There’s been some chatter this morning on Twitter revolving around the stretch provision, so I thought I’d give everyone a quick explanation.
The stretch provision allows for teams to cut a player, then “stretch” out his contract for two times the remaining length, plus one additional year. As an example, let’s use Jeremy Lin.
Jeremy Lin’s deal – either paid for by the Knicks or the Rockets – will pay him $25.1 million over three years. The first two years, valued around $5 million each, are salaries to pay, but the third year’s “poison pill” of $15 million has given the Knicks fits. If Jeremy Lin is a complete bust, the Knicks could cut him after year two, and stretch out his contract two years. Under such a circumstance, the Knicks would have three-years to pay Jeremy Lin the remaining $15 million of his deal, allowing them to pay $5 million a year to the released Lin.
The stretch provision is only applicable to contracts signed under the new CBA, so for the Knicks, Jason Kidd, Raymond Felton, Marcus Camby, Steve Novak, as well as Jeremy Lin’s deal would all be eligible.
Now, I do not think the stretch provision is the best way to deal with Lin if he proves to not be worth the money, because as I’ve noted before, his $15 million expiring contract will be one of the most tradable expiring deals in the history of the NBA.