Milwaukee Bucks: The dangers of using the stretch provision

MILWAUKEE, WI - MARCH 04: Spencer Hawes
MILWAUKEE, WI - MARCH 04: Spencer Hawes /

The stretch provision may seem like an easy way out of a bad contract, but the Milwaukee Bucks should be careful about using it poorly.

As any Milwaukee Bucks fan who keeps a careful eye on Milwaukee’s signed contracts may know, the Bucks are currently about $1.8 million over the luxury tax line for the upcoming season, meaning the Bucks will be paying the tax if the team doesn’t cut salary.

That’s a not-good thing for a few reasons, the most important for basketball reasons being that the Bucks lose a ton of flexibility if they stay in the tax. Tax-paying teams get a smaller mid-level exception and have a tough time adding players, even through trades, because of how salaries have to match.

Additionally Milwaukee’s owners don’t want to pay gobs and gobs of money because the Bucks have guys like Mirza Teletovic and John Henson on eight-figure deals. That factors into this quite a bit as well.

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Whether it be for basketball reasons, financial reasons, or both, the Bucks do not want to pay the tax this season. That’s a good idea, but a harder one to realize than it may seem. Waiving the non-guaranteed deal given to Gary Payton II gets Milwaukee very close, but they’d still be over the tax, plus without a 15th player or third point guard.

One solution that’s often floated is to simply waive, and stretch, Spencer Hawes. For anybody who doesn’t know, when a player is waived under normal circumstances the team doing the waiving has to simply pay out the rest of their contract as signed, since most NBA deals are guaranteed.

Hawes is no exception, so if he were waived normally Milwaukee would still owe him $6 million, which doesn’t help at all in avoiding the tax. Hawes could accept less money in a buyout, but considering the dry market for NBA centers (Nerlens Noel is still a free agent!) he has no incentive to facilitate his own release.

The reason that waiving Hawes could get the Bucks under the tax is because the team can stretch him. That means the rest of the money he’s owed gets paid over double the seasons his contract has left, plus one. Since Hawes has a year left on his deal, he’d get his $6 million split over three years.

That takes $4 million off of the Bucks cap hit right now for this season, bringing Milwaukee about $2 million below the tax mark. Yay! This is a no-brainer, right?

Well, not so much. Each time a player is stretched it offers immediate relief, in exchange for less cap space down the line. As easy as it may be to say that $2 million isn’t that much, remember that the Bucks are roughly $1.8 million over the tax, putting them in this situation to begin with.

Hawes’ stretched salary wouldn’t be the only dead money on the Bucks cap, either. Larry Sanders was stretched in 2015, and the Bucks will be paying him $1.8 million for the next five years, money that counts against their cap space.

Now add in Hawes’ dead money as well, and Milwaukee is out nearly $4 million annually for the next three seasons. That could end up being annoying at best and seriously harmful to the Bucks’ flexibility down the road at worst.

As Giannis Antetokounmpo gets older — and closer to potentially hitting unrestricted free agency — winning becomes more of a priority. That leads to increased importance on adding pieces around Giannis, pieces that are easier to add if less money is already on the books.

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Again, it’s oh-so-easy to brush off $2 million in dead money as inconsequential. Until the Bucks end up giving up a real asset, like a draft pick, to get off of a bad contract and avoid the tax, a place they wouldn’t be in if Larry Sanders’ old deal wasn’t counting against Milwaukee.

Every little bit matters when it comes to the salary cap. The Bucks were #blessed to get off of Miles Plumlee‘s deal for nothing. With how little money remains around the NBA, don’t expect the same to happen with Henson, Teletovic, or Hawes.

As important as it is to get under the tax, it’s not worth stretching any of those players. Giving up a draft pick hurts, but it’s the price that has to be paid to get off a contract these days.

Next: Just how good can Giannis get?

Milwaukee has until the trade deadline in February to get under the tax without having to resort to the stretch provision — the Bucks should use every second of that time to find a way out of tax territory without giving up future cap space.