Avoiding the stretch provision
In a tight free agent market, few teams possessed salary cap space to absorb such a large deal. After almost three weeks of unsuccessfully searching for a trade deal, the Thunder appeared to be heading toward a buy-out.
The biggest issue with the stretch provision is it may provide temporary salary cap relief but the cap hit transforms into dead money. This money cannot be moved, stretched or traded, remaining a liability over a number of years. In Melo’s case, the OKC Thunder would’ve been on the books for $9.3 million for the next three seasons with no opportunity to use it. While OKC were on track for a $107-million-dollar saving, the Thunder would sacrifice future flexibility.
Some argue that Melo’s $9.3 million through to 2020-21 is lesser than Schroder and TLC’s combined $17 million salary due this year, $18 million in 2019-20 and $15.5 million in 2020-21. But Anthony’s hit is again dead money. With the salary cap set to rise to $108 million in 2019-20 and $116 million 2020-21, the luxury tax is lower had the salary cap remained stable over the next three years.