Stretch Provision Deadline For 2016/17 Salary

August 31 represents an important date on the NBA calendar, since it’s the last day of the year that teams can waive a player and stretch his 2016/17 cap hit across multiple seasons. Teams waiving players after August 31 can still employ the stretch provision to cap hits, but it can only be applied to future-year salaries, rather than to a player’s current-year salary.

Here’s how the rule works, per Larry Coon’s Salary Cap FAQ:

  • If a team waives a player between July 1 and August 31, it can stretch the cap hit for that player’s remaining salary over twice the number of years remaining on his contract, plus one. For instance, if a player is under contract for this year and next year at a rate of $15MM per season, his remaining salary can be stretched over the next five years with cap hits of $6MM annually.
  • If a team waives a player between September 1 and June 30, the current-year cap hit remains the same, while future-year cap hits can be stretched out over twice the number of years remaining on the contract, plus one. In this scenario, the hypothetical contract from the previous example would count for $15MM against the cap this year, with subsequent $5MM annual cap hits for the next three years.

Today’s deadline doesn’t mean we’ll see a flurry of cuts happen within the next several hours. Most teams aren’t in a position where they’d need to clear extra cap flexibility for an incoming player, so there’s likely not much urgency to open up cap space this season.

For example, the Lakers have a release candidate in Nick Young, who doesn’t appear to be in the team’s future plans. However, Los Angeles is already more than $5MM over the cap, so stretching Young’s 2016/17 salary ($5,443,918) and reducing the current cap hit by about $3MM wouldn’t really help the club gain any spending flexibility in the short term. If the team intends to cut him at some point, keeping Young on the roster through today and perhaps stretching him later would allow the team to minimize future cap hits and get him off the books sooner. Here’s the breakdown:

Nick Young salary

A handful of other teams around the NBA currently employing players who aren’t in that franchise’s plans will face similar decisions today. However, considering most of those clubs have already done the majority of their cap work for 2016/17 and could benefit down the road by waiting until after today’s stretch provision deadline to waive certain players, we aren’t expecting many big names to hit the waiver wire today.

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