Why “Stretching” Is The New Normal

Why “Stretching” Is The New Normal
Mon 20th May 2019

As the 2018/19 NBA season rises towards an inevitable
Warriors-Bucks crescendo in June, the defeated challengers will begin looking
wistfully to the summer, casting their eyes towards the mythical land of “free
agency”.

But what really is this magical world? What
happens when Kevin Durant, Kyrie Irving, Kawhi Leonard, Kemba Walker, Klay
Thompson and Jimmy Butler become freely purchasable commodities on the open
market in July 2019? Has “loyalty” become a foreign concept? Why would any
basketballer in their right mind want to go to the New York Knicks?

Let’s find out, as we take a trip down the
free agency rabbit-hole in this series of articles.

A term
you’re going to start to see pop up everywhere in offseason trade / free agency speculation
consistently in the next few months is the idea of “stretching” a non-performing player’s
contract.

 

For
example, in this recent article about Mike Conley’s potential trade destinations posted on The Ringer, there is a suggestion that the Minnesota
Timberwolves might want to “stretch” the $19 million owed to Jeff Teague next
season so that they can dump Teague as point guard and find room for Conley in
the line-up.

 

“Stretching”
a contract sounds so simple when used in that context, but in reality it’s a
concept which is of primary strategic importance for an intelligent front
office.

 

As we’ve explored in previous articles about both the NBA and NFL, the entire premise of “guaranteed
money” on a player’s contract is that the player WILL be paid that money no
matter what happens.

 

Because
of that, even if the player is cut loose from the team (i.e. “waived”) they
will still receive their guaranteed money. Hence, because the team is still paying
them, that money must be accounted for in the team’s salary cap figures.

 

For
obvious reasons, it wouldn’t really be feasible for Minnesota to dump Teague to
the waivers in order to get Conley, if it also meant they had to account for
Teague’s $19 million salary in their cap for 2019-20.

 

Prior
to the 2011 Collective Bargaining Agreement, this is exactly what Minnesota
would have been forced to do if they wanted to waive the ailing point guard. The 2005 CBA did
contemplate “stretching”, but only in that a waived player’s guaranteed money
would be evenly split across the team’s cap for the remaining years of the
contract.

 

The 2011 CBA introduced the now commonly-utilised
“Stretch Provision”; in the process dramatically changing the roster-management
possibilities for a team seeking to offload an under-performing player.

 

“Stretching” a waived player’s contract is a major way to minimise the damage caused to the team’s salary cap by dumping a player whose services are no longer needed.

Here’s
how it works.

 

Stretching

Waiving
Teague and stretching his contract would mean that rather than that $19 million
hitting all at once next season, its effect on the cap is spread out over the
next three seasons.


Image result for jeff teague

 

Under
the NBA’s “Stretch Provision”, when a player with guaranteed money (more than
$250,000) remaining on their contract is waived, the team is required to pay
the player their money over twice the number of remaining years on the contract
plus one.

 

For
example, if Minnesota were to waive Teague during this offseason, they would
still be on the hook for one year and $19 million worth of guaranteed money.

 

Per
the Stretch Provision, Teague would actually physically receive that money over
the next three years (twice the number of years remaining plus one); i.e. he
would get $6.333 million in 2019-20, 2020-21 and 2021-22.

 

Crucially
though, the team itself can also choose whether or not that money shows up on
the cap in that way (i.e. stretched over three years) or whether it hits all at
once.

 

For a
team like the Timberwolves it simply wouldn’t be feasible for them to have to
account for the contracts of Andrew Wiggins ($27,504,630), Karl-Anthony Towns ($27,250,000),
Mike Conley ($32,511,623) and Teague’s $19 million in next year’s salary cap.
In fact, it’s likely that would be impossible.

 

So, if
they were to make a successful play at Conley (potentially by trading that
Wiggins contract), in all likelihood that would also mean stretching Teague’s
$19 million over the next three season.

 

It’s
also worth noting that the “remaining years of a contract) (for the purpose of
stretching) does not generally include years which come under player or team
options.

 

However,
all contracts with player options have clauses which state whether a player
will receive the option-year salary in the event that they are waived before
reaching the option. If that is the case, then the league interprets the option
year as being part of the contract.

 

E.g.
if a player’s contract stipulates their $5,000,000 option for 2021-22 gets paid
out if they’re waived prior to choosing whether to exercise the option, the NBA
considers that 2021-22 year to be part of the remaining years in the contract.
Hence, that year is a factor in the length the contract can be stretched if
they’re waived prior to the option.


Infamous
Stretchings

Any
explanation of contract stretching would be remiss not to mention some of the
more notorious stretched contracts getting around in the league at the moment
(amount owed through which years in brackets):

  • Brooklyn:
    Deron Williams ($5.4 million through 2019-20)
  • Detroit:
    Josh Smith ($5.3 million through 2019-20)
  • Indiana:
    Monta Ellis ($2.2 million through 2021-22)
  • LA
    Lakers: Luol Deng ($5 million through 2021-22)
  • New
    York: Joakim Noah ($6.4 million through 2021-22)
  • Milwaukee:
    Spencer Hawes ($2 million through 2019-20)
  • Oklahoma
    City: Kyle Singler ($999,200 through 2022-23)
  • Portland:
    Andrew Nicholson ($2.8 million through 2022-23) and Anderson Varejao ($1.9
    million through 2020-21)
  • Sacramento:
    Matt Barnes ($2.1 million through 2019-20)
  • San
    Antonio: Tim Duncan ($1.8 million through 2018-19)

 

That
Joakim Noah deal remains one of the more baffling contracts in league history.


Image result for joakim noah knicks

 

Noah
was waived on October of last year, with the entirety of 2018-19 and 2020-21
seasons still remaining on his contract. The Knicks copped his 2018-19 salary ($18,530,000)
against the cap for this season, but were able to stretch the remaining one
year and $19.295 million over the next three years ($6,431,667 per year).

 

Without
having the ability to manoeuvre in that way, New York wouldn’t have the cap
space to be able to sign two max contracts in this offseason.

Now they do.

Stretching
may just have landed them Kyrie Irving and Kevin Durant.


Written and produced for Sportstips.com by Eddie Dadds


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