Sharp: NBA “Supermax” Contract Experiment is Failing

The NBA Supermax Contract system is failing hard, according to Andrew Sharp, writing for Sports Illustrated. The provision, enacted in the Summer of 2016 after Kevin Durant left the Oklahoma City Thunder to join the Golden State Warriors, allowed incumbent teams to compensate designated players (who meet certain league-wide awards criteria) with longer deals and a larger percentage of their salary cap than other teams can offer. This opened the door for enormous contracts, approaching $50 million per season. Not only are those offers failing to sway superstars, Sharp argues they threaten to create a class of overpaid, not-quite-stars whose salaries will hamstring their teams for years to come.

Sharp begins by citing Paul George, Gordon Hayward, Jimmy Butler, and DeMarcus Cousins as examples of stars who either weren’t Supermax-eligible or weren’t offered the maximum possible contract by their incumbent teams, leading to their departure. Then he brings out the big guns of Kawhi Leonard, who left the San Antonio Spurs with a Supermax offer on the table, and Anthony Davis, who presumably would reject one from the New Orleans Pelicans. Sharps uses these examples to assert that if Supermax deals are designed to give teams an advantage in keeping their All-Star or MVP-Level players, it isn’t working.

Sharp argues the more fatal flaw may be the hidden one: great players on otherwise-nondescript teams who deserve Supermax money but would almost certainly doom their franchise to mediocrity while taking it.

He brings up Charlotte Hornets guard Kemba Walker:

If Charlotte makes the playoffs this year, it will probably be enough to earn Kemba the All-NBA nod. But then, if the Hornets have to pay $200 million for the right to keep Kemba until he’s 34 years old, that handicaps their ability to give him any hope of contending through the duration.

Then he goes for the jugular in the form of Washington Wizards guard Bradley Beal:

Beal looks like a star. Now, though, the story gets tricky. If Beal makes an All-NBA team, the Wizards are unlikely to offer him a supermax deal. They already have $200 million committed to [John] Wall in what’s arguably the worst contract in basketball; compounding the Wall decision with another $200 million investment in a team with no title hopes seems untenable. But if refusing to offer Beal that deal ultimately poisons Washington’s relationship with the best player on the team, the Wizards will essentially be punished for refusing to tank and allowing Beal to continue dominating through the final few months of the season.

After drawing the following conclusion...

Teams are forced to spend huge amounts of money on stars who are unlikely to reward the investment with proportional production on the court, while players who sign the deals are suddenly marooned on teams that don’t have the money or flexibility to pay for contender-quality sidekicks.

...Sharp invokes Portland Trail Blazers guard Damian Lillard as another potential example. Lillard’s contract expires in 2021, but extension talks could begin as early as this summer.

The article is well worth a read, for the examples cited and the Law of Unintended Consequences threatening to overtake the system.