Hoops Rumors Glossary: Designated Veteran Contract

The NBA’s maximum salary is determined by a player’s years of NBA experience. Players with between zero and six seasons under their belts are eligible for a starting salary worth up to 25% of the salary cap. That figures increases to 30% for players with seven to nine years of NBA experience, and to 35% for players with 10+ years of service.

However, there are certain scenarios in which a player can achieve a higher maximum salary than his years of service dictate. When a player who would normally qualify for the 30% max becomes eligible for a starting salary worth up to 35% of the cap before he gains 10+ years of NBA experience, he can sign a Designated Veteran contract, also known as a “super-max” deal.

A player who has seven or eight years of NBA service with one or two years left on his contract becomes eligible for a Designated Veteran contract if he meets the required performance criteria.

A Designated Veteran contract can also be signed by a player who is technically a free agent if he has eight or nine years of service and meets the required performance criteria.

However, a player can’t sign a Designated Veteran deal with a new team — only his current team. If he has been traded at any time since his first four years in the NBA, he becomes ineligible for such a deal. Players like Donovan Mitchell, Domantas Sabonis, and Lauri Markkanen are no longer eligible for that reason. Even if they meet the required performance criteria, the fact that they’ve been traded in recent years disqualifies them.

Speaking of that performance criteria, here’s what it looks like. At least one of the following must be a true for a player to be eligible for a Designated Veteran contract:

  • He was named to an All-NBA team in the most recent season, or in two of the last three seasons.
  • He was named NBA MVP in any of the three most recent seasons.
  • He was named NBA Defensive Player of the Year in the most recent season, or in two of the last three seasons.

Given the exclusivity of the MVP and Defensive Player of the Year awards, players who qualify for a Designated Veteran contract do so most often by earning All-NBA nods. For instance, Celtics wing Jaylen Brown became eligible for a super-max extension earlier this month when he was named to the All-NBA Second Team.

Brown and his Celtics teammate Jayson Tatum are the only players currently eligible to sign Designated Veteran contracts, and Brown is the only player who can do so during the 2023 offseason. Tatum has met the performance criteria but doesn’t have quite enough service time to sign a super-max extension, so he’ll have to wait until after the 2023/24 season.

As outlined above, if the Celtics were to trade Brown (or Tatum), he would no longer be super-max eligible.

Designated Veteran contracts are different than Designated Rookie contracts, which in turn are slightly different than Rose Rule deals. The Rose Rule allows players with fewer than seven years of NBA experience to qualify for contracts that begin at 30% of the cap instead of 25%, as we outline in a separate glossary entry.

Here are a few other rules related to Designated Veteran contracts:

  • Even if a player qualifies for a Designated Veteran contract, his team isn’t obligated to start its extension offer at 35% of the cap. The player is eligible for a salary up to that amount, but the exact amount is still a matter for the two sides to negotiate. For example, after becoming super-max eligible, Rudy Gobert signed a contract with the Jazz that began at just over 31% of the cap.
  • A Designated Veteran extension can’t exceed six years, including the number of years left on the player’s contract. So if a player signs a Designated Veteran extension when he has two years left on his current contract, he could tack on four new years to that deal.
  • A player signing a Designated Veteran contract as a free agent can’t sign for more than five years.
  • A Designated Veteran extension can only be signed between the end of the July moratorium and the last day before the start of the regular season.
  • If a player signs a Designated Veteran contract, he is ineligible to be traded for one year.
  • Under the 2017 Collective Bargaining Agreement, a team wasn’t permitted to carry more than two players on Designated Veteran contracts at a time. However, that rule won’t carry over to the 2023 CBA.

Our list of the players who have signed Designated Veteran contracts since their inception in 2017 can be found right here.

Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA’s Collective Bargaining Agreement. Larry Coon’s Salary Cap FAQ was used in the creation of this post.

A previous version of this glossary entry was published in 2018.

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