2012 NBA Off-Season Thread: There's a new team in town
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07-17-2012, 02:01 PM
Change is good.
Join Date: Aug 2005
Location: Brooklyn of course
So if Lin plays up to his potential, he should more than make up for what it costs the Knicks to keep him. But what if Lin doesn't pan out? What if his 26-game sample proves to be an illusion, and he ends up as yet another flash in the pan? Will the Knicks be stuck with an enormous tax bill for an unproductive player?
If worse comes to worst, another new rule can help the team out. The "stretch provision" allows a team to waive a player and extend his salary payments over twice the number of remaining seasons, plus one. So if Lin is waived with one season remaining on his contract, he would be paid his salary over three years.
Here's the important part -- teams also may elect to stretch a waived player's salary-cap hit over the same number of years. So if Lin proves to be a disaster over the next two seasons, the Knicks can waive him, stretch the payment of his $14.8 million salary over three years, and reduce his salary-cap amount to about $4.9 million in each season. This would reduce the team's tax bill significantly. If the Knicks are right at the tax line, a $4.9 million salary would translate to a $7.35 million tax bill. This is much more palatable.
In sum, Lin will continue to be a financial bonanza if he keeps playing up to his potential. If he ends up being a bust, the Knicks have the means to mitigate the damage. The potential upside is well worth the risk.
So logic dictates that sometime before midnight Tuesday night, the Knicks will inform the league that they are matching the Rockets' offer, and Jeremy Lin will remain a member of the Knicks.
As much as keeping Lin will cost them, losing him will cost more.
Tell me again why there is ANY scenario under which it makes sense to let Lin go...?
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