MIAMI – When it comes to the NBA personnel calendar, the stretch run for the stretch provision soon will be at hand.
With Aug. 29 the deadline for a team to invoke the “stretch provision” as a means of reducing or eliminating a luxury-tax bill, the Miami Heat soon will face a now-or-later decision.
Under the stretch provision, a team can waive a player and “stretch” his remaining salary on the salary cap over twice the remaining seasons of the player’s contract plus one year.
For example, a player with one year remaining on his contract can have that number stretched over three years.
It is the mechanism the Milwaukee Bucks utilized to waive Damian Lillard as a means to create the needed salary-cap space to sign Indiana Pacers free-agent center Miles Turner.
It also is the mechanism the Phoenix Suns utilized in buying out and waiving Bradley Beal in order to alleviate their position against the tax aprons.
For the Heat, such an approach would not be to create cap space, but rather to move below the luxury tax.
While the Heat’s current position $1.4 million above the luxury tax would require only a nominal tax payment at that figure, it also would leave them in a tenuous position against the NBA’s highly punitive “repeater tax.”
A tax team the past two seasons – which produced the sum total of one playoff-game win – the Heat have indicated intent to move below the tax by the time it is determined after the coming season. A team moves into the repeater tax when it is in the tax for four consecutive years or four times in a five-year period.
The Heat appeared to slide under last season’s tax at last February’s NBA trading deadline, until a portion of the multi-team Jimmy Butler trade fell apart. The Heat later could have potentially moved below the tax by season’s end by waiving Davion Mitchell, who instead helped power the Heat through the play-in round and was rewarded in June with a two-year. $24 million free-agent contract.
The downside of utilizing the stretch provision is that a portion of a player’s salary remains on a team’s books beyond the scheduled expiration year.
The Heat previously have utilized the stretch provision on the contracts of A.J. Hammons in 2018 and Ryan Anderson in 2019. In recent years, Heat players linked to the stretch provision instead have been traded, including Victor Oladipo and Kyle Lowry.
Typically, teams hard up against the luxury tax focus on players with expiring contracts.
For the Heat, three players who do not set up as definitive 2025-26 rotation elements stand as potential candidates.
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Terry Rozier: Due $26.7 million in 2025-26 on the final year of his contract. Can be stretched at $8.9 million over each of the next three seasons.
For a team seeking to move back into the cap-space game possibly as soon as next summer, carrying such a $8.9 million cap hit for the next three seasons would appear counterproductive.
Instead, Rozier’s salary remains in the sweet spot as part of a package for a larger-salaried player, even if Rozier’s productivity does not match his contract.
Relief with Rozier could come at the trade deadline, or possibly with a turn in the federal gambling investigation to which he has been linked.
Simone Fontecchio: Due $8.3 million in 2025-26 on the final year of his contract. Can be stretched at $2.7 million over each of the next three seasons.
From the moment he was acquired in the sign-and-trade deal that sent out Duncan Robinson, Fontecchio has stood as a potential get-out-of-tax card for Pat Riley and the front office.
A Fontecchio waive-and-stretch could start to fit a Heat sweet spot of alleviating the current tax bill, while also not significantly impacting future cap space.
The issue is that the Heat then would need to replace Fontecchio as the 14th player on their roster, thereby adding back to their cap. Such an option could be Dru Smith.
Haywood Highsmith: Due $5.6 million in 2025-26 on the final year of his contract. Can be stretched at $1.9 million over each of the next three seasons.
This would appear to be a highly unlikely scenario, since Highsmith routinely has worked his way into Erik Spoelstra’s rotation and since he as easily could be dealt as a means of offloading his salary, rather than requiring the stretch provision.
