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Rim Rocking Report: Lin to the Rockets a Basketball & Business Decision

Posted By Warren Shaw On Jul 18 2012 @ 2:13 pm In NBA | 5 Comments

Nothing is for certain in the NBA. We have learned this through the multitude of rumors and “promises” that have been broken by both teams and players over the last 8 months or so.

But every now and then something still shocks me and the decision the New York Knicks made to not match the “poison pill” contract (three-years $25.1 million) the Houston Rockets offered to Jeremy Lin…well let’s just say I find it interesting.

I am not a proponent of overpaying players and the reality of the situation is despite the popularity of “Linsanity” the guy only played 35 games last year. He averaged 14.6 points and 6.2 assists in those games but captured the hearts of many with his basketball rags to riches to story. I mean how many Harvard graduates slept on someone’s coach while they struggled for “work”.

The amount of attention the Knicks received from “Linsanity” can’t even be translated into a monetary amount but Lin made New York the center of the basketball universe for a little over a month straight.  The Knicks were floundering and Carmelo Anthony was injured before the former Lin literally messiahed their season.

As a result, New York had every intention of matching almost any offer Lin received as a restricted free agent this summer, especially after the NBPA won a suit that granted the Knicks Lin’s early-Bird rights. It was supposed to be a foregone conclusion that Lin would be back at the point guard helm for the Knicks looking to build chemistry with Anthony and Amar’e Stoudemire. The Rockets monkey-wrenched those plans with their back loaded contract offer that would pay Lin an estimated $14.8 in year 3 of his deal.

Escalating contracts are nothing new in the NBA but with the new collective bargaining agreement in place, teams over the cap will face stiffer penalties than ever starting next summer. Rockets GM Daryl Morey looked at the current Knicks payroll and calculated that New York would have to pay nearly $30 million in luxury tax penatlies 3 years from now if the Knicks matched the offer and kept Lin.

Now that is budget forecasting.

The question for the Knicks then became “How much is Linsanity really worth?”.  The Knicks were faced with balancing the potential marketing opportunities Lin would bring to them versus his ability to help lead them to a championship. They had already added Jason Kidd who would have been a great mentor for Lin but looking down the road at $30 million in taxes proved to be too costly.

35 games was not an ample enough sample size to invest that type of commitment into Lin. What if he was terrible on the court which would immediately detract from his endorsement opportunities not to mention leaving the Knicks with a hole at point guard. They would not be able to amnesty him and if he failed the contract would be extremely difficult to move in a trade.  In this case $25.1 million wasn’t just $25.1 million or a little over $8 million/season.

So they let him walk…they had to for both basketball and business reasons.

Meanwhile for those same two reasons the Rockets get their man. Houston was without a legitimate point guard on the roster after trading Kyle Lowry to the Raptors and not giving in to Goran Dragic’s contract demands. The addition of Lin gives them a young point guard to grow alongside all of the promising rookies and young talent on the roster.

Lin also gives them a pseudo Yao Ming replacement from a marketing standpoint with the very vast Chinese population. Even with Yao’s retirement the Rockets are still China’s team so to speak and will have a new hero/spokesperson to rally behind in Lin. This is a win-win for the Rockets.

Ultimately Lin’s departure from New York seems like the astute play for both teams…right now. The money the Knicks have tied up into others on their roster is what really deterred them from matching.

New York picked an interesting time to be frugal and can only hope “Linsanity”  as great business doesn’t also develop into great basketball but for the Rockets the two are already wrapped together as one.


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