How Many Max Contracts Should The NBA Have Each Year?

Forbes

a day ago

As frequent readers of my work are well aware, the financial side of the game is nearly as important as the actual product on the court. Time and time again, we see that the best teams are those that get the best value for their investment.
Recently, in an article focused on examining De'Aaron Fox's new extension, I discussed the 'Flawed Star' dilemma that is killing teams around the league. By my definition, a flawed star is a player who is being paid maximum-level money but doesn't necessarily produce at that level.
This got me thinking: How many players truly deserve a max contract?
Our Methodology
For this exercise, we are going to reverse engineer the formula I normally use to estimate a player's yearly monetary value (production*value of a win = estimated production value).
First, we will take the maximum salary cap each team is allotted in a given season. For example, in 2024-25, that number was 140.6 million. Then, we divide that number by 41 (since the average team would theoretically go 41-41 in a given season). From there, quick math tells us that a win was worth 3.4 million dollars that season.
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After that, we take the 30% max salary for that season (42.2 million in 2024-25) and divide it by 3.4, which gives us 12.4. So, to be 'worth' a max contract in 2024-25, you need to provide your team with at least 12.4 wins.
According to the website Dunks & Threes, seven players eclipsed that threshold in 2024-25, yet 24 players were paid at least 30% of their team's salary cap. We then rinsed and repeated this arithmetic for every season all the way back to 2012-13 (Spotrac's leaguewide salary data only goes back to 2011-12, and that season was a lockout, so we cut our analysis off at 2012-13 to keep things nice and clean).
What We Found
Now, without further ado, here is what we found:
There are two interesting epochs at play here. From 2019 to 2025, we had an average of 17.7 players per year being paid max contracts, despite only 7.7 players providing enough value to warrant that type of payment.
Juxtapose this with the data we gathered from 2012 to 2019, and during that period, only eight players per year were earning max money. However, based on our equation, 14.3 players deserved to be paid the highest dollar amount teams can offer.
Right now, the league has something of a salary cap epidemic – there are more max contracts out there than there are max players; hence, the emergence of the flawed star category that gave rise to this entire article in the first place.
But it wasn't always like this. For most of the 2010s, there weren't enough max contracts for the number of max players in the league. So, what's going on?
The league's tendency to over-index on precedent has led to the current financial conundrum we are seeing teams face today. In negotiations, a player can cite a past player of similar caliber getting a max contract and demand that they receive the same. It doesn't matter that said player wasn't qualified for this illustrious designation. The fact that they got it is convincing enough.
In the future, a smart team would be wise to reject the status quo and not automatically give a very good player a contract they can't meet the expectations of simply because that is the perceived going rate of a player in today's financial landscape.
Not only are there more max contracts out there than there were a half decade ago, but there are also fewer max-level performers. What's causing this?
Unfortunately, I don't have as firm an answer to this riddle. My guess is it is some combination of an increase in load management causing players to miss more games/play fewer minutes (remember, contracts are handed out for regular season production, not the playoffs) and the growing injury crisis many fear is taking shape. Examining this subject matter further would be a great follow-up to this article.
In any event, one thing is clear after this experiment: there are too many max contracts circulating around the NBA world right now, and teams need to tighten up their spending.