Currently, the New York Knicks stand around $5.6 million under the $58 million, league-mandated salary cap. Unfortunately, the roughly $52 million tied up in contracts, only locks down five players for the 2012-2013 season. In order for the Knicks to fill out their roster to 15 players, they’ll have to make some choices, as well as some creative signings.

The Knicks will have three contracts to offer (sort of): The Mid-Level Exception (MLE), the Bi-Annual Exception (BLE), as well as the Veteran’s Minimum. The MLE is valued around $5 million, should the Knicks stay under the cap – otherwise it will be closer to $3 million; the BLE is valued at $1.98 million and the Veteran’s Minimum will cost teams $1.4 million.

In the N.B.A., a team’s owner starts paying luxury tax when their roster’s salary passes the luxury tax line. That line will be around $70 million for the 2012-2013 season. However, due to a special restriction, teams have a $4 million apron they can eat into, without counting as a “tax team.” If a team is above the $74 million, which includes the $4 million apron, they will only be eligible to spend a $3 million MLE, but should the team stay under that line, they are able to offer the full $5 million. Needless to say: a big difference.

JR Smith has a player-option of around $2.5 million, but it’s not very likely he will pick it up – even if he wants to stay in New York. Should JR opt-out of his option, then choose to re-sign with the Knicks, he would be eligible for a 20% pay-hike from his 2011-2012 salary, resulting in a roughly $3 million contract for the 2012-2013 season. That extra $500,000 is a big difference, especially in the case of JR Smith, who is supposedly running his finances dry.

Jeremy Linsanity is a unique case. Let me start off by saying he’s not leaving. Jeremy Lin will be staying in New York for the foreseeable future. Should Lin want to return to New York, without fielding other, more lucrative offers, he could come to terms on an offer-sheet with the Knicks, even before another teams offers him one. For Lin, such a scenario could limit his salary, but New York’s marketability could entice him to take a cheaper deal to make the team better. Should Lin sign an offer-sheet with another team, however, the Knicks will still be able to re-sign him.

Continue reading “Jeremy Lin, JR Smith, Landry Fields and The Knicks’ Cap Situation” »