FanPost

Details and Impact of 76ers Trade v. Stretch Provision

Some fans do not understand the NBA's stretch provision and/or the players the Kings could have signed this summer using that provision. Other than my assumption that the Kings could have found one team to take Stauskas off their hands for nothing in the summer of 2015, the following (except for the last paragraph) is just the application of math to the terms of the collective bargaining agreement.

Under the CBA's stretch provision, teams can waive a player and then stretch out his contract for cap purposes for double the length of the remaining years on the contract plus one year.

This summer, Carl Landry was scheduled to make $6,500,000 for the 2015-2016 season, and he had $13,000,000 and two years remaining on his contract. Jason Thompson was scheduled to make $6,431,250 this season, and he had $13,256,250 and two year remaining on his contract. Nik Stauskas was scheduled to make $2,869,440 this season.

To clear cap space, the Kings traded Landry, Thompson, and Stauskas to the 76ers for: the right to swap first round picks in 2016; the right to swap picks in 2017; and a first round pick that is top 10 protected for 2018 and unprotected in 2019.


Instead of making the 76ers trade, the Kings could have used Option B:

  • traded away Stauskas for nothing in return (sending him to a team with cap space for a top 55 protected second rounder or the rights to an unwanted prospect selected in the second round several years ago);
  • stretched both Landry and Thompson over 5 years with a total cap hold of $5,251,250 per season;
  • waived David Stockson’s contract that was already on the books.

IMPACT OF THE 76ERS TRADE ON THE 2015-2016 SEASON

If the Kings dumped Stauskas and stretched Landry and Thompson, they could have signed everyone currently on the Kings. Everyone.

2015-2016

Cousins

$15,851,950

Gay

$12,403,101

Collison

$5,013,559

Cauley-Stein

$3,398,280

McLemore

$3,156,600

Landry (stretched)

$2,600,000

Thompson (stretched)

$2,651,250

Ellington (stretched 2014)

$923,780

Rondo

$9,500,000

Belinelli

$6,060,606

Kufos

$7,700,000

Total Salary

$69,259,126

NBA Salary Cap

$70,000,000

Therefore, after stretching Landry and Thompson and moving Stauskas, the Kings would have had the cap space to sign Rondo, Kufos, and Belinelli to their current deals.

Next, the Kings exercised their right to exceed the cap with the Room Exception and minimum contracts. Casspi was signed with the Room Exception and Butler, Anderson, Acy, Curry, Morland, Dukan, and Henderson were signed to minimum deals. All of those players were available to the Kings under both the 76ers trade and using the stretch provision.

Therefore, after electing to do the 76ers trade instead of Option B, Kings did not spend any additional salary on the 2015-2016 season that was not otherwise available to them using Option B. Accordingly, it is not accurate to say that Vlade needed to make the 76ers trade to sign Rondo, Kufos, Belinelli, and Casspi.

As long as the math holds and the Kings do not swap picks with the 76ers in the 2016 draft, the adage "nothing lost, nothing gained" currently applies to Vlade’s decision not to use the stretch provision this year.

IMPACT OF THE 76ERS TRADE GOING FORWARD

The Kings did free up $5,251,250 over each of the next four seasons by not using Option B. Because the NBA’s salary cap explodes, the dead weight from Landry and Thompson’s stretched contracts would have accounted for approximately 5% of the Kings’ salary cap space in summers of 2017, 2018, 2019, and 2020. During those four years, the Kings will convey a first round pick to the 76ers and could also swap picks in the 2017 draft.

2016-2017

2017-2018

2018-2019

2019-2020

Landry (stretched)

$2,600,000

$2,600,000

$2,600,000

$2,600,000

Thompson (stretched)

$2,651,250

$2,651,250

$2,651,250

$2,651,250

$5,251,250

$5,251,250

$5,251,250

$5,251,250

Projected Salary Cap

$89,000,000

$108,000,000

$100,000,000

$102,000,000

Percent of Cap to Stretch

6%

5%

5%

5%

Compensation to 76ers

Right to swap picks

Either none or pick 11-30

Either none or pick 1-30

None

The impact of the 76ers trade will ultimately be measured by the pick(s) the Kings convey and/or the moves they make to avoid surrendering a top five pick to the 76ers. If the Kings do not swap picks in 2017 and convey a middle of the road first round pick in 2018, I suppose you could justify caring a ton of risk to open up a relatively modest amount of cap space by trading picks instead of using the stretch provision. The risk of injuries, the possibility or needing to reshape the roster before 2018, and frankly the Kings being the Kings over any of the next three seasons should have raised some red flags for an experienced GM. Another variable is what the Kings end up doing with their last $5,000,000 of cap space in the summers of 2017 and 2018. If they spend that on a non-impact player or extend somebody on the roster, the Kings took on a lot of risk without gaining much benefit. Finally, Demarcus Cousins’ contract expires in the spring of 2018 and the Kings could owe the 76ers an unprotected lottery picks the following year. If the Kings reach the conclusion that they need to trade Cousins to prevent him from leaving as a free agent, they should probably consider taking a package that includes high draft picks and/or talented young players. But, that approach would typically lead to considerable losses for the Kings and a very high 2019 draft pick for the 76ers, which could lead the Kings to deal Cousins for a package centered instead around veteran player(s) with at least two more years on their contracts. While the last factor has a number of variables, the odds Sacramento conclude that they should trade Cousins but fail to take the best offer over the long haul based upon the risk of conveying a top 5 pick to the 76ers is neither remote nor inconsequential. All of that would have been avoided by using the stretch provision.

(This is a FanPost from a member of the Sactown Royalty community. The views expressed come from the member, and not Sactown Royalty staff.)