In July 2016, Tim Duncan he hung up his boots and closed a legendary NBA career, marked with five rings. San Antonio had been without its pillar since 1997, but that did not mean that it would stop entering the payroll. Specifically, those from Texas were paying 1.8 million dollars a year to their star until the end of 2018-19.
In October 2019, Kyle Singler, then with a contract in force with Iberostar Tenerife, suddenly announced his retirement. At 31, his decision caught everyone by surprise. At that time, the former Real Madrid, OKC or Detroit player, among others, had been receiving a total of $ 999,200 per year from the Thunder for twelve months, a franchise that had cut it in August 2018. He will continue to enter that amount until the term of the 2021-22. Luol Deng, also in October 2019 and after having played a season in Minnesota, he decides to leave the courts. Money from the Lakers’ coffers is going to start pouring into his checking account. Specifically, 5 million dollars from that 2019-20 until the end of 2021-22.
Last December, Joakim Noah he was fired by the Clippers, but surely one of his last worries was to stop receiving a salary. The power forward earns from 2019-20 until the conclusion of 2021-22 a total of 6,431,677 million dollars. The payer, the New York Knicks.
These four players are good examples of the dreamed dismissal that in most cases represents the Stretch Provision, the tool used by NBA franchises to stretch the payment of outstanding salaries to fired players, with the consequent beneficial impact on salary margins.
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How does the ‘Stretch Provision’ work?
It must be clarified that not all the dismissal of a player with a current contract is done under this formula. To apply it, a series of requirements must be met, such as that the outstanding guaranteed amount is at least $ 250,000, that the dismissal in a current season occurs between July 1 and August 31 and that according to the agreement to the less one campaign remains.
If it meets these characteristics, the franchise can benefit from the Stretch Provision. It is not the same to pay a player 18 million dollars at once for the remaining course, and that the entire amount is reflected in that season in the payroll, than to make that millionaire more flexible and distribute it in more campaigns.
The formula to develop the payment of the Stretch Provision is simple: the courses pending contract are taken, multiplied by two and another season is added. Here’s an easy example: Justin Hamilton was fired in July 2017 by the Nets, who owed him three million euros for 2017-18. Thus, Brooklyn stretched the credit of that check under the Stretch Provision ‘and distributed that amount, at the rate of 1 million dollars in three annuities.
Collect what was agreed in installments later than established. Pros and cons of a rule that allows deferred dismissals
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Although there are nuances, because you can fire a player beyond August 31 and apply this rule, that as long as there is more than one agreement course left. The Deng and Noah cases are very illustrative. They both had two years left of their lucrative contracts signed in the money bacchanal of the summer of 2016. As their dismissal went beyond August 31, the amount of the current season was credited to them every fortnight as another member of the team 2018-19; then, both New York and the Los Angeles entity used the Stretch Provision to extend the payment of the pending in 2019-20. In the case of Noah, about 19 million dollars spread over three seasons and in Deng’s, 15 million (after forgiving the Lakers three million) also extended in that same period.
Data and cases for 2020-2021. Of the thirty NBA franchises, fourteen have among their expenses a part destined to pay, via Stretch Provision, to players who no longer work for them. For this 2020-21, these checks, which in a normal world without coronavirus were received twice a month and since November 15, cover all kinds of profiles and stories. Former NBA stars like the aforementioned Noah or Deng, Dewayne Dedmon, a free agent waiting for a call, pieces that now shine in Europe like Guerschon Yabusele (earns a 1 million dollars paid by the Celtics) or players whose careers were suddenly turned off, read the Ryan Anderson o Monta Ellis, who receive $ 5.2 million and $ 2.2 million from the Heat and Pacers, respectively, this 2020-2021 season. We also have illustrious people like JR Smith (1.6 million Cleveland pays him), Anderson Varejao (1.9 million receives from the Blazers) or Shaun Livingston. The Revenant charges $ 666,666 from Golden State.
But not everything are advantages. Obviously, being paid money that is yours but that you are receiving without working it is an extraordinary way to earn a living. However, not all plans are perfect, sometimes they have cracks. While it saves franchises the salary hassle of paying everything at once and leaves them more margin for their operations in the market, with the possibility of even getting away from the always dreaded Luxury Tax, players have to abide by this form of dismissal without complain … and with the disadvantages that it may entail.
Spencer Hawes, fired by the Bucks in 2017, clamored in 2019 for a change in the Stretch Provision system. He wanted them to give the player the option to receive all the money at once. “It is good to have continuous income, but they could leave open the way to collect everything at once to invest it”. Hawes, who still earned $ 2 million from Milwaukee in 2019-2020, has sought his career out in the wine marketing business. In addition to having to wait a long time to receive everything they owe you, other important problems derived from the Stretch Provision is that a part of that salary does go to the NBA common funds, but the player in question, if not part active in the NBA, does not receive those benefits that can be generated. Likewise, someone who lives under this formula but does not play for another NBA team, sees his medical insurance disappear and how all the financial amount entered does not count towards the retirement pension.
The case of Nico Batum: double winner. Just having the Stretch Provision applied to you doesn’t mean you can’t play for another NBA franchise. Ask Nicolas Batum, who is taking advantage of the benefits of his salary stretch while receiving $ 2.5 million from the Clippers in 2020-21. The Frenchman exercised his player option with Charlotte in November for this course and worth 27.1 million. A few days later, the Stretch Provision saw him visit in the form of dismissal by the Hornets, who will pay him that millionaire scattered on the calendar and at a rate of 9 million dollars until the end of 2022-23.
Sign a contract and go to sleep. We said that this standard welcomes all types of profiles. You don’t have to have been a star or played a large number of NBA games to have a remarkably comfortable retirement. Ask Dakari Johnson, to whom the Grizzlies, With those who never got to play! They pay him $ 459,414 a year from 2018 until the end of this course. Johnson, now in China, counts 31 league games, all with the Thunder, and represents a case similar to that of Demetrius Jackson, who wins from Boston for seven years and until 2024 the not inconsiderable figure of $ 93,857 per year: he has played 28 games in the NBA and only 5 of them have been with the Celtics. Troy Williams, currently without a team and who left the big league in 2019 after appearing in 72 crashes, has insured, thanks to the Rockets, $ 122,741 a year until spring 2023. That way he can better cope with being unemployed.
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