The CBA Glossary

Veteran extensions

Veteran contracts - i.e. any contracts other than the four-year contract that NBA first round picks get at the start of their careers, known as Rookie Scale contracts, any extensions to which would be classed as rookie scale extensions - are eligible to be extended after the second anniversary of the signing of that contract. However, in the case of previously-extended contracts, if the previous extension lengthened the outstanding contract to five or six seasons (including any remaining seasons on the existing contract), further extensions can be signed after the third anniversary of the previous one.

The NBA’s rules on veteran contract extensions do not require extensions to be the same size or larger than the previous deals. There is a cap on how much bigger they can be, but not on how much smaller.

It is expressly prohibited in the Uniform Player Contract for two-ways and Exhibit 10 contracts to include player options, team options or ETOs. Not that it is easy to work out how that would even be possible in the first place. ⓘArticle II (Uniform Player Contract) Section 2 (Limtation on Amendments):

(b) Notwithstanding Section 2(a) above, except as provided: (i) in Sections 3(f), (i), (j), (l), (m), (n), (o), (p), and (r), and Section 11 of this Article, no amendments to Two-Way Contracts shall be permitted; and (ii) in Sections 3(e), (h), (j), (l), (m), (n), (o), (p), (r), and (s), and Section 11 of this Article, no amendments to Contracts containing an Exhibit 10 shall be permitted. For the avoidance of doubt, in no event may a Team and a player extend, renegotiate, or include an Option Year or Early Termination Option in a Two-Way Contract or a Contract containing an Exhibit 10.

Rookie scale extensions

Players approaching the end of their four-year rookie scale contracts are also extension-eligible, albeit with different parameters.

) Rookie Scale Extensions. No Rookie Scale Contract may be
extended except in accordance with the following:
(1) A First Round Pick who enters into a Rookie Scale Contract
may enter into an Extension of such Rookie Scale Contract during
the period from 12:01 p.m. eastern time on the last day of the
Moratorium Period through 6:00 p.m. eastern time on the day prior
to the first day of the Regular Season of the second Option Year
provided for in such Contract (assuming the Team exercises such
Option).
(2) An Extension of a Rookie Scale Contract may provide for
Salary and Unlikely Bonuses in the first Salary Cap Year covered by
the extended term totaling no more than the maximum amount
provided for in Article II, Section 7. Annual increases and decreases
in Salary and Unlikely Bonuses shall be governed by Section 5(a)(3)
above.
(3) Notwithstanding anything to the contrary in this Agreement, a
player who will not be a Qualifying Veteran Free Agent at the
conclusion of his Rookie Scale Contract will not be eligible to enter
into an Extension of a Rookie Scale Contract pursuant to this
Section 7(b).

In accordance with the special circumstances that all rookie scale contracts have, he has a window between the end of the July moratorium and the day before the opening night of the 2022/23 season to sign an extension.

Extensions to the rookie scale contracts of star (or perceived/likely star) players are commonplace, and usually, they are for the maximum value possible. The gradated pay scale of NBA contracts means that, unless the Fifth Year 30 per cent Maximum Criteria rule (colloquially known as the "Rose Rule") is invoked, Zion is eligible for a salary in the first year of the extension equal to 25% of the 2023/24 salary cap, which on current estimates will come in at roughly $32 million. In a world where Tobias Harris will earn $36 million, it is easy to foresee Zion getting $32 million, knowing what he is capable of.

In the NBA, "Maximum" salaries in the NBA are dependent on various factors. But for rookie scale extensions, the maximum salary a player can receive in the first year of extension is, normally, 25% of the salary cap.
However, given how complicated the NBA's Collective Bargaining Agreement always is, there exists an exception to that 25% rule. Specifically, via a provision called the 5th Year, 30% Max criteria, a player can instead receive a contract starting at 30% of the salary cap, if they have achieved any of the following:
[A] Named Defensive Player of the Year in the previous season, or both of the two prior to the previous season
[B] Named to the All-NBA first, second or third teams in the previous season, or both of the two prior to the previous season
[C] Won the MVP award in any of the three immediately prior seasons.

Cunningham Receives $45 Million Pay Bump
These caveats are not automatically included in extensions, and the conditional "if" language has to be included in negotiations. In the case of Cade Cunningham and the Detroit Pistons, however, they were.
When signing his extension, Cunningham and the Pistons agreed that he would sign for the 30% maximum if applicable, and for the 25% maximum if it was not, with the maximum 8% raises in either event. Having not won the MVP award or been the DPOY, Cunningham was relying on caveat [B] above if he was to get the pay rise. And with today's news, he has done just that.
Exact salary cap figures are not known until the first week of July of the season in question. There are however official NBA projections released occasionally, from which fairly accurate approximations of Cunningham's extension value can be calculated.
If Cunningham was to receive the 25% first-year maximum, the value of his extension would have looked like this:
" 2025-26: $38,661,750
" 2026-27: $41,754,690
" 2027-28: $44,847,630
" 2028-29: $47,940,570
" 2029-30: $51,033,510

" Total: $224,238,150

(* all figures calculated using the NBA's latest official 2025-26 salary cap estimated amount of $154,647,000)

Now that Cunningham will get the 30% first-year maximum, however, those numbers raise to the following:
" 2025-26: $46,394,100
" 2026-27: $50,105,628
" 2027-28: $53,817,156
" 2028-29: $57,528,684
" 2029-30: $61,240,212

" Total: $269,085,780

(* all figures calculated using the NBA's latest official 2025-26 salary cap estimated amount of $154,647,000)

Designated veterans

The NBA's Collective Bargaining Agreement contains two rules that, when combined, are designed to allow teams to give bigger and longer contracts to star players. The Designated Veteran rule allows them to sign longer contracts, and the Designated Veteran Player 35 per cent Max Criteria rule (colloquially known as the 'supermax') allows them to sign bigger ones.

In tandem, teams can extend certain players with eight or nine years of service - their "Designated Veterans" - to a salary that starts at up to 35% of the salary cap, for up to six years in the future. Usually, only players with ten or more years of service can receive that starting amount, with players with only eight or nine years limited to 30%. Therefore, "Designated Veterans" can receive a 5% pay increase in year one, as well as an extra year in contract length.

To be a "Designated Veteran", that player has to have met the following criteria:

" They have been with the same team continuously during their first "rookie" extension,

" They have seven or eight years of experience at the time of the "veteran" extension,

" They must have been either:

[A] Named Defensive Player of the Year in the previous season, or both of the two prior to the previous season

[B] Named to the All-NBA first, second or third teams in the previous season, or both of the two prior to the previous season

[C] Won the MVP award in any of the three immediately prior seasons.

By winning MVP, Gilgeous-Alexander satisfies the above. After the season switches over on 1st July, he will be a seven-year NBA veteran. who has only ever played for the one team, and who has won an MVP award.

As a result, once the season switches over on 1st July, Shai has between that date and opening night to sign a Designated Veteran exception that will run through the end of the 2030-31 season. But if he waits another year, it could be even bigger.

Per the above, the maximum length of a Designated Veteran extension is six years, including seasons remaining on their incumbent contract. Also per the above, Gilgeous-Alexander is currently under contract until 2027.

If he signs an extension this summer, then, Shai can receive a "supermax" until 2031. But if he instead waits and signs an extension in the summer of 2026, Shai can sign through until 2032. And that gives him the opportunity to not just set a record, but obliterate it.

With the new 2024's CBA's ability to start the first season of extended contracts at 140% of the salary of the final season of the contract being extended, up from 125%

The "Supermax"

“Designated Veteran Player” means a player with whom a Team
has, pursuant to Article II, Sections 7(a)(ii) or 7(e) and Article VII,
Section 7(a), entered into either a Designated Veteran Player Extension or
Designated Veteran Player Contract.
(q) “Designated Veteran Player Contract” means a Contract
entered into between a Team and its Designated Veteran Player who is a
Qualifying Veteran Free Agent that covers five (5) Seasons and provides for
Salary for the first Salary Cap Year equal to such percentage above thirty
percent (30%) but not greater than thirty-five percent (35%) (as agreed upon
by the Team and the player) of the Salary Cap in effect at the time the
Contract is executed. Annual increases and decreases in Salary and Unlikely
Bonuses in a Designated Veteran Player Contract shall be governed by
Article VII, Section 5(a)(2).

(r) “Designated Veteran Player Extension” means an Extension of
a Contract entered into between a Team and its Designated Veteran Player
that covers six (6) Seasons from the date the Extension is signed and
provides for Salary for the first Salary Cap Year covered by the extended
term equal to thirty percent (30%) or thirty-five percent (35%) (or such other
percentage between 30% and 35% as agreed upon by the Team and the
player) of the Salary Cap in effect during the first Season of the extended
term. Annual increases and decreases in Salary in a Designated Veteran
Player Extension shall be governed by Article VII, Section 5(a)(3).

MAIN TAKEAWAYS: