Breaking Down Why NBA Superstars Will No Longer Receive Max Extensions

Dan FavaleFeatured ColumnistAugust 24, 2012

EL SEGUNDO, CA - AUGUST 10:  Dwight Howard speaks after being introduced to the media as the newest member of the Los Angeles Lakers during a news conference at the Toyota Sports Center on August 10, 2012 in El Segundo, California. The Lakers aquired Howard from Orlando Magic in a four-team trade. In addition Lakers wil receive Chris Duhon and Earl Clark from the Magic.  (Photo by Kevork Djansezian/Getty Images)
Kevork Djansezian/Getty Images

The NBA is as compelling as ever, largely in part because max extensions offered to superstars are dying.

Yes, dying.

Extensions are beneficial to teams with impending free agents for a number of reasons. Not only does it save them from the risk of losing players on the open market, but now, courtesy of the new CBA, it saves them money—an entire year's worth of dough, actually.

Unfortunately for organizations looking to retain their prized athletes, the latter is just the reason why these types of extensions are dying, or rather, are already dead.

Under the new CBA—as Larry Coon of ESPN breaks down nicely—not only are six-year contracts history, but players who opt to re-sign before officially hitting free agency can only sign on for an additional four years.

Veteran extensions are limited to four seasons, including the seasons remaining on the current contract. Even if the extension is signed in late June, the current season counts as one full season toward the total. For example, a contract with two seasons remaining may be extended for up to two additional seasons. However, an extension signed in conjunction with an Extend-and-Trade transaction (see question number 91) is limited to three seasons, including the seasons remaining on the current contract.

The exception to this is if they're coming off rookie deals and their team designates them as, well, their "Designated Player," then they can offer them a five-year pact (see Russell Westbrook's deal with the Thunder in 2011).

If that's not the case, five-year accords can only be offered to players who hit the open market. So, essentially, any player—or, more specifically, any superstar—who decides to exude loyalty and re-up with his team before free agency is potentially leaving tens of millions of dollars on the table.

And who do we know that's willing to do that?

Hardly anyone.

This new clause is exactly why Deron Williams didn't sign with the Nets before July. It's why Dwight Howard and Chris Paul are refusing to re-sign with their Los Angeles-based teams now. And why there's a case for Serge Ibaka to be considered an idiot.

I'm kidding about that last one. Somewhat.

There is absolutely no incentive for any superstar opting to forgo the free-agency process at this point. Doing so costs them an entire year of financial security. In the scheme of an NBA career, that can mean the world.

So, we can speculate about Howard and Paul leaving their respective teams all we want, but the fact is, their decision right now isn't personal, it's just business.

That's what the NBA has become—a business. Athletes love to play the game, but they also love to get paid. And now in order to get paid—like, really paid—stars are essentially encouraged not to exude immediate loyalty.

Instead, they're at the mercy of the almighty dollar, in the form of that extra year. They're "forced" to wait and wade through the rumors of distrust and conspiracy that will undoubtedly consume the headlines when it's announced that they've turned down an extension worth $20 million or more—less than what they can get in free agency.

Crazy, right?

In a sense, this reality actually assists perpetual player movement, one of the things the lockout was intent on solving. Incumbent teams still have the ability to offer more money in free agency, but they no longer have the luxury of shielding their superstars from the slew of offers that will undoubtedly come in.

What if Paul hits free agency, gets a taste of another team's blueprint and decides to take a pay cut to play there? Or what if he—or Howard—forces his team's hand and wills a sign-and-trade into existence? The new CBA prevents teams over the cap from making such a move, but there's still plenty of organizations that fall outside those parameters.

But I digress.

The NBA killed the max extension under the new CBA. Why on earth would a player leave a whole year and millions upon millions of dollars on the table, especially if money is the only thing keeping them in that particular uniform in the first place?

They wouldn't, because there's hardly any upside to doing so. Unless a star is fiercely loyal and willing to take a massive financial hit, these types of deals are dead.

But if the past few summers have taught us anything, that type of loyalty—especially from superstars—is on life support.

Kind of like the max extension itself.