Behind the NBA games that we see on TV is an even bigger and more intricate game played by team owners, general managers, and administrators. And in the shadows of every trade scenario that we have in mind is a complex system of numbers and rules. From time to time, elements from this world underneath the NBA would surface in social media and mainstream news to remind us about the intricacies that make up the league.
One of these terms is the Stretch Provision — an administrative tool that teams can use to negotiate deals and pull off moves to manage their current roster of contracts. Let’s learn more about it.
What is the NBA Stretch Provision?
The Stretch Provision is a rule outlined in the NBA’s Collective Bargaining Agreement (CBA). For those unfamiliar with the concept, the CBA is an intricate contract crafted and agreed upon by the NBA and the National Basketball Players Association (NBPA) that outlines every administrative rule that governs the league. The CBA includes every provision and guideline, from trades and contracts to revenue and salaries, among many things.
The Stretch Provision is just one of the many tools in the CBA that teams can use to manage their payroll. It allows teams to “stretch” the payment terms of a player’s remaining salary over a period of time dictated by the CBA. Essentially, the Stretch Provision gives teams more flexibility to manage their salary cap and, in turn, their current roster.
How Does the Stretch Provision Work?
The Stretch Provision works by stretching the payment period of a player’s current remaining salary to twice the current period plus one. For example, if a team owes a player the sum of 27 Million in 2 years, triggering the Stretch Provision will allow the team to pay the player in 5 years instead (5 years x 2 + 1 year). This was exactly the case with Josh Smith, who signed with the Detroit Pistons to boost their frontcourt — only to be bumped out to irrelevancy. By the 2nd year of his 4-year contract, he was waived but still needed to be paid what he was owed.
For a team that is dangerously close to the salary cap like Detroit, dividing 27 Million in 5 years as compared to paying the same amount in 2 years’ time is a huge deal. A 27 Million contract for two years will have a team exceed the cap by almost 14 Million for each of the next two years. With Stretch Provision elected, Detroit would only go over 5 Million for each of the next seven years.
How Long Does NBA Contract Stretched?
The CBA outlines that a contract may only be stretched via Stretch Provision based on its remaining years at the time that the stretch was triggered. Here’s the formula for a stretch under the Stretch Provision: remaining years in the contract x 2 + 1 year. Through the years, the NBA has seen some notorious stretches that saw players stay in a team’s payroll even after years of being inactive in the league.
If we’re talking about notorious cases of Stretch Provision, Luol Deng deserves to be up there. In 2016, Deng signed a 4-year $72 million contract to add a necessary veteran presence in a young Lakers team post-Kobe Bryant. In 2018, the deal had to be restructured and extended to 2 more years, making the Lakers-Deng contractual relationship a 6-year one. The final stretch saw the Lakers commit the final $15 Million to Deng over three years — that’s $5 Million a year. Interestingly, Deng would be the Lakers’ fifth highest-paid player every season, even if he wasn’t playing in the NBA anymore.
Other NBA Players Who Were Subject to Stretch Provision in the Past
Apart from Luol Deng and Josh Smith, here are some more examples of players who had their contracts extended via Stretch Provision:
Deron Williams was one of the Brooklyn Nets’ first superstars, but his success was short-lived. Deron joined the Nets as a veteran point guard who could score and facilitate teams the same way a prime Chris Paul could. However, injuries got to Williams, and the partnership with the Nets would soon fall.
The Nets and Deron would agree to a buyout in 2015 with two years left in his contract and a total of $43 Million still owed to the point guard. The Nets would elect a Stretch Provision to extend the payout to five years in total and enable a sum of $27.5 Million to be stretched during those years.
Varejao was a key piece in LeBron’s first run with the Cavaliers. He was often referred to as one of The King’s favorite teammates. Varejao was a great role player who could defend opposing bigs and carve out space in the paint when needed — it wasn’t much, but it was enough to get him into the NBA.
In 2009, the Cavs would reward Varejao’s services with a six-year $50 Million contract and renegotiate in 2014 to another 3-year $30 Million deal. Nature would soon catch up to Varejao’s body as he would experience injury after injury. Ultimately, Varejao would be sent to Portland in 2016 with two years remaining in his contract, which the Blazer would then stretch to 5 years of around $2 Million a year.
Before Steph Curry, there was Monta Ellis — the lights-out point guard who had defenses scrambling. In 2015, the Indiana Pacers were in need of a costar for Paul George, who could open up the floor and create scoring chances. During this time, Monta was a steady scorer who fit the bill and the bills, so the Pacers brokered a 4-year $44 Million deal.
Unfortunately, Monta’s game didn’t translate well with the Pacers’ strategies, and he would lose a significant role with the team. In 2017, a year and a half into the contract, Monta Ellis got suspended for five games, while Paul George asked out. Monta Ellis would totally fall out of the team but with an $11.2 Million tie to the organization for two more years. The Pacers would use the provision to stretch the payment to 5 years of around $2 Million each.
Benefits and Implications of NBA Stretch Provision
Inherently, the Stretch Provision provides much-needed flexibility, which is a good thing for franchises for various reasons. First, having this flexibility allows you to reduce the cap hit and, in turn, still be able to sign players who can contribute to the team. This flexibility also allows teams to lessen their payment load and provide more lucrative contracts to other players. Whether you are a rebuilding team or a superteam looking to add depth, the Stretch Provision would have its use.
However, triggering a Stretch Provision can also be a double-edged sword. While it gives you flexibility, stretching contracts will also extend your financial obligations like an unpaid loan. If stretched contracts are not managed well, the team might lose all the cap space to contracts of players who aren’t even playing anymore.
Wrapping Things Up: How Does the NBA Stretch Provision Work?
The NBA’s inner workings are full of tools and provisions that could help teams manage their finances, roster, and other factors that can directly affect team performance. One of these tools is called the Stretch Provision, a tool that allows teams to stretch a contract so that they don’t have to pay a huge sum of money upfront.
With the Stretch Provision, teams can lessen their cap hit in exchange for having that financial obligation stretch to twice the remaining year of the contract plus 1 (remaining years x 2 + 1 year). Through the years, the NBA has seen a couple of notorious players whose contracts were extended through this provision, like Josh Smith, Luol Deng, and Monta Ellis. The Stretch Provision is one of the intricacies that make up the NBA as we know it, so it’s great that you now know about it, too.
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