While NBA teams can use the stretch provision all season long, August 31 represents a key deadline related to the rule. Players who are waived by August 31 can have their current-year salaries stretched, immediately reducing their 2018/19 cap charge. If a player is released after August 31, his current cap hit will remain unchanged, and only the subsequent years of his contract will be stretched.
As we detail in our glossary entry on the subject, the stretch provision is a rule ensuring that any player waived with at least $250K in guaranteed salary remaining on his contract will have the payment schedule of that money spread across multiple years. Teams also have the option of spreading his cap charges across the same number of years.
That schedule is determined as follows:
- If a player is waived between July 1 and August 31, his remaining salary is paid over twice the number of years remaining on his contract, plus one.
- If a player is waived between September 1 and June 30, his current-year salary is paid on its normal schedule, with any subsequent years spread over twice the number of remaining years, plus one.
- Note: If a player in the final year of his contract is waived between September 1 and June 30, the stretch provision does not apply.
For instance, as the Knicks mull whether or not to waive Joakim Noah, here are the options they’ll consider:
| Year | Leave contract as is |
Stretch by 8/31/18 |
Stretch after 8/31/18 |
|---|---|---|---|
| 2018/19 | $18,530,000 | $7,565,000 | $18,530,000 |
| 2019/20 | $19,295,000 | $7,565,000 | $6,431,666 |
| 2020/21 | – | $7,565,000 | $6,431,667 |
| 2021/22 | – | $7,565,000 | $6,431,667 |
| 2022/23 | – | $7,565,000 | – |
In Noah’s case, there’s essentially no incentive for the Knicks to waive and stretch him by August 31. The team – well over the cap for 2018/19 – wouldn’t be able to take advantage of the extra cap flexibility this season. As such, it makes more sense to keep him on the roster for now and to start considering the possibility of his release sometime after September 1.
The same logic that applies to Noah and the Knicks applies to most teams around the NBA. Outside of perhaps Rodney Hood, there just aren’t many free agents left who are worth using cap room on, so teams aren’t clamoring to create additional space for the 2018/19 season. In other words, we shouldn’t expect to see many players on expensive contracts hit waivers in the next week.
There are a couple of potential exceptions worth watching. The Kings, for instance, have about $11MM in cap room and are currently carrying 16 players on guaranteed contracts. If they decide they want to waive a veteran like Iman Shumpert to get down to 15 players for the regular season, it might make some sense to stretch him by August 31. That would reduce his $11MM+ cap charge to just $3.67MM for 2018/19, opening up another $7MM+ in cap space for Sacramento.
Again though, unless the Kings have a use in mind for that cap room, they’ll likely be reluctant to add extra salary to their cap for two subsequent seasons by stretching Shumpert’s 2018/19 salary. The same can be said of the Suns, who are currently hovering just below the $101.869MM salary cap in terms of total guaranteed salary.
Phoenix is reportedly expected to buy out Darrell Arthur, and if the team does so within the next week, it could trim his $7.46MM cap hit to about $2.49MM, opening up additional cap room. Like the Kings, the Suns would have to have a clear purpose in mind for that space in order to justify adding extra money to their books for two future seasons.
Golden State Warriors
Phoenix Suns
Houston Rockets (11 guaranteed contracts): In addition to their 11 fully guaranteed contracts, the Rockets also figure to hang onto