Jon Horst and the Milwaukee Bucks took the unprecedented move to use the waive-and-stretch provision on the remaining $113 million on Damian Lillard’s contract. Lillard is not expected to play next season due to his Achilles injury, leaving the Bucks with $54.1 million in dead money.
ESPN’s Brian Windhorst explained the financial strategy behind Milwaukee’s decision on Wednesday’s Hoop Collective Podcast. The move allows the Bucks to add productive talent while managing their luxury tax situation.
The waive-and-stretch provision drops Lillard’s cap hit to $22.5 million for the 2025-26 season. Milwaukee subsequently added Myles Turner at $27 million for Year 1, giving them a productive player for approximately the same salary slot Lillard would have occupied.
“So, I had somebody explain a version of the strategy to me,” said Windhorst. “I’m not endorsing this. I’m just going to tell you what I was explained. Somebody explained why-how the Bucks could justify this. So, Dame is on the books $22.5 million, let’s call it $23 million. Myles Turner’s deal averages $27 million a year. So, basically for the next four years, it’s $50 million for the two of them. So this year Dame was on the cap for a little over $50 million and that was a-you know, a blank spot on the cap. Maybe he comes back. Let’s just assume that he doesn’t. Maybe he does. But it’s $50 million you weren’t going to get production out of.”
“So now they reduced the Dame number to $23 million for this year and they bring in Myles Turner and it’s again about $15 million. And so now you have a productive player in that $50 million spot. And secondly, you reduce yourself below the luxury tax and so you are in theory not paying tax and you get access to the distribution which I don’t know, let’s say it’s $10 million. We don’t know what it’s going to be.”
The Bucks will continue to carry Lillard’s $22.5 million in dead money on their cap sheet for three additional seasons. This represents the cost of gaining immediate roster flexibility and avoiding luxury tax penalties for the upcoming season.