Everything you need to know about the salary cap implications of Joakim Noah’s mega contract from 2016.
When Phil Jackson signed Joakim Noah to a four-year, $74 million contract in the summer of 2016, everybody knew it was a bad deal. Well, everyone except the Knicks, that is. Two years later, the team has waived Noah outright, having failed to reach a buyout agreement that could have potentially saved them some cap money in the future.
Let’s break down what Noah’s contract means to their future cap space.
How does the stretch provision work?
In short: It stretches the remaining salary owed to Noah over a longer period of time.
More: By waiving Joakim Noah, the Knicks are allowed to stretch the remaining salary that is guaranteed in his contract over twice the remaining term plus one year.
Since they waited until Noah’s 2018-19 salary was set in the books before waiving him (more on this in the next question), they are able to stretch the final year of his contract over three years (take the 1 year remaining on his contract, multiply it by two, then add one year).
How will Noah’s cap hit impact the Knicks going forward?
In short: The Knicks gain close to $13 million in extra cap space in 2019 at the cost of losing $6.4 million in cap space the following two seasons.
More: Nothing changes about Joakim Noah’s guaranteed salary this season. Since the two sides couldn’t come to terms on a buyout agreement, the Knicks owe Noah the full $18.5 million in 2018-19.
The reason the Knicks waited until after August 31 to waive Noah is because they aren’t interested in cap saving for this upcoming season, so they will absorb his entire salary for 2018-19 and only stretch the final season on his contract over three years. Had Noah been waived before September 1, the Knicks would have stretched the final two years of his contract over five years.
The final season of Noah’s contract will be stretched over three seasons with a cap hit of $6.4 million per season.
By creating extra cap space in 2019, the Knicks can essentially create max space for a 7-9 year veteran free agent (ie Kyrie Irving type) without needing to move any other contracts in trade. They will need to create approximately $7 million more in space to have enough room to offer a 10+ year veteran (ie Kevin Durant) a max contract.
Can the Knicks wait to see if they land a free agent in 2019 before stretching his cap hit?
No. The Knicks must notify the league whether or not they plan on stretching his remaining salary by 11:59 PM on the day following when the player clears waivers. Once the decision is made, it is set in stone.