What is a Stretch and Waive Contract? Here’s How Suns’ Front Office Created $3.65 Million Cap Space by Waiving Nassir Little

What can teams do when faced with a financial crisis? Phoenix Suns The Suns just showed one way to handle the situation. Well over the cap limit with a $219 million salary cap, the Suns had very limited options to improve their roster. However, in a genius move, they waived forward Nassir Little to free up a roster spot and $3.65 million under the salary cap. But this was no ordinary waiver as he still had three years left on his contract. So the Suns had to use the good old Stretch and Waive option.

This clause is typically used when a team needs to reduce its payroll for a given season, either to avoid the luxury tax or to create space under the salary cap. As the name suggests, the Stretch and Waive option, per the collective bargaining agreement, immediately releases the player and extends his expensive contract for an extended period that is typically double the remaining years of his contract plus one more year. And it applies to all players who have more than $250,000 in guaranteed salary remaining on their contract. Therefore, in Little’s case, he will receive the remaining $21 million of his contract divided equally over the next seven years. However, in the original scenario, the Suns owed him $6.75 million for next season, which will now be just $3.1 million.

It was important for the Suns to make their move before August 31, because if they did, they would have been forced to pay Little his full salary for next season and the Stretch and Waive would have only applied to two years of his contract. Additionally, the move makes perfect sense for the team, as the forward wasn’t going to be a major part of the rotation anyway. He was actually added to the Suns roster last year in the three-team trade involving Damian Lillard and Jrue Holiday. However, Little only played in 45 games last season, most of them as a backup, and averaged a career-low 3.4 points.

Don’t worry! The Stretch and Waive clause doesn’t just benefit teams. Even players get the opportunity to test the market as a free agent once they’re released and hopefully join another team right away. So while they’re earning guaranteed money for years with the previous franchise due to the Stretch and Waive clause, they also get to reap the benefits of a new contract with another team. So it’s basically a win-win situation for both parties. And we could see Little in a new uniform very soon because he’s a solid young player with immense potential. It’s important to note that the Stretch and Waive clause wouldn’t have applied if Nassir only had one year left on his contract and the trade happened after September 1st. In that case, the Suns would have been forced to do a full buyout.

How can the Phoenix Suns evolve after Nassir Little’s departure?

After moving past the second apron, the Suns are no longer eligible to bundle salaries in trades or even use the mid-level exception to add a high-salary star to the team. Of course, their only remaining option might be to rely on their rookies. And it seems like they plan to do that with Little gone, as they are reportedly very impressed with the progress of rookies Oso Ighodaro and Ryan Dunn. With an open roster spot, they could use either of those youngsters to play a major role in their rotation.

Surprisingly, neither rookie was selected by the Suns on draft night. As for Dunn, he was selected 28th overall by the Nuggets and Oso was selected in the second round by the Blazers. However, both were traded to Phoenix shortly after their selection. Playing two years at Virginia, Dunn averaged 8.1 points and nearly seven rebounds in his sophomore season. Additionally, the point guard impressed in Summer League, averaging 5.8 points in four games. But what caught everyone’s attention was his elite defense, with 1.5 blocks and 1.3 steals per game.

Oso is a seasoned veteran, having spent four years at Marquette and averaging 13.4 points and nearly seven rebounds his senior year. And he continued to dominate Summer League, averaging 7 points and six rebounds. What was also notable was his playmaking skills and ability to make his teammates better, as he dished out 4.2 assists per game. And his 6-foot-10 frame helped him play solid defense and add more than a steal and a block each night. While the Suns don’t need much scoring because they already have Devin Booker, Kevin Durant and Bradley Beal to take care of that, they could use the young legs of Dunn and Oso on defense. And that option only opened up thanks to Nassir Little’s stretch-and-waive contract.

Before you go, don’t forget to watch this crossover between BG12 and Georgia Bulldogs star Asia Avinger