In a startling move reshaping their immediate future, the Milwaukee Bucks recently waived nine-time All-Star guard Damian Lillard. This wasn’t just a simple transaction; it was a complex, high-stakes financial maneuver leveraging a specific NBA salary cap tool known as the “stretch provision.” The decision, particularly given the substantial guaranteed money remaining on Lillard’s contract, immediately became the talk of the league, raising critical questions about the Bucks’ financial health and their strategy for building a championship contender around superstar Giannis Antetokounmpo. Understanding the mechanics of the stretch provision and its specific application to Lillard is essential to grasping the significant short-term gains and considerable long-term costs the Bucks have embraced.
What is the NBA Stretch Provision?
The NBA’s stretch provision is a mechanism teams can utilize when they release a player who still has guaranteed salary owed to them. Normally, the remaining cap hit is spread over the original length of the contract. However, by using the stretch provision, a team can take that total remaining guaranteed amount and distribute it over a significantly longer period. This offers immediate relief from the salary cap and luxury tax constraints, creating instant financial flexibility. The trade-off is that the waived player’s salary, now considered “dead money” because it’s paid to someone no longer on the active roster, remains on the team’s books for an extended time.
The formula governing the stretch period is defined by the collective bargaining agreement. To calculate the new duration, a team doubles the number of years remaining on the player’s contract at the time of the waiver and then adds one year. The total remaining guaranteed salary is then divided into equal annual installments spread across this newly calculated, extended period. This mechanism provides a clear path for teams needing quick cap relief but binds them to salary obligations years into the future.
Stretching Damian Lillard’s Contract: The Math
Applying the stretch provision to Damian Lillard’s situation is straightforward based on the NBA’s formula. When the Milwaukee Bucks waived him on July 2, 2025, Lillard had two years remaining on his substantial contract. Using the established calculation, the stretch period becomes (2 years 2) + 1 year, totaling five years.
This means Lillard’s remaining guaranteed salary would not be paid and accounted for over just two seasons. Instead, it will be spread out equally over the next five seasons. This commitment impacts the Bucks’ salary cap through the 2029-30 NBA season, a considerable horizon in professional sports. The mechanism provides a longer runway for cap management but keeps a piece of the past tethered to future flexibility.
Lillard’s Remaining Salary and the Stretched Figure
At the time of the waiver, Damian Lillard was owed a significant sum: $112,583,106 over the final two years of his contract. Had the Bucks not utilized the stretch provision, this amount would have counted against their salary cap roughly divided over just the 2025-26 and 2026-27 seasons.
By opting for the stretch, the team took that total guaranteed amount ($112,583,106) and divided it by the calculated five-year stretch period. This results in an annual dead cap hit of approximately $22,516,603 for each of those five seasons. This roughly $22.5 million figure replaces the original, higher annual cap hits that would have been associated with Lillard’s contract under its original two-year structure. While a substantial sum, this lower annual figure provided the immediate cap space Milwaukee desperately needed.
A crucial rule regarding the stretch provision is that the annual stretched amount cannot exceed 15% of the league’s salary cap for that particular season. Reports indicate Lillard’s annual $22.5 million hit is just below this threshold for the initial 2025-26 season. With the NBA salary cap projected to continue rising in subsequent years, partly fueled by new media rights deals, this percentage relative to the growing cap will naturally decrease over time, making the financial figure less impactful relative to the total cap space available in later years of the stretch.
Why Milwaukee Chose This Aggressive Path
Waiving and stretching a player of Damian Lillard’s stature and contract size is highly unusual and represents the largest amount ever stretched in NBA history, significantly surpassing the previous record held by the New York Knicks stretching Joakim Noah’s remaining $37.8 million in 2018. So, what drove the Bucks to take such a drastic measure?
A major factor was Lillard’s health. He suffered a torn Achilles tendon in April 2025 during the playoffs and faced a lengthy recovery. He was expected to miss most, if not all, of the upcoming 2025-26 season. Carrying a cap hit equivalent to a superstar for a player unable to contribute was likely deemed unsustainable for a team focused on winning now. NBA analyst Brian Windhorst drew a comparison to the Cleveland Browns’ handling of Deshaun Watson’s contract, highlighting the “mortgage” on the future this type of move represents.
The Bucks are operating under immense pressure to maximize their championship window centered on superstar Giannis Antetokounmpo. They couldn’t afford a “gap year” where a significant portion of their cap was tied up in an injured player, limiting their ability to improve the roster immediately. Stretching Lillard’s contract provided the necessary salary cap space to actively retool the roster around Antetokounmpo for the 2025-26 campaign. Furthermore, using the stretch allowed the Bucks to retain valuable future draft assets that would almost certainly have been required to trade Lillard, especially given his injury status. This decision prioritized present flexibility and asset retention over future cap cleanliness.
Immediate Cap Relief and Roster Overhaul
The most immediate and significant benefit of stretching Damian Lillard’s contract was the salary cap relief generated. By replacing the original, higher annual cap figures with the stretched $22.5 million annual hit, the Bucks created approximately $23-24 million in instant cap savings. This was the primary objective and directly influenced their subsequent moves.
This newly available cap space was strategically crucial. It directly enabled the Bucks to pursue and successfully sign free agent center Myles Turner to a reported four-year, $107 million contract. Turner, a highly regarded two-way player, is seen as a younger, more athletic replacement for long-time center Brook Lopez, who departed in free agency. Turner’s projected first-year salary, reported around $24.8 million, fits comfortably within the cap space opened by the Lillard stretch and related maneuvers. This high-profile signing would have been impossible without the cap flexibility created by stretching Lillard.
Beyond the Turner signing, the created cap space and the transition to operating as a “cap room” team allowed the Bucks to make several other important roster additions under different rules. They utilized the Room Midlevel Exception (valued at approximately $8.8 million) to sign free agents Kevin Porter Jr. and Gary Trent Jr., splitting the exception between them. Minimum contracts were strategically used to bring in experienced veterans like Taurean Prince, Gary Harris, and Jericho Sims. Smaller salary maneuvers were also necessary to reach the final cap figure needed for Turner, including trading Pat Connaughton for Vasilije Micic, whose expected return to Europe likely facilitated a buyout and further small cap savings, and pulling Ryan Rollins’ qualifying offer. The team also had to renounce the rights to various free agents to clear their cap holds, replacing them with minimum cap holds for empty roster spots.
The Long-Term Cost: A Five-Year Dead Money Anchor
While the short-term cap relief provided by the stretch provision was substantial and directly enabled key roster additions, it comes with a significant, unavoidable long-term consequence. The Milwaukee Bucks are now committed to carrying Damian Lillard’s annual $22.5 million dead cap hit for the next five seasons, stretching through the summer of 2030.
This fixed cap figure represents salary being paid to a player who is not on the roster and will not contribute to the team’s performance. Unlike the contract of an active player, this stretched dead money amount is essentially static; it cannot be easily renegotiated, traded, or removed from the salary cap ledger. It represents a hard financial commitment that will consume a portion of the team’s salary cap space every single year for half a decade. NBA analyst Brian Windhorst colorfully described the move as “robbing Peter’s 401K to pay Paul’s loan shark bill,” emphasizing the severity of the long-term financial strain.
This extended obligation will inevitably impact the Bucks’ future cap flexibility. While a rising salary cap will lessen the percentage impact over time, $22.5 million remains a considerable figure, often equivalent to a starter’s or key rotation player’s salary. This amount will continuously reduce the space available for signing future free agents, extending core players, or taking on salary in potential trades. The move is a clear demonstration that the Bucks heavily weighted immediate opportunity over maintaining future cap cleanliness.
Lillard’s Future and the Set-Off Rule
A common question arises regarding the impact if Damian Lillard signs with another NBA team after being waived and stretched by the Bucks. Does his new contract reduce what Milwaukee owes or how it affects their cap?
Under NBA rules, if a waived player with a stretched contract signs with a new team, the original team receives a “set-off.” However, it is crucial to understand that this set-off only impacts the luxury tax calculation, not the team’s salary cap space itself. The Bucks’ $22.5 million annual dead cap hit remains fixed regardless of where Lillard signs or for how much.
The set-off amount is calculated at the end of the regular season. It equals the player’s new salary minus the NBA’s one-year veteran minimum salary for that season. For a player like Lillard with over 10 years of experience, his veteran minimum salary is approximately $3.6 million (higher than the standard minimum of around $2.05 million). If Lillard were to sign elsewhere for the veteran minimum, the maximum potential set-off for the Bucks would be the amount of his new salary above $3.6 million, effectively reducing their luxury tax bill by that small difference. Any amount Lillard signs for above his veteran minimum largely goes towards reducing the Bucks’ luxury tax bill, providing no personal financial benefit to Lillard beyond the veteran minimum threshold itself. This structure could potentially incentivize Lillard to sign for the minimum elsewhere to maximize flexibility in choosing his next team, as signing for more wouldn’t increase his personal earnings from the Bucks’ perspective but only reduce their tax liability.
As for Lillard’s playing future, he remains a free agent recovering from a serious Achilles injury. Reports suggest potential landing spots could include a return to the Portland Trail Blazers, the Miami Heat (a team he was linked to previously), or potentially the San Antonio Spurs, among others like the Clippers or Timberwolves. However, he is currently ineligible to re-sign with the Milwaukee Bucks until his original stretched contract term officially expires in 2027. By then, Lillard would be 37, making a return to Milwaukee unlikely.
Frequently Asked Questions
How does the NBA’s stretch provision work, and how did it apply to Damian Lillard’s contract with the Bucks?
The NBA stretch provision allows a team to spread a waived player’s remaining guaranteed salary over a period calculated as double the remaining contract years plus one. For Damian Lillard, who had two years left on his contract when waived, the stretch period is five years (22+1). His remaining $112.6 million is now spread equally over these five seasons, resulting in an annual $22.5 million dead cap hit for the Bucks through 2030. This provided immediate cap relief but creates a long-term salary obligation.
What specific roster moves were made possible by the Milwaukee Bucks stretching Damian Lillard’s contract?
Stretching Lillard’s contract created approximately $23-24 million in immediate salary cap space. This was the crucial step that enabled the Bucks to sign free agent center Myles Turner to a four-year, $107 million contract, fitting his projected ~$24.8 million first-year salary under the cap. The shift to operating under “cap room” rules also allowed them to use the Room Midlevel Exception to sign Kevin Porter Jr. and Gary Trent Jr., and minimum contracts for veterans like Taurean Prince, Gary Harris, and Jericho Sims, effectively retooling the roster around Giannis Antetokounmpo.
What are the long-term financial consequences for the Bucks due to carrying Damian Lillard’s stretched salary cap hit?
The primary long-term consequence is a fixed, unalterable dead cap hit of about $22.5 million per season that counts against the Bucks’ salary cap and luxury tax calculations for the next five years, through the 2029-30 season. This significant annual figure reduces the team’s financial flexibility for half a decade, limiting the amount of cap space available for future free agent signings, extending current players, or facilitating trades. While the rising league salary cap will dilute its percentage impact over time, it remains a considerable anchor on the team’s long-term financial strategy.
Conclusion: A Defining Strategic Gamble
The Milwaukee Bucks’ decision to waive and stretch Damian Lillard’s contract is arguably the most aggressive, high-stakes salary cap maneuver in NBA history. Driven by the confluence of Lillard’s severe injury and the urgent mandate to maximize the championship window around Giannis Antetokounmpo, the team chose immediate cap relief at a significant future cost. By embracing the largest stretch ever, Milwaukee successfully generated the cap space needed to acquire key pieces like Myles Turner and solidify their roster for the upcoming season. This short-term gain comes with the undeniable burden of carrying a $22.5 million dead cap hit annually for the next five seasons, a constraint that will define their financial flexibility well into the future. The move is a stark illustration of a franchise making a bold gamble, prioritizing the present in their relentless pursuit of another NBA championship, consequences be damned.
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