Faced with a surprise free agency and staring down a market where only one team, the Brooklyn Nets, had cap space, Damian Lillard’s options were limited to say the least. Landing a three-year contract starting at the full non-taxpayer midlevel exception in a year where he will be recovering from an Achilles injury is a boon. If Lillard rebounds to near his previous form, he will be on a discount next year, but able to opt out in 2027 and sign one more solid contract. Otherwise, at age 37, he can opt in to that third year and reevaluate his career options in 2028.
That’s a good thing for Lillard since he may be losing nearly seven million dollars in net present value on his previous contract, as we recently analyzed what effect Milwaukee’s waive and stretch would have. And now that Dame has signed another professional contract, that number is going to go even higher! For every dollar that Portland pays, the Bucks get to keep a little bit more thanks to the CBA’s set-off provision in Article XXVII, Section 1(a).1
Lillard’s new contract has an interesting format, starting at $14,104,000, with a 5% decrease in the second year, and a return to the original number in the third year. Milwaukee can reduce all 120 months of their stretch payments by an amount related to the new contract’s first year salary, and by and additional amount related to the new contract’s second year salary over the final 96 months as described by Article XXVII, Section 5(a).2
View or download your copy of the workbook here.
For this exercise, we are ignoring the final year of the Blazers contract because it is beyond the timeline of Lillard’s original contract in Milwaukee so the Bucks can’t set-off any portion of it. Still making assumptions of 50% as the default take home percentage with an 8% annual investment rate, and all escrow eventually returned, the net present value of the first two years of the Portland contract is $16,496,960, as far as today’s dollars into Dame’s bank account.
Unfortunately for him, the set-off net present value is (-$6,138,884) so Lillard will only actually see about 63% of the value of the first two years of this new contract. Luckily, that net $10,358,075 is still enough to bring him back above water when combined with the amount lost when he was cut by Milwaukee (-$6,943,737), bringing Lillard’s final financial change this summer to a positive $3,414,339. In the end, not too bad a summer for Dame. He gets a little extra money in his pocket and a chance to rehab and play at least one more season closer to family in Portland.
But this is a great deal for the Bucks too, who originally owed Lillard nearly 135 million dollars in NPV on an extension that was just kicking in.3 Between the amount they will save in the stretch ($13,887,473) and this set-off ($12,277,769), Milwaukee will keep over 26 million dollars in today’s money. Recouping nearly twenty percent of the sunk cost on the contract of a 35-year-old player that will miss at least half of that time with injury is pretty good business for the Bucks.
While Lillard had no say in the matter with Milwaukee, another situation was brewing out west that couldn’t be solved unilaterally. The day before Dame signed his Portland contract, Bradley Beal agreed to be waived-and-stretched by the Phoenix Suns, giving back money in the process. While there won’t be any set-off to deal with, we will evaluate his decision involving both a buyout and an altered payment schedule in the final article and worksheet of this 2025 summer stretch series.
If you’ve enjoyed this, you might want to check out the rest of the Summer Stretch Series 2025:
And if you prefer watching instead of reading, I’ve created a companion video that ties it all together — watch it here
“When a Team (“First Team”) terminates a Player Contract (“First Contract”) in circumstances where the First Team, following the termination, continues to be liable for unearned Base Compensation (i.e., unearned as of the date of the termination) called for by the First Contract (including any unearned Deferred Base Compensation), the First Team’s liability for such unearned Base Compensation shall be reduced pro rata by a portion of the compensation earned by the player (for services as a player) from any professional basketball team(s) (the “Subsequent Team(s)”) during each Salary Cap Year covered by the term of the First Contract (including, but not limited to, compensation earned but not paid during such period).”
“In the event (i) a Team terminates a Player Contract and the payment of the player’s protected Compensation for any remaining Salary Cap Year(s) under the First Contract is stretched in accordance with Article II, Section 4(k) (the “mandatory stretch provision”), and (ii) the player subsequently earns compensation from another professional basketball team triggering a right of set-off under this Article XXVII, the amount of set-off to which the First Team may be entitled shall be calculated based on the unearned Base Compensation in respect of each Salary Cap Year covered by the term of the First Contract as provided in such Contract (and not with regard to how such protected Base Compensation amounts are payable to the player pursuant to the mandatory stretch provision). The set-off amount in respect of each remaining Salary Cap Year under the First Contract in which the related unearned Base Compensation is stretched in accordance with the mandatory stretch provision shall be allocated such that each of the player’s stretched protected Compensation payments in respect of the applicable Salary Cap Year are reduced on an equal basis over the applicable stretch period (i.e., for the first Salary Cap Year with respect to which a player’s protected Compensation is stretched, over the entire stretch period, and for any subsequent Salary Cap Years, over the remaining stretch period). In no event shall a Team be entitled to set-off under a First Contract in respect of compensation earned by a player (for services as a player) from a Subsequent Team(s) during a Salary Cap Year occurring after the term of the First Contract.”
Set the worksheet take-home variable to 100% because the Bucks don’t have to pay taxes and fees to hold on to not pay money.