The Money Situation Isn’t That Bad
Last week I detailed the Knicks luxury tax situation if they matched Fields’ offer. You can read that here, so I won’t bore you with the details. What’s important to the Lin situation is that I estimated the Knicks payroll to be about $95 mil with Lin’s salary at $9.8 mil. That would put the Knicks about $20 mil over the luxury tax. The extra $5 mil that Lin is now set to earn in the third year would cost the Knicks an additional $19 mil in luxury tax payments.

That’s $19 mil just for the extra $5 mil in salary, not $19 mil total for Lin. If the Knicks somehow don’t match on Lin it’s not like they wouldn’t be over the luxury tax anyway. That’s the price you pay with a starting frontcourt set to make $65 mil in 2014-15. Realistically the Knicks wouldn’t take the money earmarked for Lin and pay it to minimum salary players, so let’s say Lin costs the Knicks an extra $8 mil that year. Between salary and luxury tax, Lin likely would cost Dolan another $35 mil.

Pricey for sure, but Lin should be worth that much to the Knicks as he would increase the team’s visibility in China and throughout the world. For a publicly traded company like Cablevision, that has to be real nice for the stock price. In the worst case scenario if Lin does not justify the enormous salary, the Knicks could use the CBA’s stretch provision and avoid paying all that money in 2014-15.

If a player has one year left on his contract, the stretch provision allows the team to spread (“stretch”) the costs over three years. Two years remaining can be spread out over five years. Lin’s $15 mil balloon payment could be spread out to $5 mil in 2014-15 and the following two seasons. The salaries of Melo, STAT, and Chandler are set to come off the books in 2014-15 so the Knicks should easily be under the luxury tax even with potentially $5 mil in dead money for 2015-16 and 2016-17. The stretch provision makes the financial investment a lot less risky.

If a player has one year left on his contract, the stretch provision allows the team to spread (“stretch”) the costs over three years. Two years remaining can be spread out over five years.

Sooooo, everything MSG has spun out to outlets like the NY Post and ESPN today is totally offbase.

crzymdups wrote:

Rookie wrote:why would the player agree to play an additional 2 years for free?

They don't play the extra two years, this is purely about the cap hit of the contract. They still get paid on time and everything - it's just about lessening the cap hit.

I'm sitting here with a drink so I might have to wait till tomorrow to wrap my head around this

CashMoney wrote:

gunsnewing wrote:So the stretch provision is what enables the rockets to spread out the 25m @ 8.33 a yr for 3yrs. Makes sense being that it is called the "stretch" prov

"In the NBA labor deal is what is called the “stretch provision,” which will help teams get rid of underperforming players on big deals. It can only be used on new contracts but here is how it works: If you want to get rid of a player you can buy him out then stretch out his contract on your books for double the length of the deal plus one year. For example, if a player is owed $20 million over two seasons and he gets waived, the team can stretch him out so his deal so on the official salary cap ledger he only costs them $4 million a season for five seasons."

http://probasketballtalk.nbcsports.com/2011/11/28/nba-stretch-provision-may-mean-more-bad-contracts/

That means if Lin is not playing well or can't be traded in year 3 we can waive him and stretch the cap hit from his contract. Can you do this for multiple players? If not I would rather save it for Amare.

FeltonandAmare wrote:

loweyecue wrote:

CashMoney wrote:

gunsnewing wrote:So the stretch provision is what enables the rockets to spread out the 25m @ 8.33 a yr for 3yrs. Makes sense being that it is called the "stretch" prov

"In the NBA labor deal is what is called the “stretch provision,” which will help teams get rid of underperforming players on big deals. It can only be used on new contracts but here is how it works: If you want to get rid of a player you can buy him out then stretch out his contract on your books for double the length of the deal plus one year. For example, if a player is owed $20 million over two seasons and he gets waived, the team can stretch him out so his deal so on the official salary cap ledger he only costs them $4 million a season for five seasons."

http://probasketballtalk.nbcsports.com/2011/11/28/nba-stretch-provision-may-mean-more-bad-contracts/

That means if Lin is not playing well or can't be traded in year 3 we can waive him and stretch the cap hit from his contract. Can you do this for multiple players? If not I would rather save it for Amare.

This cannot be used on Amare only players signed under the new CBA which is why it applies to Lin. Anyone saying it doesn't apply to Lin and the Knicks doesn't know what they are talking about. I guess it will take Jesus coming down from Heaven to prove to some clown posters that this is NOT ABOUT THE LUXURY TAX.

Ah ok, I was just getting my hopes up on amare's last year. But yeah it makes sense that signing Lin is not a luxry tax risk at all if this is true.

CrushAlot wrote:

loweyecue wrote:

FeltonandAmare wrote:

loweyecue wrote:

CashMoney wrote:

gunsnewing wrote:So the stretch provision is what enables the rockets to spread out the 25m @ 8.33 a yr for 3yrs. Makes sense being that it is called the "stretch" prov

"In the NBA labor deal is what is called the “stretch provision,” which will help teams get rid of underperforming players on big deals. It can only be used on new contracts but here is how it works: If you want to get rid of a player you can buy him out then stretch out his contract on your books for double the length of the deal plus one year. For example, if a player is owed $20 million over two seasons and he gets waived, the team can stretch him out so his deal so on the official salary cap ledger he only costs them $4 million a season for five seasons."

http://probasketballtalk.nbcsports.com/2011/11/28/nba-stretch-provision-may-mean-more-bad-contracts/

That means if Lin is not playing well or can't be traded in year 3 we can waive him and stretch the cap hit from his contract. Can you do this for multiple players? If not I would rather save it for Amare.

This cannot be used on Amare only players signed under the new CBA which is why it applies to Lin. Anyone saying it doesn't apply to Lin and the Knicks doesn't know what they are talking about. I guess it will take Jesus coming down from Heaven to prove to some clown posters that this is NOT ABOUT THE LUXURY TAX.

Ah ok, I was just getting my hopes up on amare's last year. But yeah it makes sense that signing Lin is not a luxry tax risk at all if this is true.

It's true if the Knicks waive Lin. They could wAive tyson but that ses pretty dumb.

So that would be @ $5 mil for 3 years? If that's the case it would be cheaper than the pay day for Anucha Browne Sanders.