There may not be a more controversial moment in recent NBA history than LeBron James’ decision to leave his hometown Cleveland Cavaliers. The King’s highly publicized 2010 free agency was scrutinized to a degree that has not been seen again since Kevin Durant’s free agency in 2016. It became a media spectacle, with James’ agreeing to take part in an ESPN special called “The Decision” in which he announced his decision to sign with the Miami Heat. It was a perfect illustration of everything free agency was capable of being from a media perspective. While some might have ultimately disagreed with James’ decision to relocate to South Beach and the way he went about announcing it, it brought attention to the league and shifted the balance of power among NBA teams in an incredibly consequential way, as the Heat went on to win two championships.
While it was much less of a media exhibition, history more or less repeated itself in 2016 when former league MVP Kevin Durant left the Oklahoma City Thunder to play with the championship-tested Golden State Warriors and reigning league MVP Stephen Curry. Once again, a big-name superstar hit free agency and it was the only thing on the collective minds of NBA fans and pundits alike for weeks. The will-he-or-won’t-he stay affair was dramatic and encapsulating. Many disagreed with Durant’s decision, much like James’, calling him soft and disloyal to the franchise that enabled him to be successful. But as the famous inventor, Phineas T. Barnum once said, “there’s no such thing as bad publicity.”
The common thread of these two situations is that in both cases, an elite NBA talent left the smaller market that drafted them in favor of a big market that would provide them with more media coverage and opportunities to win at a high level. The NBA began to recognize that this was emblematic of a larger problem in which small markets could not retain talent long term because stars could get paid the same amount of money by better teams. In an attempt to remedy this, the NBA introduced the supermax contract in 2017, permanently altering the landscape of the league
“Added to the collective bargaining agreement between the NBA and players union in 2017, the supermax was designed to give teams a way to offer their stars significantly more money than other teams. The supermax allows players entering their seventh, eighth, or ninth seasons to sign new contracts or extensions worth 35% of the salary cap, with 8% annual raises each season. To be eligible, they have to have recently won MVP, Defensive Player of the Year or made an All-NBA team.”
Another important detail regarding the supermax contract missing from this description is that it can be only offered by a team that drafted a player or traded for their rookie contract. This finally gave small-market NBA teams a path to retaining the services of homegrown superstars because they can offer them substantially more money than any other team. Players also cannot be traded for the first year of their supermax deal, which provides players some additional security.
This deal worked exactly as intended for a few small-market teams. Most prominently, Damian Lillard and Giannis Antetokounmpo both signed the deal to stay in Portland and Milwaukee respectively. However, there have been other circumstances where teams signing players to the supermax became a burden later on. John Wall and Russell Westbrook both signed the supermax and have become incredibly difficult to trade because of it. Both signed the deals in their late 20s and have not lived up to their salary as they have aged and declined. With players like Rudy Gobert, the supermax might make them hard to move if the Utah Jazz want to trade him in the future. There is an odd caliber of player who is good enough to sign a supermax contract in a market desperate to keep talent, but not very good relative to other players who have signed the supermax. Gobert is one such player.
Even in the case of James Harden, who demanded a trade from the Houston Rockets last season when he was still performing at a high level, his large individual salary made crafting a trade package difficult for the Brooklyn Nets. It ultimately resulted in them parting with valuable assets like draft picks and Caris LeVert. Making such a large investment in one individual player is a huge risk for teams because things like injuries and trade demands can cause them to lose value in the eyes of other teams, making them very difficult to move given their large salaries.
Going forward, because of the high degree of guaranteed money in these deals, more and more players are going to sign the supermax as they become eligible. This will cause them to remain in smaller markets, at least temporarily. True superstars will rarely enter free agency, rather, they will just be traded to a team willing to give up enough assets to take on a supermax contract. As a new generation of stars like Antetokounmpo, Luka Doncic, Jayson Tatum and soon Zion Williamson sign large deals, it will be interesting to see how the situation plays out if one of them becomes unhappy with their situation. The system will likely continue this way, with few superstars hitting free agency until the CBA expires in 2023-2024.
The supermax contract has definitely served at least a somewhat beneficial purpose in making it easier for small-market teams to retain superstar caliber players, but it has had the unintended consequence of making superstar free agency a memory of the past. It is obviously unreasonable to tweak the system fundamentally and expect to get it right on the first try, but the league is better when there is more parity in player mobility, and the supermax is working against the preexisting paradigm. Here’s to hoping the Adam Silver and company have some bright ideas.
All stats courtesy of ESPN and Basketball-Reference
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