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Detroit Pistons Waive Josh Smith
The Pistons waived Josh Smith this morning in what has to be considered one of the most shocking moves in recent NBA history. Smith was not having a good season but he had two years and $27 million remaining on his contract after this year, meaning owner Tom Gores will soon be paying Smith a significant amount of money to play for another team.
So… how does this work?
The Pistons waived Smith via the stretch provision. This means that the rest of the salary owed for this season will be paid out on schedule, while the remaining $27 million will be stretched out over double the remaining length of the contract, plus one. That means he’ll receive the rest of the $27 million over a five year period, because there are two years left on the contract. The Pistons may elect to stretch the salary cap charge to match the payment schedule, which will save them a little more than $8 million in cap space each of the next two seasons (2015-16 and 2016-17), but cost them about $5.4 million in each of the following three seasons (2017-18, 2018-19 and 2019-20).
As for Smith, he is placed on waivers for the next 48 hours and follows the standard waivers procedure. Because his salary this season is $13.5 million, only teams with at least that much cap space (or a disabled player exception or traded player exception of equivalent size) can place a claim on him. Basically, the 76ers are the only team that can claim Smith right now.
If and when he clears waivers, Smith can sign with any team he likes and can negotiate any salary. Whenever Smith does eventually sign, the Pistons can reduce the amount they owe Smith — and their team salary — by the one-half the difference between the value of the contract and the minimum salary owed to a one-year veteran. This is very unlikely to amount to a significant difference.
