The Houston Rockets signed Omer Asik to a three year, $25.1 million offer-sheet. Multiple reports say it’s very unlikely for the Bulls to match that offer, mainly because of the way it’s laid out. Asik is set to make $5 million in year one, ~$5 million in year two, then will see his salary balloon up to $15 million in the third and final year.
Last night, Chris Broussard dubbed this type of contract the “poison pill”. He also mentioned that the Raptors could offer Jeremy Lin a back-loaded contract, which would make the Knicks think to re-sign him.
Jeremy Lin’s hypothetical “poison pill” deal would look similar to Asiks – $5, $5, $15 – but would extend one year further, with the fourth year valued at $15 million, as well. In both deals, the first two years are protected by the Gilbert Arenas rule – teams are limited to offering restricted free-agents with 1-2 years in the league more than the non-tax payer’s mid-level exception in the first year, then the second year is subject to a 4.5% raise -, but then opens up in the third and fourth years.
Broussard’s main argument is that in the third year of Lin’s deal, the Knicks would be paying a large amount of luxury tax.
Matching such a contract would give the Knicks four players — Lin, Carmelo Anthony, Amare Stoudemire and Tyson Chandler — making more than $14 million in the 2014-2015 season. Those four players alone would have a combined salary of $72 million, nearly $2 million above the luxury tax.
Yes, the Knicks – I mean James Dolan – would have to shell out a decent amount in year three, but the one thing that separates this contract from any other back-loaded “poison pill” that forces luxury tax is that Jeremy Lin will more than pay for the luxury tax in merchandise sales and stock price.
I wouldn’t be shocked if Jeremy Lin’s “Linsanity” streak from this past 2011-2012 season has already made Dolan enough money to pay for the luxury tax implications. Then, add on two years of Lin for $5 million, selling jerseys around the globe, and you have a gold mine.
While it will be annoying if the Raptors extend such an offer to Lin, by no means will the Knicks be scared away from matching it. Who knows if he really deserves that big contract, but one thing is for certain: Jeremy Lin is a gold mine for the Knicks, and as tons of people will tell you, the NBA is a business.