Using the Stretch Provision on Eric Gordon

[MichaelMcNamara]

The way I see it, Eric Gordon and his contract MUST be gone by next summer at the latest. As I discussed in a previous post, the summer of 2015 has a great FA class and it is the last summer that the Pels can sign someone before Anthony Davis's max contract hits the books.

Trading him for an expiring this summer would be ideal, followed closely by letting him play and having him opt out next summer. If neither of those things happen, there is a third option -- The Stretch Provision. I take a look at that option and its pros and cons in detail here:

http://www.bourbonstreetshots.com/20...g-eric-gordon/

Curious to hear your thoughts.

[pawel]

great read as usual...

has this stretch provision been used by any other NBA team? since the newCBA 'arrived'

good to have one more hope. it is better to have 5 than 15 in dead money...

[MichaelMcNamara]

Lakers might use it on Nash this summer. Otherwise, it hasn't been used yet - mostly because teams could use the amnesty, which is better, but we can't use that on Gordon.

And just to be clear, there will still be $15 mil in dead money, it will just be spread out over three years as opposed to all being on the books in 2015-16

[ml wave]

What's the deadline to use the stretch provision? Can't just be before the season starts, right?

[BP225]

The real problem is what do you do this season. If you add someone with the MLE, that eats a pretty significant amount of the cap space you would gain by stretching Gordon. Maybe you can get an older guy like Richard Jefferson to take a 1 year, $5 million (MLE) deal.

[BP225]

What's the deadline to use the stretch provision? Can't just be before the season starts, right?

You have to stretch a player between July 1st and August 31st. After that you're on the hook for the current year and then the stretch starts the following contract year. August 31st should allow plenty of time to explore FA options and decide if you need to stretch Gordon or you're stuck with him.
http://www.cbafaq.com/salarycap.htm#Q64

[AD23forMVP]

Anything to get him gone. I was thinking how nice it would be to get two separate wing players with that money, one d and three guy (like a PJ Tucker) and another more offensive minded shooter who can also put it on the floor a little (like we saw Gerald Green do last night).

BTW, not that it matters because he is a proven commodity, but there is no shot he is 6'6 or even 6'5. This may sound funny, but Eric Bledsoe and Ish Smith are listed in the 6'0 to 6'1 range, and Tucker wasn't very much taller than either of them.

[da ThRONe]

First and foremost great find and well written report by MM. I don't think the guys over at BBS get enough credit for what they do especially MM.

Next I really hate the over complex nature of the NBA's CBA. The poison pills, RFA, max salaries, and these stretch provisions. It really unnecessary(although this could work to our advantage).

As far as the article I don't see it being a option at least not for Dell. He'll be gone by then if the team hasn't found an answer for Gordon before next year. Whether that answer is trading him or a drastic increase in his play. Demps IMO won't make it to 2016 with the "current" Gordon on this roster.

[MichaelMcNamara]

The real problem is what do you do this season. If you add someone with the MLE, that eats a pretty significant amount of the cap space you would gain by stretching Gordon. Maybe you can get an older guy like Richard Jefferson to take a 1 year, $5 million (MLE) deal.

That would be my plan - bring Smith and Morrow back for a year, let Aminu and Stiemsma walk and add one or two guys on small deals like a Jordan Hamilton or an Emeka Okafor. Prove it guys. Maybe Granger takes 1 yr/5 mil if you promise him the starters role so he can earn a bigger deal the following year.

Honestly, if the Core 4 is healthy, this should be a playoff team without much outside improvement. Withey and Rivers gets better, maybe Pierre gives you a spark. AD takes another leap forward. But yeah, be conservative this year and hold out for the '15 class

[MichaelMcNamara]

First and foremost great find and well written report by MM. I don't think the guys over at BBS get enough credit for what they do especially MM.

Next I really hate the over complex nature of the NBA's CBA. The poison pills, RFA, max salaries, and these stretch provisions. It really unnecessary(although this could work to our advantage).

As far as the article I don't see it being a option at least not for Dell. He'll be gone by then if the team hasn't found an answer for Gordon before next year. Whether that answer is trading him or a drastic increase in his play. Demps IMO won't make it to 2016 with the "current" Gordon on this roster.

Appreciate the love. And I agree with that, IF the Pels don't make the playoffs next year. But I think they can with the Core 4 back, plus Gordon, Morrow, Rivers, Smith, Withey, Ajinca, and one or two guys on one year deals. They will need health and some internal improvement, but if they make the playoffs and Dell is coming off a playoff year with a chance to ad another significant piece, I think he gets brought back.

No playoffs, and they are both gone though IMO. So it's a risk. Can you hold off on making a move for a year when your job is personally at stake? This is where I hope the communication is good between Demps and Loomis. Can Demps go to Loomis and show him this plan and get Mickey to sign off? That's something I can't know, but I would love to find out.

[Mythrol]

I did some digging because I was curious if we stretched Gordon's contract what would happen if another team signed him. Apparently it still works as a normal waiver. Here's the quote to explain it:

"If another team signs a player who has cleared waivers, the player's original team is allowed to reduce the amount of money it still owes the player (and lower their team salary) by a commensurate amount. This is called the right of set-off. This is true if the player signs with any professional team -- it does not have to be an NBA team. The amount the original team gets to set off is limited to one-half the difference between the player's new salary and the minimum salary for a one-year veteran (if the player is a rookie, then the rookie minimum is used instead)."

So basically we waive Gordon and stretch his contract for 3 years at just over 5m/yr (5.17) hit. If he signs a 5m/yr 3 yr deal then we'd take 5m minus the vet min (let's round to 750k). Gives us 4.25m and then divide that by 2. Meaning we could take 2.12m off his cap hit.

I honestly feel there's a good chance that Gordon could get a 5m/yr deal. So now we look at his cap hit as 3m/yr for 3 years. To me that is completely worth it. If we can't trade him for an expiring then I'd be very careful about what I'd be willing to take back especially when his cap hit will be reduced when he signs to another team. After doing the research and see what options we have, I feel MUCH more confident that we will be able to get a great player in 2015.

[da ThRONe]

Appreciate the love. And I agree with that, IF the Pels don't make the playoffs next year. But I think they can with the Core 4 back, plus Gordon, Morrow, Rivers, Smith, Withey, Ajinca, and one or two guys on one year deals. They will need health and some internal improvement, but if they make the playoffs and Dell is coming off a playoff year with a chance to ad another significant piece, I think he gets brought back.

No playoffs, and they are both gone though IMO. So it's a risk. Can you hold off on making a move for a year when your job is personally at stake? This is where I hope the communication is good between Demps and Loomis. Can Demps go to Loomis and show him this plan and get Mickey to sign off? That's something I can't know, but I would love to find out.

As you know I'm not a fan of Dell Demps however it's completely unwise to ever have the main decision maker at any point in his tenure ever feel like he doesn't have the full support of his bosses. Hopefully Benson and Loomis has assured Demps that he has there support. This is why as much as I loved Benson purchasing the team when he came out and said he wants to make the Pelicans to playoff contenders ASAP I thought it showed his ignorance for how things are done in the NBA.

As far as the team making a playoff push next year if healthy it should. I just think we ultimately have too many good teams to contend with and too many holes we won't have the cap space to fill to actually make it. Of course things change and this team certainly has the talent for things to "click". I just don't see enough on the defensive side. We have no post defenders(unless Withey makes a good leap this off-season) and we don't have that wing defender(and this is with us losing the only guy in Aminu who looks to have the potential to be that wing defender).

This is why I stress patience not that we are an old team. We are a team with a lot financially invested already with another big investment expected to be made in the next couple of years.

[Mythrol]

That would be my plan - bring Smith and Morrow back for a year, let Aminu and Stiemsma walk and add one or two guys on small deals like a Jordan Hamilton or an Emeka Okafor. Prove it guys. Maybe Granger takes 1 yr/5 mil if you promise him the starters role so he can earn a bigger deal the following year.

Honestly, if the Core 4 is healthy, this should be a playoff team without much outside improvement. Withey and Rivers gets better, maybe Pierre gives you a spark. AD takes another leap forward. But yeah, be conservative this year and hold out for the '15 class

If Ariza says he'll take a 4yr MLE do you pass on that? I don't know that he would with how he's playing this year but if he was willing to sign it, I don't see how you pass on him. While I'm all for going into next offseason season with as much cap as possible, I think some players are worth locking up long term with the MLE.

[MichaelMcNamara]

I will have an article up next week, but long story short, the history of guys getting signed to a three or four MLE contract is not good. Remember Posey?

PJ Tucker or Thabo on three year deals would be hard for me to say no to. Spencer Hawes too. But I just think Demps can pluck guys like Morrow every year. I would prefer to get one more big piece and try to find guys on much smaller deals to give you 80 percent of what Ariza does.


Sent from my iPhone using Tapatalk

[All Metro]

So is this similar to a restructure in the NFL?

[MichaelMcNamara]

I did some digging because I was curious if we stretched Gordon's contract what would happen if another team signed him. Apparently it still works as a normal waiver. Here's the quote to explain it:

"If another team signs a player who has cleared waivers, the player's original team is allowed to reduce the amount of money it still owes the player (and lower their team salary) by a commensurate amount. This is called the right of set-off. This is true if the player signs with any professional team -- it does not have to be an NBA team. The amount the original team gets to set off is limited to one-half the difference between the player's new salary and the minimum salary for a one-year veteran (if the player is a rookie, then the rookie minimum is used instead)."

So basically we waive Gordon and stretch his contract for 3 years at just over 5m/yr (5.17) hit. If he signs a 5m/yr 3 yr deal then we'd take 5m minus the vet min (let's round to 750k). Gives us 4.25m and then divide that by 2. Meaning we could take 2.12m off his cap hit.

I honestly feel there's a good chance that Gordon could get a 5m/yr deal. So now we look at his cap hit as 3m/yr for 3 years. To me that is completely worth it. If we can't trade him for an expiring then I'd be very careful about what I'd be willing to take back especially when his cap hit will be reduced when he signs to another team. After doing the research and see what options we have, I feel MUCH more confident that we will be able to get a great player in 2015.

All very true. Didn't know whether to include that in the piece because I didn't want to bore people with math, just wanted to get the main premise out.

Also, it looks like the team can choose how to spread the cap hit. We will have Larry Coon on the podcast this summer to break this down more, along with other things



Sent from my iPhone using Tapatalk

[MichaelMcNamara]

So is this similar to a restructure in the NFL?

No, in a restructure, the player stays. Here Gordon would be gone. Probably most similar to designating a player a post June 1st cap casualty - in that you can spread the remaining guarantees money over multiple years


Sent from my iPhone using Tapatalk

[Mythrol]

All very true. Didn't know whether to include that in the piece because I didn't want to bore people with math, just wanted to get the main premise out.

Also, it looks like the team can choose how to spread the cap hit. We will have Larry Coon on the podcast this summer to break this down more, along with other things



Sent from my iPhone using Tapatalk

While I agree that the math can be boring, I think it's an important piece to how I feel about stretching Gordon's salary. If there is a potential to have the cap hit reduced to around 3M over the 3 years that makes me feel even better about doing it and changes what type of contracts I take back.

As far as choosing how to spread the cap hit out, I couldn't find anything specific. I only found these two quotes:

"A team is not permitted to stretch the team salary charge if in any future season the team salary charges for all the team's waived players (and other former players) would add up to more than 15% of the salary cap for the season in which the player is waived. For example, if a player is waived in 2011-12, the team cannot elect to stretch the player's team salary charge if the sum of the team salary charges for all of its waived players in any future season would exceed $8,706,600 (15% of the salary cap in 2011-12). Teams are not allowed to stretch only a portion of a waived player's salary, either to conform to the 15% limit, or for any other reason."

"If the player is waived from July 1 to August 31, then his remaining salary is paid over twice the number of years remaining on his contract, plus one. For example, if the player is waived on August 1 with two seasons remaining on his contract at $10.2 million and $10.3 million, respectively, then his remaining salary is paid over five years (two seasons times two, plus one), in even amounts of $4.1 million per year."

The first quote makes it sound like you can't choose how to stretch it and the second one says it's stretched in even amounts. I'm sure someone with more understanding can clear this up, but it appears that you can't choose how to split it.

[MichaelMcNamara]

But if you waive him July 1st and he doesn't sign until August 4th, what does he count for in the meantime? And how can that just change after the fact?

My understanding is that you can stretch it UP TO three years. And you can take a bigger hit in first year. Still waiting on clarity from Coon and will discuss more on Sundays pod.

Just didn't want to get into that part because it is speculative. What if he goes to a contender for min because he is already getting paid? Or what if he is injured seriously and nobody signs him?

Wanted to lay out worst case scenario. But yes, it can get better


Sent from my iPhone using Tapatalk

[BP225]

For most players this wouldn't be a huge deal, but for Gordon and his trade value...

Gordon will undergo arthroscopic surgery on his left knee next week and is expected to make a full recovery.

http://www.nba.com/pelicans/news/pel...y-update-41014

[saintsinNO]

For most players this wouldn't be a huge deal, but for Gordon and his trade value...


http://www.nba.com/pelicans/news/pel...y-update-41014

Wow. I've tried to even defend the guy some, but he is beyond a joke right now. I don't know how he sleeps at night with all the money he steals.

[greewe]

I did some digging because I was curious if we stretched Gordon's contract what would happen if another team signed him. Apparently it still works as a normal waiver. Here's the quote to explain it:

"If another team signs a player who has cleared waivers, the player's original team is allowed to reduce the amount of money it still owes the player (and lower their team salary) by a commensurate amount. This is called the right of set-off. This is true if the player signs with any professional team -- it does not have to be an NBA team. The amount the original team gets to set off is limited to one-half the difference between the player's new salary and the minimum salary for a one-year veteran (if the player is a rookie, then the rookie minimum is used instead)."

So basically we waive Gordon and stretch his contract for 3 years at just over 5m/yr (5.17) hit. If he signs a 5m/yr 3 yr deal then we'd take 5m minus the vet min (let's round to 750k). Gives us 4.25m and then divide that by 2. Meaning we could take 2.12m off his cap hit.

I honestly feel there's a good chance that Gordon could get a 5m/yr deal. So now we look at his cap hit as 3m/yr for 3 years. To me that is completely worth it. If we can't trade him for an expiring then I'd be very careful about what I'd be willing to take back especially when his cap hit will be reduced when he signs to another team. After doing the research and see what options we have, I feel MUCH more confident that we will be able to get a great player in 2015.

We stretch Gordon. He clears waivers. Benson donates $32.25m cash to an international team. International team signs Gordon for 3/$32.25. Gordon does it because that's far more than he'd get in the NBA.

($10.75m/year-$750k vet min)/2=$5m, bringing Gordon's cap hit to nothing.

Marc Gasol, impressed by Dell Demps' creativity, signs with the Pelicans. We win titles.

DO IT BENSON.

[MichaelMcNamara]

LOL


Sent from my iPhone using Tapatalk

[Mythrol]

But if you waive him July 1st and he doesn't sign until August 4th, what does he count for in the meantime? And how can that just change after the fact?

My understanding is that you can stretch it UP TO three years. And you can take a bigger hit in first year. Still waiting on clarity from Coon and will discuss more on Sundays pod.

Just didn't want to get into that part because it is speculative. What if he goes to a contender for min because he is already getting paid? Or what if he is injured seriously and nobody signs him?

Wanted to lay out worst case scenario. But yes, it can get better


Sent from my iPhone using Tapatalk

Here's the exact quote:

"If the contract or extension was signed under the current CBA, the remaining guaranteed salary is paid over twice the number of remaining years, plus one, per the Stretch provision:

If the player's salary payments are spread-out using the Stretch provision, the team may elect to stretch the salary cap charge to match. For example, if two seasons remain on the player's contract when he is waived, and the payment is spread-out over five years per the Stretch provision, then the team may elect to spread-out the salary cap hit over those same five years."

The way I read it is you can either cut the player and take the whole cap hit through the contract OR you can choose to use the stretch provision. But if you use the stretch provision then the only way it can be assessed is twice the number of years plus one.

As far as what his cap hit is between the time he is cut and then signed elsewhere, that's easy. He will be 5.17m over 3 years until he signs elsewhere. It's no different than when Miami signed Lewis. He counted his entire cap holding against us until he signed with them. Once he signed then his cap hit is adjusted. This is standard for anyone cut. Davis and Granger both had the same thing happen with them this year.

Yeah, Gordon might sign for a vet minimum on a contender but honestly he doesn't seem like he's the type of guy willing to take a smaller role as a backup. I think he wants to go somewhere and be a main guy and be a starter and get paid. Maybe his injuries have changed him, but I don't see it.

[Mythrol]

We stretch Gordon. He clears waivers. Benson donates $32.25m cash to an international team. International team signs Gordon for 3/$32.25. Gordon does it because that's far more than he'd get in the NBA.

($10.75m/year-$750k vet min)/2=$5m, bringing Gordon's cap hit to nothing.

Marc Gasol, impressed by Dell Demps' creativity, signs with the Pelicans. We win titles.

DO IT BENSON.

I have no idea if this is legal or not, but, MAKE IT HAPPEN LOOMIS!