What seemed a certainty days ago — that the New York Knicks would match any offer sheet for restricted free-agent guard Jeremy Lin from the Houston Rockets — became quite unclear Saturday night, after the Knicks agreed to terms with free-agent guard Raymond Felton in a sign-and-trade deal with Portland. The Knicks also received forward/center Kurt Thomas from the Blazers for a second tour of duty in New York. In exchange, the Knicks sent forward Jared Jeffries and center Dan Gadzuric to Portland.
Felton reportedly signed a three-year, $10 million contract with New York, a hefty deal for someone that wasn’t going to play very much as a third point guard. The Knicks already signed Jason Kidd to a three-year, $9.5 million deal earlier this month, and also have Argentinian guard Pablo Prigioni under contract.
Bringing back Lin, the undrafted guard out of Harvard who electrified crowds in New York in a three-week stretch in early February that was quickly dubbed “Linsanity,” seemed a formality. But unless the Knicks are planning to play Kidd much more at shooting guard next season, it would appear they have at least one point guard too many around.
The Rockets, according to a source, thought there was a chance Saturday that the Knicks wouldn’t match the offer sheet. New York will have three days from when it receives the sheet to decide whether to match it or not. If it matches the offer sheet, it can’t trade Lin until next July.
The Rockets signed Lin to a three-year, $25.1 million offer sheet Friday, reworking the terms of the key third year of the contract from earlier proposals they had made in the week. In the offer sheet Lin signed, after getting $5 million in the first year of the contract and $5.225 million in the second, he’ll be paid $14.898 million in the third. Houston could do that because for cap purposes, the value of his deal is averaged for the team that signs a restricted free agent to an offer sheet and offers him a raise larger than the normal average in the third year. That means Lin would count for a little more than $8 million each year on Houston’s cap, even though he’d be paid less than that in each of the first two seasons and more than that in the third year.
But that won’t be the case for the Knicks. New York will have to absorb that entire $14.898 million in year three, which is the same year the Knicks are already on the tab for $24.3 million for Carmelo Anthony, $23.4 million for Amar’e Stoudemire and $14.5 million for Tyson Chandler. Those four salaries alone would put New York above the salary tax threshold of $70 million this season. By then, the more punitive penalties of the new collective bargaining agreement for taxpaying teams would kick in, with teams paying $1.50 in tax for every dollar they exceed the threshold up to $5 million.
They would pay $1.75 in tax for every dollar they exceeded the threshold by $5 million to $10 million, $2.50 per dollar from $10 million to $15 million above the threshold and $3.25 per dollar they exceeded the threshold from $15 million to $20 million. And if a team is a “repeater,” having exceeded the threshold three straight seasons, those rates would increase by a dollar per $5 million above the threshold–to $2.50, $2.75, $3.50 and $4.25 per dollar over.
Those amounts of tax could quickly become prohibitive, even for a team like New York, perhaps the biggest revenue producing team in the league. It would be a key test of the new CBA, which was designed to discourage the league’s highest-spending teams from hoarding good players.
Still, letting Lin walk would be a surprise, given his impact both on the court and in terms of potential merchandising opportunities in New York. Lin jerseys and t-shirts flew off the shelves in the heyday of Linsanity, which ended quickly after Lin suffered a knee injury late in the regular season and missed the Knicks’ first-round series with Miami. Lin didn’t mesh with Anthony, who’d been injured when Lin first got his opportunity, when Anthony returned.
Felton, the former first-round pick of the Bobcats, played well in his first run in New York after signing as a free agent in 2010. Playing for then-coach Mike D’Antoni, Felton averaged 17.1 points and 9.3 assists in 54 games before being sent to Denver as part of the trade that brought Anthony to New York. Felton then was traded to Portland, where he had a disastrous season. He reported to camp out of shape after the lockout, and never meshed with former coach Nate McMillan, shooting just 40 percent from the floor.
Houston is continuing to try and amass assets as it looks to add a star player. The Rockets have long coveted Dwight Howard from Orlando, even though Howard has indicated he wouldn’t sign a contract extension if traded there, and would become an unrestricted free agent next summer. Houston is expected to give Bulls reserve center Omer Asik a three-year deal similar to Lin’s.