NBA teams can use the stretch provision all season long, but 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 2019/20 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 can 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 most teams around the NBA, this weekend’s August 31 deadline will come and go with little fanfare. Clubs generally use the stretch provision when they want to create a little cap room or get below the luxury tax line — there aren’t many teams fitting that bill at this point.
The Hawks are the only team with any cap space available, and they could substantially increase that space by waiving and stretching, say, Chandler Parsons‘ $25MM+ salary. However, that would add annual cap hits of $8MM+ to the team’s books for 2020/21 and 2021/22, compromising Atlanta’s cap flexibility in future offseasons. Plus, it’s not as if there are any free agents still on the market requiring significant cap room. The Hawks seem very unlikely to make such a move.
Using the stretch provision by August 31 may be a more viable option for teams hovering right around the tax line. The Thunder, for instance, are currently in the tax by about $921K. If they have doubts about Andre Roberson‘s ability to get healthy and contribute this season, waiving and stretching his $10.74MM salary and replacing him with a minimum-salary player would be an easy way to slip below that threshold.
By all accounts though, Oklahoma City expects Roberson to return to action this season and wouldn’t give up on him at this point. If they don’t release a player by August 31, the Thunder will likely try to find a trade later in the 2019/20 league year that would allow them to avoid the tax.