For whatever reason, Jeremy Lin gets people talking.
Those who say the Knicks shouldn’t match the three-year, $25 million offer sheet Lin got from Houston over the weekend think it’s ridiculous to (over)pay someone that much money who, basically, has three good weeks of basketball on his career ledger, and that Lin’s contract would inevitably cause friction in the locker room. Those who think the Knicks should match point to Lin’s incredible popularity, both on and off the court, and the financial implications for Cablevision, the Knicks’ owner, if it lets Lin walk. The New York Times has reported that the team’s parent company has gained $600 million in market capitalization since Lin became a starter and phenom last February.
I have no dog in this hunt. I’m neither a Knicks fan nor a hater. But it seems clear that, while the Knicks would certainly be paying above market and basketball value for Lin by matching the offer sheet, the implications of not doing so could bring even greater risk. And, even if it turns out Lin is a complete bust, it doesn’t have to be nearly as punitive in that potentially toxic third year for New York as people are making it out to be.
There are legitimate basketball reasons not to bring Lin back. He flourished while Carmelo Anthony was injured and out of the lineup, thriving in a free flowing game where the ball moved. The Knicks ran numerous screen and rolls with Lin, allowing him to stay on the move while deciding whether to drive or dish. Wing players like Steve Novak and J.R. Smith thrived in that system, and the Knicks’ defense was much improved as well. (Rookie Iman Shumpert was just as important a part of Linsanity as Lin, with his ballhawking, turnover-producing defense on the wings.)
When Anthony returned — and when you trade for Carmelo Anthony, this is what you’re going to get — the ball stayed in ‘Melo’s hands, with more traditional isolations. That doesn’t make Anthony a villain; he’s a scorer, and it’s silly to have him on your team if he’s not going to get the ball. Some players just don’t mesh well together. Lin and Anthony, at least initially, seemed to fit that bill. Maybe in time Lin will become a more consistent shooter, but it’s not really the strength of his game at present. Raymond Felton, acquired over the weekend from Portland is, barely, a better three-point shooter than Lin.
Lin’s inexperience could also factor into a decision to let him go. The Knicks’ window for competing in the East is right now, three years — which, not coincidentally, is the length of time left on the contracts of Anthony, Amar’e Stoudemire and Tyson Chandler. New York obviously isn’t going to trade Anthony, and no one is going to trade for Stoudemire, with his history of knee problems (which make getting insurance for him extremely problematic) and $20 million annual salary — at least not now. (See below.) This is the team for the next two years. Lin has never played in a playoff game; he didn’t return from his torn cartilage injury in time for the Knicks’ first-round series loss to Miami. Jason Kidd, who signed with the Knicks, has played in 146 postseason games. Felton’s only played in nine playoff games, but that’s nine more than Lin. The Knicks may not trust Lin yet in clutch situations — at least not at those numbers.
And let’s talk about those numbers, the crux of the matter. Really, we’re just talking about the third year, which pays Lin $14.898 million for the 2014-15 season.
The Knicks have already committed more than $70 million in salaries that season to five players: Anthony, Stoudemire, Chandler, Kidd and Novak, who re-signed last week. (For purposes of this exercise I’m not counting Marcus Camby‘s third-year salary, which is not fully guaranteed.) Adding Lin would swell the payroll to more than $85 million, and New York would still have to fill out almost half of its roster. The argument is that keeping Lin would cost the Knicks millions more in potential luxury tax payments, with the more punitive luxury tax penalties in place by then. That was the rationale Houston used to discourage the Knicks from matching the sheet in the first place.
But that’s not a winning argument.
First, as Ira Winderman pointed out the other day, it’s not Lin’s contract that would push the Knicks into luxury tax oblivion; it’s the entire team’s payroll. Nobody made New York give Stoudemire a $100 million deal, or commit $58 million to Chandler. Those contracts count, too.
Second, anti-match advocates ignore the fact that the first two years of Lin’s deal, at $5 and $5.225 million, are pretty good bargains for a starting point guard these days. The Lakers got Steve Nash for three years and $27 million in that Fourth of July sign-and-trade deal with the Suns. Indiana is paying George Hill, on average, $8 million a year in his new deal. Phoenix is paying Goran Dragic $7.5 million a year to run the point in Nash’s place. Ramon Sessions will get $10 million for two years in Charlotte.
Third, that luxury tax payment schedule, with higher penalties for teams that exceed the tax threshold, is going to make people quite desperate. The need to get under the tax threshold, or at least get closer to it, will be overwhelming for most teams. Lin will be an expiring contract in ’14-’15. How many teams would love to be able to cut $14.898 million off of their team salary? People are getting caught up in whether Lin’s worth that much; that’s not the point. The point is he’d be an extremely valuable asset for a team looking to escape going deeper into luxury tax hell.
Say, for example, your team payroll is projected for $90 million in ’14-’15. If we used the current $70 million tax threshold as a guide, your team would pay $1.50 per dollar on the first $5 million ($70 to $75 million) you were over the threshold, or $7.5 million in tax. You’d pay $1.75 in tax on the second $5 million ($75-$80 million) that exceeded the threshold, or $8.75 million in tax. You’d pay $2.50 per dollar on the third $5 million ($80-$85 million) that exceeds the tax, or $12.5 million more in tax. And you’d pay $3.25 on every dollar on the fourth $5 million ($85-$90 million) that exceeded the tax, another $16.25 million. That’s $45 million in tax on that $20 million which exceeded the threshold. (And those penalties increase for so-called “repeater” teams that have paid the luxury tax in each of the three previous seasons before then.)
If you traded for Lin, however, and subsequently released him (remember, we’re not talking about the talent of the player here; just the tax implication), you’d knock almost $15 million off of your payroll, and you could easily exceed $15 million by waiving a non-guaranteed contract. Those two transactions alone would lower your team salary to less than $75 million, meaning you wouldn’t have to pay $37.5 million of the $45 million in tax you’d pay with a $90 million payroll.
Do you think saving $37.5 million would be something teams would want to do? Expiring contracts are like the Golden Ticket in Willy Wonka and the Chocolate Factory.
Please don’t tell me you can’t trade Lin’s contract. Juwan Howard got traded. Gilbert Arenas got traded (for Rashard Lewis, whose humongous contract has subsequently been traded again). Joe Johnson got traded. There’s always somebody who can use a big contract, for one reason or another. And, as noted above, Stoudemire will be in the last year of his deal that year as well, and could bring even more potential tax relief ($23.4 million) that year than Lin would.
Fourth, as cap avatar Larry Coon pointed out Tuesday morning, the Knicks also will have the “stretch” provision available to use in the third year of Lin’s contract. The stretch provision was a new addition to the collective bargaining agreement. It allows teams that sign players after the implementation of the new CBA to waive those players and stretch the payments (hence the name) out over the same number of years as his contract. So, if the Knicks wanted to cut Lin in 2014 or 2015, they wouldn’t have to take that $14.898 million hit all at once. They could divide it into three hits over the 2014-15, 2015-16 and 2016-17 seasons of $4.966 million each season.
Fifth, and seemingly forgotten in all this, is that Lin showed signs of being a pretty doggone good player in that admittedly brief sample size. His Player Efficiency Rating of 19.9 was 10th in the league among point guards, according to ESPN.com’s John Hollinger. He had a true shooting percentage of .552, 14th among point guards. He was willing to take contact on his way to the basket. He got better as the game went on; one eminently qualified observer noted that Lin might start a game not knowing how he was being guarded, but by the end of the game, he had figured out the angles. He was not a pushover defensively, either.
The knock on Lin, and it’s a fair one, is that he was a turnover machine. He was 10th-worst among all point guards in the league in turnover ratio last season. Lin did make occasional horrible decisions with the basketball, getting caught in the air far too frequently and telegraphing his intentions. But, guess who was 11th-worst in the league in turnover ratio last season, right behind (ahead of?) Lin?
Two spots behind Nash?
Kidd, Denver’s Andre Miller and Minnesota sensation Ricky Rubio. Right behind them? John Wall.
The point is not that Lin is better than Nash; he isn’t, or that turnovers are a good thing; they aren’t. The point is most top point guards turn the ball over a lot. It’s part of why I never have understood the vitriol reserved for Russell Westbrook. The point guard has the ball in his hands for much of the game. The great ones try passes they probably shouldn’t, and many of them result in miscues. It’s unfortunate, but it’s part of the game. A Knicks fan can hope that as Lin gets smarter and more experienced he’d be more careful, but chances are, he won’t.
Sixth, unless you believe that Felton is going to have a bounce-back year after his disastrous turn with the Blazers last season (to be fair, Felton was great for Mike D’Antoni in New York in his half-season with the Knicks in 2010-11), or that the 39-year-old Kidd is going to be rejuvenated by the bright lights and big city, chances are the Knicks may well be looking for a point guard again in a year or two. Would it not make sense to try and continue to develop a 23-year-old who came on like a freight train when he got one last chance to show what he could do?
There are good arguments to be made on both sides of the debate. We’ll all find out what James Dolan and the Knicks’ brass decide. But the preponderance of the evidence would seem to indicate that while matching Lin’s offer sheet is a gamble, it’s a gamble worth taking.