|
The Stretch Provision allows an NBA team to lessen the salary cap hit of a bad contract. Moreover, it says that if an NBA team waives a player and that player’s contract clears waivers and is not picked up by another team, then the original NBA team can pay out the remainder of the guaranteed money in the contract over twice the remaining life of the contract plus one year. The formula is as follow:
Remaining Salary / (2 * (Years Remaining on Contract) + 1) = Yearly Salary Payments For example, in 2017-2018, Luol Deng, who possesses the least tradable contract in the NBA, has two years remaining on his contract with the Lakers totaling $36.81 million. In order to clear cap space, the Lakers should waive Luol, and assuming he is not picked up off the waivers, his contract will be divided as follows: $36.81 million / (2*(2) + 1) = $7,362,000 in yearly payments With this in mind, the Lakers would be able to take a five-year salary cap hit of $7.362 million a year instead of two ~$18 million hits in 2018 and 2019. This would free up over $10 million in cap space each year for the next two years.
2 Comments
Patrick
2/11/2018 07:05:04 pm
If you switch to the deferred payment, could you switch back and pay off the contract? So if the Lakers stretch out his contract to free up cap room for free agency this summer but end up not making any big signings, could they then decide to pay the contract off with their cap room? Or are they stuck stretching out the contract at that point? Because the team has waived the player and declared the use of the Stretch Provision, the team cannot reverse the payment plan. Thus, the deferred payments will be in place for the remainder of the stretched time period. However, a team can attempt to Buy Out a player at a lower value than the contract signed (see Marco Belinelli 2018: https://basketball.realgm.com/wiretap/248938/Marco-Belinelli-Finalizing-Buyout-With-Hawks). Also, if the stretch player signs a contract with another team after the Stretch is declared (because the player will have cleared waivers and become a free agent, even though they are still being paid by the Stretching Team), the stretch can be reduced by Set-Off payments, which are a fraction of the new contract signed. Look for an article about that soon. To conclude, a team cannot invoke the Stretch and then reverse it if their cap space allows them to fully pay-off the contract at once at a later date. Leave a Reply. |
AuthorI'm Jake, a recent graduate of Duke University pursuing a career in collegiate or professional basketball operations. 
Cap #s 2018 - 2019
Salary Cap: $101.869M Lux. Tax: $123.733M Tax Apron: $129.827M Tax Floor: $91.682M Room MLE: $4.45M Tax-MLE: $5.34M Non-Tax-MLE: $8.64M BAE: $3.38M 
@hoopsconcierge
@hoopsconcierge
Archives
August 2018
|
||
Proudly powered by Weebly