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Insider

Will new contracts for NBA stars be max mistakes?

Ezra Shaw/Getty Images

The biggest addition to the new collective bargaining agreement (CBA) is the designated veteran provision.

The new rule allows teams to extend or re-sign certain superstar players for up to five years starting at 35 percent of the salary cap, while other teams will be limited to offering only 30 percent.

This summer, the Sacramento Kings will be able to extend DeMarcus Cousins' contract using the designated veteran extension, and the Golden State Warriors can use the designated veteran exception to re-sign Stephen Curry.

Other stars like Paul George of the Indiana Pacers and Jimmy Butler of the Chicago Bulls might eventually qualify as designated veterans.

At first glance, the designated veteran rule is a huge win for owners, who now have a better chance of retaining their star players beyond their second contracts.

That victory comes at a price, literally. While truly elite superstars will still be undervalued even at 35 percent of the cap, second-tier stars like Cousins will no longer provide as much additional value.

How favorable will designated veteran contracts truly be from a team standpoint? Could the new rule trap teams into big mistakes?