A provision within the NBA’s Collective Bargaining Agreement allows eligible players completing their rookie contracts to qualify for a higher maximum salary under specific performance-based criteria. This designation, officially the “5th Year, 30% Max Criteria,” is often referred to by a different name, honoring a specific player who met the qualifications early in its existence. To qualify, a player must meet one of three conditions: being named to an All-NBA Team (any of the three teams) twice, being voted as the NBA’s Most Valuable Player once, or being named Defensive Player of the Year twice during their rookie contract. Meeting any of these benchmarks enables a player to sign a contract worth up to 30% of the team’s salary cap, instead of the standard maximum for players with 0-6 years of experience.
This mechanism serves as an incentive for outstanding performance early in a player’s career and allows teams to secure their franchise cornerstones with compensation reflecting their contributions. It provides a financial reward for exceptional play and recognizes players who have quickly ascended to elite status. Historically, its implementation provided a way for teams to retain top-tier talent produced through the draft by offering a significantly more lucrative contract than would otherwise be permissible under the standard salary cap structure. This encourages teams to invest in player development and rewards players for exceptional achievement during their formative years in the league.
