The money remaining on Smith’s contract seems like a hefty guarantee for the Pistons to swallow. Yet, the full amount may not be fully due and owed to Smith within the span of two years. In fact, the Pistons may be able to stretch out payments to Smith based on a clause commonly referred to as the NBA’s stretch provision.
The
current NBA Collective Bargaining Agreement allows any team that waives a player to elect, in writing, that it wishes to have the player’s salary stretched (also referred to in the CBA as “re-attributed”) over a span lasting longer than the term under which the player would have otherwise been paid. This not only diminishes the short-term burden of paying the terminated player as well as his replacement(s), it also helps alleviate the hit that the player’s salary would have on a team’s salary cap.
Because the Pistons put in a request for waivers on Smith between September 1 and June 30, Smith’s post-termination salary for the next two years may be paid evenly over five years (the CBA allows for double the term, plus one season, when a team elects to invoke the stretch provision). However, the Pistons will not be able to apply the stretch provision to Smith’s salary still owed for the current season, which shall remain unchanged.
The stretch provision must be applied within one business day following the termination of a player’s contract. Smith will not officially be terminated from his contractual arrangement with the Pistons until forty-eight hours passes between the time and date that Smith was waived. If no other NBA team claims Smith and assumes his contract over that forty-eight hour span (which includes weekends and holidays), then Smith’s contract is officially terminated and he becomes a free agent.