Deadline Looms For Teams To Stretch 2017/18 Salary

Thursday, August 31 represents the deadline for teams to exercise the stretch provision on 2017/18 salary, meaning clubs have just over 24 more hours to waive players whose ’17/18 salaries they’re hoping to stretch.

The stretch provision is a CBA rule that allows teams to stretch a waived player’s remaining guaranteed salary across multiple seasons. From July 1 to August 31, the rule dictates that a team can pay out the player’s salary over twice the number of years remaining on his contract, plus one. For instance, a contract with three years left on it could be stretched out over seven years. After August 31, only future years on the contract can be stretched in that manner — so for that three-year contract, the current-season salary would stay as is, while the remaining two seasons could be stretched across five years.

As a point of reference, here’s what Andrew Nicholson‘s contract with the Trail Blazers looks like in its current form, along with the new salary figures based on that deal being stretched before or after August 31:

Year Current contract Stretched by August 31 Stretched after August 31
2017/18 $6,362,998 $2,844,429 $6,362,998
2018/19 $6,637,002 $2,844,429 $2,709,601
2019/20 $6,911,007 $2,844,429 $2,709,602
2020/21 $2,844,430 $2,709,602
2021/22 $2,844,430  $2,709,602
2022/23 $2,844,430  $2,709,602
2023/24 $2,844,430

As our chart shows, if the Blazers wait until September to waive and stretch Nicholson, they would take on a lower annual cap hit after 2017/18 and those cap charges would end a year earlier. However, Portland is widely expected to stretch Nicholson by August 31 in order to reduce his current-year cap hit. The Blazers are currently several million dollars into tax territory, and reducing Nicholson’s 2017/18 cap charge by $3.5MM+ would significantly reduce the club’s projected tax bill, even if it hurts Portland a little more in future seasons.

While Nicholson is a good bet to be waived this week (update: he has been waived), we shouldn’t necessarily expect a flurry of action by Thursday, since most teams aren’t in a situation like the Blazers. Still, we could see a move from clubs that have an expendable player and want to either reduce their tax bill or create more breathing room below the cap or tax line.

The Bucks look like another prime candidate to make a move by Thursday. It doesn’t appear that Spencer Hawes will be a major part of the club’s plans for 2017/18, and Milwaukee is currently slightly over the tax line. Waiving Hawes and stretching the final year of his contract (worth $6,021,175) across the next three years would get the Bucks out of tax territory and would create a little more flexibility to add a player or two, if needed.

Nicholson and Hawes were two of the five players who I identified earlier this month as candidates to be waived and stretched by August 31, and I think they’re easily the strongest candidates on that list. Stay tuned through Thursday to see if they’re cut, and to find out if other players hit the waiver wire before the August 31 deadline.

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