Why passing on matching the Rockets’ offer sheet to Jeremy Lin is wrong for the Knicks
Tonight, the deadline for New York to match the 3 year, $25 million offer sheet given to Jeremy Lin came and went – without the Knickerbockers scrounging up the cash to keep the sensational 23 year old in their employment. The main reason: the contract, constructed by the Houston Rockets (specifically, GM Daryl Morey,) contained a “poison pill” – the third and final season calls for Lin to make about $14.8 million. The breakdown would be as such: $5 million in 2012-13, $5.2 million in 2013-14, and the hefty pay raise to $14.8 million in 2014-15.
Carmelo Anthony, Amare Stoudemire and Tyson Chandler all have long-term deals with the Knicks at maximum or near-maximum salaries. Both Chandler and Stoudemire’s contracts are up after the 2014-15 season. The third year of Lin’s new deal would cause the Knicks to pay the luxury tax – estimates had that figure at anywhere from $35-50 million. That means the team would’ve paid Lin the $14.8 million and anywhere from $21 to $36 million to the league for the privilege of having him on the roster in 2014-15.
Admittedly, this is a steep price to pay for a relatively unknown commodity. The Knicks have not been known for their fiscal responsibility in the past. A possible reason for their reluctance to spend now? Knicks owner James Dolan is the CEO of Cablevision, the media conglomerate whose stock dropped dramatically in the past year, affecting his personal fortune greatly.
Separate from the business side of things, fans seem split on whether or not Lin is really worth $25 million over three years – after all, he made a grand total of 25 starts for the Knicks this past season. In the month of February he averaged 21 points, 4 rebounds and 8 assists, shooting 47% from the field and 33% from three – outstanding numbers, albeit in a limited sample size. In March he dropped off, averaging 15 points, 3 rebounds and 6 assists on similar shooting statistics.
From a pure, basketball perspective, the jury is still out on Jeremy Lin. Making multimillion dollar salary decisions based on less than a third of what a “normal” regular season would entail – the Knicks were not in an enviable position here. Lin’s body of work lacks meat on its bones – that much is certain – but there is certainly enough to like about Lin, the player.
Arguably, the Knicks are making the right basketball decision, but from a marketing standpoint, they are dead wrong in letting Lin escape the Big Apple without any sort of compensation.
That’s because Lin, the international icon, is worth every penny of the $25 million – plus whatever luxury tax must be spent – because the Chinese fan base has an insatiable (and relatively untapped) appetite for both the NBA and Lin himself. It is uncertain is how much individual NBA franchises receive for overseas memorabilia sales and television broadcasts. Even if this figure is a mere fraction of the revenue that exists, one would certainly expect the franchise to be able to recoup some of the “lost” luxury tax money that would have to be paid to keep Lin in Madison Square Garden.
And as for the concerns about the 2014-15 season – why not worry about that as it comes? Expiring contracts can be valuable commodities in the NBA – and the possibility of trading Amare’s expiring deal in the offseason before his final year could be an easy way to resolve many of the cap and luxury tax concerns the Knicks have.
If Lin continues to play at a high level, and the Knicks are winning, revenues would increase, thereby assisting in the payment of the luxury tax. If he doesn’t live up to the deal, who’s to say a team badly in need of publicity wouldn’t like to acquire Lin in a year or two as a way to sell tickets and overseas merchandise? The only real risk in matching the offer sheet is that Lin gets hurt – the same risk that exists with any other big contract.
For once, the Knicks are over-thinking things. Rather than spending wildly and inappropriately on someone (as they did with Stoudemire) they are overly concerned about what might occur three seasons down the road. While it is important for teams to have long-term financial plans, the Knicks play in the world’s most famous arena and are one of the NBA’s most viable franchises – they can afford to pay the piper, if need be, when the time comes.
Those factors, and others, make this decision all the more puzzling. The Houston Rockets are now in possession of one of the most famous basketball players in the world – all it took was a clear understanding of the luxury tax, and Dolan’s suddenly tight purse strings. The Knicks screwed up, big time. Some things never change.
BreakTheHuddle is a fan of the Twins, Timberwolves and the 13-time World Champion Green Bay Packers. Reach him at BreakTheHuddle@gmail.com, @BreakTheHuddle on Twitter or leave a comment below!