Under the league’s collective bargaining agreement, teams can use the stretch provision to lessen a tax bill or cap hit when waiving a player. Teams are allowed to stretch the salary cap impact of the contract of waived player over two times the length of the contract remaining plus one year. Since Anthony has one year left on his deal, the Thunder could stretch it over three years (1x2+1).
So the $27.9 million owed to Anthony would be represented on the books as $9.3 million in 2018-19, $9.3 million in 2019-20, and $9.3 million in 2020-21. If the Thunder keep Melo around or waive him without using the stretch provision, his cap hit would be $27.9 million in 2018-19 and $0 going forward.
By using the stretch provision, the Thunder would avoid the huge luxury tax pain this season at the cost of limiting salary cap flexibility for two future years./