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The Supermax Contract Conundrum




Is it possible to have too much of a good thing?


Oh yes, it's quite possible. As human beings, we are made well aware of this fact early on in life. During our childhood years, we acquire a craving for unhealthy, yet abundantly enjoyable substances like chocolate, peanut butter, caramel, and the like. When we're feeling ambitious, we even go as far as to include all of these ingredients into a formation of incredible proportions. Eventually, the Ice Cream Sundae is born and our world is never the same again.


The trivial nature of this quick example is not lost on me. So let us consider another relevant case.


You know these ultra-powerful tools we call cellphones that almost never leave our sight? They have ushered in a new age of innovation ability. It is truly a marvel of modern engineering that we can gather almost any tidbit of information we would ever want, or need. On top of that, we can also be entertained for hours on end with an endless stream of clever content waiting for us after every swipe.


However, at some point, all of the convenient blessings of these pleasures transform into crippling curses.


The consequences seem pretty minor, right? In our younger years, we undoubtedly consumed too much ice cream, chocolate, or some other sweet edible within a particular time frame and it made us slightly ill. By the same token, people of all ages, particularly adults, have trouble staying off of mobile devices which leads to some...interesting problems. The negative outcomes range from having your phone confiscated for a few weeks, to falling down a slight of stair in public for failing to keep an eye on where you're walking. Shameful, but generally harmless.


But as we all know, the implications of overdoing anything in the NBA can be life changing. We're talking about millions of dollars here. Millions. Money partially dictates where players decide to life their lives, what they invest in, and more. To a lesser extent, this is the effect money has on the general public. If we work somewhere for five, ten, even twenty years, the odds of us leaving that position for another that offers a pay raise are quite high.


Professional sports operate in a similar, yet somewhat different fashion. We have some of the best athletes on earth employed by the 30 teams of the associating putting in serious work for their clubs. Like us, they are looking for pay raises. The difference here though is they would have to stay put to get their maximum raise instead of leaving town. Some of the very best of this class -- the one percent of the one percent, are so valuable to their parent teams that their true value is hard to assess. How much additional revenue does Davis bring to the Pelicans? How about Harden to the Rockets? Or Curry with Golden State? Tough to know for sure. What is abundantly clear however, is these players who double as faces of the league in addition to their own teams are worth more than what the normal maximum contract allows team to pay them.


That brings us to the issue at hand. The "Supermax" contract was brought in to give teams who draft special players an extra tool to help retain those players as long as possible. The glitz and glamour of L.A. or New York shine bright and serve as a draw to those who might be looking for more recognition or opportunities (See - James, LeBron)


In certain cases, it serves it's purpose beautifully. On July 8, 2017, the Rockets retained James Harden by signing him to a massive 4 year/$169 million Designated Player Veteran extension that would keep him in Houston through 2023. That's a mouthful, so most just refer to it as the Supermax. What we might forget is that Harden is actually still under his old deal since the extension was just added to his current deal signed in 2012 instead of replacing it. If you're keeping track, that means his extension will officially kick in next season and he will enjoy a legitimate pay bump of just under $8 million.


If only every case were this cut and dry. The beard is coming off of one of the most prolific regular seasons in history. 36 points per game on 61% true shooting is rather spectacular by any measure. Of course he's worth $30+ million per season. If a firm maximum figure wasn't in place, he would probably demand even more.


This purpose of this post is not to study the handful of players who are worth a supermax. If you've ever watched any of the names mentioned thus far, it's pretty obvious why that's the case. The mission here is to look at some names who might be on the fence and how their recent addition to the supermax eligibility list has exposed some of the flaws of this unique distinction. Let us first give the NBA a pat on the back for a few things they've nailed here.




Media (Voting) Circus



NBA Commissioner Adam Silver recently spoke on the Posted Up Podcast with Chris Haynes about this very topic. One very good point he made had to do with the voting committee for the All-NBA awards. There are some skeptics that believe the media should not the group in charge of voting players onto such meaningful award ballots. Upon initial examination, it's easy to see why putting literally millions of dollars in the hands of those who merely write about the league, as opposed to play or coach it. They're not down in the trenches day in and day out with these players they're voting for, so what makes them qualified to have such power?


Well for one, the media covers the game at an extremely high level. They know what they're talking about. Believe it or not, you can become very well-versed in the game after thousands of hours watching film and speaking to those who know the game best. That's starting to crossover into a whole other issue that's been a hot topic in the community lately, and that is another conversation for another day.


Anyways, Silver's reasoning behind having media members vote instead a short list of executives or some other small group was on point.


Take a listen:





In this clip, Silver outlines the reasons behind the media serving as the voting committee. This is a classic case of sample size theatre. Some of the brightest minds in basketball have conducted very advanced studies on how long it takes for shooting percentages and other key statistics to stabilize in a NBA season. Krishna Narsu from Nylon Calculus dropped this piece in 2017 that is still incredibly relevant a couple years later. It's quite good, so you should give it a read.


Long story short, it takes anywhere from five to 30 games for key statistics to become trustworthy. Meaning, we can expect them to hold fairly steady as the NBA calendar continues to move along. After adding up all of the averages NC came up with for all of the metrics they examined, I arrived at a admittedly general and broad number of 14.2.


It's hard to pull any sort of reliable conclusions from small samples. There is an exorbitant amount of noise in a player or team shooting 90 percent from three in two games. Unless they're a god disguised as a mortal being, it is sure to regress in the following games.


So what does all that have to do with the NBA award voting committee? Well, you heard it in that short snippet from the Commissioner himself. If they relied on a super exclusive group like General Managers or other league higher-ups to have the final word on these awards, they would be looking at a sample size of 30 individuals, or less. There is more likely to be differing opinions in a group that small and you risk having players who are not the most deserving grabbing a spot with someone else's name on it. Can you imagine the uproar that would ensue if Westbrook made 1st team All-NBA over Curry? Yeesh, that wouldn't go over well.


It's also better have the media vote over players. Many people (mainly players lol) have advocated for players to be the ones voting here. Well, that's not necessarily the best course of action, either. Players view each other in a very positive light, especially ones they have a close relationship with. We would be dealing with a slight bias problem there.



Based on what we know so far and the results of the voting this season, this is something that the league has gotten right so far. What about the specific criteria? Are All-NBA teams 1-3, Defensive Player of the Year and MVP difficult enough to earn so that fringe stars aren't becoming eligible?


If the 2018-19 voting results are any indication, we might need to up the ante a bit. Kemba Walker and Rudy Gobert made the ballot, but with significantly less votes than anyone else on even the 3rd team. They will be the main cases of study here, because they have been linked to a supermax in the near future and there has been a small uproar on whether they are worth it or not. Here are the final results...




As you can see, these two made the squad, but barely. Kemba in particular only got 43 votes for any of the three teams, which means 57 voters didn't think he deserved making All-NBA at all. Those two names are probably some of the only ones that we would be hesitant to say will appear on this list every year. Gobert is more of a sure thing than Kemba, but he will be competing against Embiid, Jokic, and KAT for one of three spots for a long time, so he very well could get knocked off in the next year or two.


There have been several players in the past 10 years or so that made All-NBA, but it ended up being basically a one-off. I mean, Andrew Bogut made the third team in the '09-'10 season soooo it can definitely be done once or twice by non-elite players. We might have to change the standards here, but more on that in a bit.


It may seem as though I am taking shots at these players, but that couldn't be farther from the truth. They are entirely deserving of these awards. I would have voted for Kemba if I could.


It just creates a difficult situation when these are the same players becoming eligible for enormous, cap killing deals. It threatens to jam Charlotte and Utah between a rock and a hard place pretty soon.




Fight or Flight



Let's begin with the Hornets situation. Kemba Walker is now a Designated Veteran, which unlocks the power to sign a five year deal worth up to $221 million. Ok, let's just take a deep breath for a second, cause that's boatload of cash. We're talking almost a quarter billion dollars. Billion with a 'B'. The first year, '19-'20 would start at an eye watering $38 million. Now the Charlotte is left to ponder the value of such a contract. He is among the very best at his position, but he has clear flaws that would be exploited in a playoff setting, if they even made it that far. It wouldn't be easy to build a true-contender around him, even without accounting for the cost involved. Walker is obviously leveling up with that payday, but what about the team overall?


Charlotte's roster is suboptimal when it comes to talent level. It's been that way for awhile now since former #2 overall pick Michael Kidd-Gilchrist didn't live up to expectations and Batum hasn't been the same since Portland. This Summer, they will have a maximum of $8.2 million of cap space before accounting for Kemba's likely deal and the MKG $13 million player option he has yet to pick up. (Cap figures acquired from Jeff Siegel on Early Bird Rights.) The pick coming their way is only 12th since they narrowly missed the playoffs this season, so that probably won't help much either. They basically won't have usable space until next year. At that point, Kemba will be earning over $40 million, which is more than a third of the cap.


What about Gobert? Here is the situation on that front.





The Jazz will soon face the same questions that are probably keeping Buzz City up at night. Is a defensive minded center with no shooting ability really worth $247 million? To make matters worse, next Summer is also when Donovan Mitchell becomes extension eligible. Good luck with that one guys.


Could this supermax which was created to help teams hold onto homegrown talents having the opposite effect? Paul George wanted out of Indy and no amount of money was going to change that. Unless the Brow has a massive change of heart, he's a goner too and his team just struck gold with the #1 pick in this draft! Kawhi Leonard is playing for one of the best fanbases in the league and they can offer him more money than Doc Rivers could even dream of throwing his way and he still might bolt for Hollywood next month. What does that tell us about the nature of the supermax?


It could be backfiring.


If teams have to devote 35-40% of their overall cap figures to one guy, how much wiggle room does that leave for other supplemental pieces? These restrictions could lead to incredibly top heavy rosters and that creates a hamster wheel effect where stars grow discontent with a lack of playoff success.


"You gotta pay these dudes! They deserve every penny of what's coming!" Your arguments are noted. Maybe they are worth the money just because of what they mean to their cities. They are fan favorites. They are bigger than basketball. Fine. Cool. I hear ya. But there is another issue here might be getting overlooked. Let's go back to Mr. Silver for a second for more on this.





Another excellent point by the man in charge. During the 2017 CBA discussions, the players successfully bargained for a greater share of league revenue. They now enjoy a 50/50 split with the owners (give or take one percent), but that still limits how much the players can earn as a whole. (1)


While it is fair for the very best in the sport to get more money than those who aren't there still as to be somewhat of a balance here. Money obviously isn't having the intended effect in every instance. Kawhi is a robot and can't be brought out with your weak bribes. If your team sucks, stars will skip town just about every time. How much is too much money for the big dogs?


Just something to think about.



Possible Remedies



The Negative Nancy act has to stop at some point right? Time to get on with some solutions.


Twitter came through with this first potential solution. Could it really work in practice?















Interesting. If all of the components of this proposal are broken apart and separated for clarity, this is what has to be rearranged:


  • The "regular" maximum contract - 5 years, $190 million

  • The additional money added by the hypothetical supermax contract - $31 million over the lifetime of the deal, or an average of just more than $5 million per season


That means that according to the team's books Kemba's salary would start at ~ $33 million next season and he would get less than $40 million the following season. Still a lot, but that few million takes the edge off, no doubt.


If this change became official, Charlotte would not be on the hook for as much money, but they will still be operating far above the tax next season. In the short term, all this change would do is reduce Charlotte's odds of paying the luxury tax. They will be up against the tax again, so every dollar they can shed would help.


But just to play devil's advocate again for a moment...how much would a few million change per season? Most teams that have a player of Kemba's caliber are in win now mode, so they are naturally less risk averse and less inclined to save money, because they want to build the most complete roster possible.


Who wants to get a letter together for the league office to see? Couldn't hurt.



One last point here. Just a bit earlier in the piece, another solution was to eliminate All-NBA 3rd team from the list of qualifications. It is a change that I myself tweeted not too long ago.



As explained in my thoughts here, narrowing down the requirements would make the class even more exclusive and ensure that only top ten players like Giannis and Davis can grab that money. That way, small markets like Utah and Charlotte aren't stuck paying tier 2 players more than they might be worth.




This is all just speculative though. Charlotte has not offered the supermax of this writing and no changes to the eligibility formula are seriously being considered by the league.


But that's where the fun lies, right? We enjoy the benefits of a beyond wonderful league that continues to capture the hearts and minds of fans all over the whole. It's ok to throw out some constructive criticism and troubleshoot pressing matters.




To bring it full-circle, the players are all of us as children and the money are millions of ice cream sundaes. It doesn't make sense to get too much of it, lest we suffer the consequences later.




(1) I would like to cover the owners/players league revenue split in more detail, but that goes a bit beyond the scope of this post. However, I will make a dedicated CBA breakdown post about it soon, so stay tuned.





















 
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