One of the most commonly misunderstood aspects of NBA finance is the "give the guy what he deserves" principle. In a fair and just world, basketball players would get what they "deserve" — that's to say, close to what they actually "earn," at the gate, through jersey sales, by contributing to team victories, which contribute to gate receipts and TV money and all that. But that would be chaos, and we just had a lockout to show why. So we have all sorts of complicated rules to make sure teams are kept in check, to make sure every team can compete. (You might find this a shame; if there were no cap, the Knicks could essentially be the Yankees.) These rules are nearly impossible to understand, but they're in place for a good reason: Players should be able to earn the most they can while existing within the current structure. Which brings us to Jeremy Lin and how it's possible he may blow up the Knicks for the next five years.
As many know and understand, Lin is a restricted free agent this off-season, and the general consensus is that the Knicks will sign him for "whatever he wants," considering the off-court benefits and revenue streams he provides (and also because, lest we forget, he saved the Knicks' season last year). But in a terrific piece on ESPN New York, Jared Zwerling talks to our old pal Larry Coon about the Knicks' salary-cap issues this off-season, and it turns out, Jeremy Lin is smack in the middle of it. Specifically: If he takes $3 million or less, the Knicks can afford to make other off-season moves. If he takes $5 million — which one would think he'd be more than willing to demand — the Knicks are essentially locked in with the roster they have, except for losing J.R. Smith, and they'll be unable to bring in anyone else.
It's about a lot more than $2 million; it's about something called an "apron" and the hard cap. Zwerling explains:
[Owners] defined a point $4 million above the tax line, which they call the "apron," where restrictions [to luxury tax-paying teams, like the Knicks] kicked in. With an anticipated $70 million tax level, the apron will come in around $74 million this summer. One of the restrictions placed on teams above the apron was the smaller mid-level exception of about $3 million, while teams under the apron could have the larger mid-level exception of about $5 million. Since a team above the apron can't offer more than $3 million in a mid-level contract, the converse is also true: a team that offers more than $3 million in a mid-level contract can't subsequently exceed the apron.
The consequences are potentially devastating for teams with payrolls below the apron. If a team spends more than $3 million of its mid-level exception, then the apron becomes a hard cap for the remainder of the season. If you're a General Manager trying to assemble a winning roster, "hard cap" is an ugly, ugly phrase.
We'll say. If Lin's agent demands more than $3 million — or if another team offers him more than $3 million and the Knicks match it — the Knicks are stuck with a hard cap; they'll only have $3 million to spend on the rest of their roster, which is, essentially, pennies. The reason is the Knicks claimed Lin off waivers, a rare situation that doesn't trigger Bird rights and thus causes the whole "apron" problem. It's essentially a loophole that works against the Knicks. It's such a wide loophole, though, that the players' union is trying to shut it, says the Times' Howard Beck. The union hopes to have the issue settled by July 1.
But if they don't, or if the Knicks don't catch a break here ... the Knicks are in serious trouble. Because they have to sign Lin — or Steve Nash, to whom, presumably, they'd give the Lin contract if they passed on Lin — they won't have money for anybody else. Goodbye Steve Novak; goodbye J.R. Smith; goodbye (maybe) Landry Fields. You know how players are always being criticized for taking more money instead of helping their team? Lin's off-season situation, barring a new ruling in the union appeal, is uniquely positioned to put that criticism in proper context. If Lin, who has never made more than the league minimum and may only have one chance to cash in, takes what he is worth, the team he's going to be playing for will be demonstratively worse. If he takes less than he's worth, he may be wasting the best earning opportunity he'll ever have.
Since Linsanity began, it has seemed the fate of the Knicks franchise has been in Jeremy Lin's hands. It appears this is even true when the Knicks' season is over.