Jeremy Lin is officially a Rocket following confirmation that New York would not match Houston’s offer for the NBA star.
Lin was a restricted free agent, which gave New York the right to match any offer to keep the overnight sensation in the Big Apple.
Houston were crafty with the offer they put to Lin. They offered him approximately $5 million over each of his first two seasons, followed by a whopping $15 million (roughly the same salary as LeBron James) in his third.
Teams currently pay one dollar of luxury tax for each dollar that they exceed the salary cap. But by Lin’s pay-off season, the luxury tax will kick in at somewhere between $1.50 and $1.75.
Sticking with franchise tradition, New York has one of the highest-paid rosters and is already over the cap. Matching Lin’s offer would have cost New York an enormous amount of money three seasons from now.
However, the profit Lin generates far outweighs the cost of keeping him. The value of Madison Square Garden Company increased by $600 million since the ‘Linsanity’ phenomenon began, and rumours of Lin’s departure caused a $50 million drop.
There are also reports that New York owner James Dolan, whose management of the Knicks has been a perennial train wreck, acted out of spite. It irritated Dolan that Lin hired a publicist without consulting team officials, and that Lin was seeking a pay day, like every other free agent in professional sporting history.
Dolan didn’t make a financial decision, he made a personal one, and Lin is on the next plane to Houston as a result. Dolan’s decision-making is bereft of logic and beyond comprehension. It’s not the decision itself, but why he made it.
If his reasoning was based on basketball and doing the best thing for the team on the court, then at least that would help console Knicks fans. But to let one of the most remarkable stories in recent sporting memory leave because he acted the way free agents should is unfathomable.
Even if Lin acted like a fool (which he didn’t), giving Dolan a legitimate reason to let him go, Dolan could have simply matched Lin’s offer, then traded him to get something in return. To let him go for nothing adds the finishing blow to Knicks fans.
Add another Dolan train wreck to the list.
Nick Jungfer
Roar Guru
"Felton is so good it was a public holiday in oregon when his departure was announced." It should also be noted that as people tend to over eat on public holidays, this will fit right in with the Felton theme.
Mushi
Guest
Felton is so good it was a public holiday in oregon when his departure was announced. Felton was absolutely terrible last year and the Knicks didn't play much PnR under Woodson. Felton isn't a starting pg
Sav
Roar Rookie
They got a better point guard in Raymond Felton at a bargain price of 10 million over 3 years. The Knicks made the right move here both financially and personel wise. Felton is one of the best point guards in the league and plays the pick and roll game very well as he proved during his last stint with the Knicks a year or two ago.
Nick Jungfer
Roar Guru
Teams never show loyalty to players so why should players show loyalty to teams? This reminds me of the people who said Ray Allen betrayed the Celtics despite by signing elsewhere, despite Boston already attempting to trade him twice. It's strictly business, loyalty doesn't play and role , except for very, very rare exceptions. (& if you are going to be that exception and be loyal to someone, it wouldn't be the indescribably incompetent Dolan, especially when he's getting pissy because Lin is fielding offers from other teams like every other free agent ever.) Cameron, lets say you worked in a really fun workplace but came to the end of your contract and someone asked you if it was great being there? Would you say yes? Yep. When asked if ideally you'd like to return would you say yes? Sure. But if another company stepped forward with an astronomical offer which your original company was unwilling to offer even close to, would you take it? Of course you would. Lin just had a remarkable run at the end of last season, giving him the chance, likely the only chance in his life, to earn $15 million in a season, and you're saying he shouldn't take it?
Cam Larkin
Roar Guru
The Knicks made the right call. Lin isn't worth that as a player yet, a ridiculous backloaded deal. Lin said he wanted to play in NY however went and signed the revised and final offer sheet ... betrayal anyone? Report on TheRoar tomorrow and on CameronLarkin.com now. Look forward to hearing your thoughts.
Nick Jungfer
Roar Guru
The ASG is another interesting aspect. Lin likely starting in the All Star Game, in Houston no less, crazy. If Linsanity does fade during the first half of next season, that's sure to rekindle things in a major way, at least for a little while.
Scotty Barby
Roar Guru
Long term, possibily. This is a 3 year contract though. Lin would have to fall off the face of the Earth for this to fail from a business perspective. Lin will be the starting point guard at this years All Star game and the face of the Houston Rockets. At worst Lin's marketing value goes from $589378347348378974 to $489378347348378974 once the contract expires.
mushi
Roar Guru
It was done more to avoid a team only $5m under the cap exploiting the rule.
Scotty Barby
Roar Guru
They are... Lin's salary will still be 15 mill in year 3, but the salary cap hit is taken as 8/8/8 because the Rockets are under the cap. Lin recieves salaries of 5/5/15. It's confusing, but the CBA is structured this way to reward teams under the cap. In regards to the Knicks, this was never a basketball decision it was a business decision. No matter which way you cut it they made an horrendous call.
peeeko
Roar Guru
Yes but his marketing dollars will fall away over time unless he stays a star.
B-Rock
Roar Guru
How is Houston not paying him $15m in yr 3?
Nick Jungfer
Roar Guru
Just a few extra points.. Apparently Lin won't get $15m in his third year at Houston, that would only have happened in NY if they matched. Ahh the CBA, she's a strange and mysterious beast. I don't buy 'he might've been a flash in the pan so better not to pay him $25m over 3 years'. There's always the marketing dollars side of it of course. But additionally, as far as on the court goes, if you resign him and he plays well, NY wins of course. If he doesn't play well, they're only spending $5m in the first two season and then Lin becomes a valuable expiring contract trade chip in the third - so NY gets something in return (on the court) for Lin. But to just let Lin go for nothing? Madness. Not to mention, when has NY ever cared at all about paying huge amounts of luxury tax? I know the tax is increasing soon but it's insane to all of a sudden start worrying about luxury tax when a money making machine falls into your lap.
Chop
Guest
I don't know why they didn't commit to matching and trade him when the big end of the contract came about.
Nick Jungfer
Roar Guru
Thanks mate & I'll be sure to give it a read.
Worlds Biggest
Guest
The Knicks have taken a punt that Lin was a flash in the pan and paying him 14 mill in year 3 of his deal was crazy. On the flip side the commercial aspect of him being a Knick if he continues to improve would have more than paid for his big contract. The Knicks have re acquired Raymond Felton and have Jason Kidd so there not short of point guards. We wont know how this will pan out until Lin suits up for the Rockets. Good luck to him for snaring a great deal off the back of Linsanity. For the Knicks to succeed moving forward they have to trade Amare or Melo, the big 3 did not gel together. Go Celtics !
mushi
Roar Guru
- Houston have strong ties to the chinese market through Yao that Lin will now immediately tap into. - As one journo wrote last night. Lin has reportedly turned down endorsement deals worth a total north of 100m if he was after short term monetary benefit he’s the dumbest Ivy League graduate since George W. - The Knicks didn’t offer a multiyear contract. They told him to go out and get an offer - New York is also a very fickle market. With Melo pouting because he’s no longer centre of attention Lin’s second year was going to be very bumpy at the Knicks - Lin’s rise was facilitated by being in NY but I think his success from here will be driven more by being an Asian American than a Knick
Kasey
Guest
I guess I just don’t understand the American sportsmans mentality. Lin had the perfect storm of circumstances to become/continue being a once in a lifetime cult hero, but he appears to have thrown it away in the pursuit of one big paycheque now instead of thinking longer term. Not only that, but swampy-muggy Houston over the biggest media market in the world? Really, who is advising him?
B-Rock
Roar Guru
Lin will never be a top 5 PG but he did a couple of things very well (pick and roll, getting in the lane) - skills that are very useful with Chandler and a Amare as your two bigs. Their other options are very limited (38y.o JKidd, fat Raymond Felton) so their is no fallback plan. Also, his value is not just based on their performance on the court - marketing value is critical - there is a reason why the team which offered the contract in the first place has had experience marketing to Asia (Houston/Yao Ming) - they understand the value of a player like this for jersey sales, TV contracts, off-season tours, etc. Peversely, the NBA actually values large sallaries in the final year of deals as they are used to clear room under the cap the following season. Worst case scenario, he is only half as good as last season, easily justifies $5m p.a. for two yrs, then trade him in the final yr to someone looking to gut their roster. Overall, a seriosuly short sighted, dumb move by the Knicks. Will lose any momentum from the second half of last yr, just as Brooklyn starts up with Deron Williams and Joe Johnson as well as an owner willing to spend whatever it takes.
mushi
Roar Guru
By Lin’s pay day the luxury tax bill is probably going to be $3.50 / $4.25 per dollar given they’ve got 68.75 Mil committed for that season to just six players under contract. But that isn’t just the result of the Lin contract, it is the result of paying Amare and Melo like they are genuine max players. That was what was hilarious Melo calling someone else’s contract ridiculous when he’ll be paid 64.5m during that period and yet he sold less jerseys and tickets.
Reece Jordan
Roar Pro
Excellent piece. Another terrible Dolan decision that may end up bringing down the Knicks in the long run. I wrote a piece that echoed similar sentiments on the matter last night at http://therjreport.blogspot.com.au/2012/07/free-agency-analysis.html?m=1