees to 5-Year, $314M Deal - ESPN.” ESPN.com, ESPN, July 2024, www.espn.com/nba/story/_/id/40476501/sources-celtics-jayson-tatum-agrees-5-year-314m-extension#. Accessed 13 Nov. 2025.
From. “Shai Gilgeous-Alexander Signs Reported 4-Year, $285 Million Extension with Thunder.” NBA, NBA.com, July 2025, www.nba.com/news/shai-gilgeous-alexander-contract-extension-2025#. Accessed 13 Nov. 2025.
Baucom, Sheri. “Using Data Integration and Advanced Modeling to Determine Active External Corrosion.” Supermax Contract NBA Explained: How It Impacts Teams and Player Careers - French League 1 Live - France Ligue 1 Matches Today, Irth Solutions, 8 Sept. 2025,www.franceligue1matchestoday.com/french-league-1-live/supermax-contract-nba-explained-how-it-impacts-teams-and-player-careers-650081.html.
Lowe, Zach. “The NBA Supermax and the Price of Loyalty - ESPN.” ESPN.com, ESPN, 27 July 2018, www.espn.com/nba/story/_/id/24191536/zach-lowe-jimmy-butler-blake-griffin-nba-supermax#. Accessed 13 Nov. 2025.