Where Do The Knicks Stand, Financially?

I’ve had many people ask me if different financial moves are possible, so here’s a post explaining what the Knicks can offer.

When news broke that Jason Kidd and the New York Knicks agreed to terms on a deal, no numbers were leaked. Now we know that the Knicks are in the midst of working out a sign-and-trade with the Dallas Mavericks for Jason Kidd, so that they can maintain their tax-payer’s MLE for another signing. Should they not come to an agreement, though, the Knicks will likely give Kidd their mini-MLE.

According to Larry Coon, if a non-tax paying team sends out $0 to $9.8 million in out-going salary, they are eligible to take back up to 150% of the out-going salary, plus $100,000. With that said, the Knicks can put together two sign-and-trade offers.

Offer 1:

  • Toney Douglas has a $2,067,880 contact for the upcoming year. If the Knicks were to use Douglas in a sign-and-trade, they could take back 150% of his salary, leaving $3,201,820 for a potential addition to the team.

Offer 2:

  • Dan Gadzuric ($1,352,181) and Jerome Jordan ($762,196) both have non-gaurenteed contracts that can be immediately waived upon trading for. If the Knicks were to use Gadzuric and Jordan in a sign-and-trade, they could take back $3,281,565.5 in salary.

Both of these offers would be packaged with cash considerations, and/or future draft picks. The Knicks cannot trade their upcoming 2013 first-round draft pick, because of the Stepien Rule – “teams are restricted from trading away future first round draft picks in consecutive years” – but could deal future picks or second round selections (can’t deal 2013 first-rounder because they sent the 2014 pick to Denver, but can trade 2015 picks immediately after the 2014 draft). Also, either deal could be supplemented with Josh Harrellson’s non-guarented $762,196 deal, which would raise offer 1′s first-year salary to $4,345,114 and offer 2′s first-year salary to $4,414,859.5.

So, since there is no limit on how many sign-and-trades a team can pull off, the Knicks could use two sign-and-trades, as well as keep their mini-MLE, which would give the Knicks three, roughly $3 million contracts to offer. One will be going to Kidd, not sure which yet, if Camby decides to join the team, one would go to him, and then the Knicks have one left.

The Knicks could also sign Jason Kidd to the mini-MLE, then combined their two offers into one deal, giving a potential free-agent a starting salary of $7,516,679.5. With this deal, the Knicks can pull themselves closer to a player of OJ Mayo’s caliber, who will demand more than the mini-MLE. Of course, in this scenario, the Knicks would only be able to offer Marcus Camby the veteran’s minimum, which would likely take them out of the running for the former Knicks big man.

After the Knicks decide on what to do with their sign-and-trade assets, as well as their mini-MLE, they will then start offering several veterans the veteran’s minimum, pitching the chance the win.

The Knicks have three contracts to offer: Sign-and-trade, mini-MLE and the veteran’s minimum. Jason Kidd will demand one contract valued around $3 million a year, but aside from that, the rest is up in the air.

If you have any more question, feel free to leave them in the comments and I’ll update this post.

  • eyerishyank

    Thanks- wasn’t aware that the knicks aren’t considered tax payers- so I was calculating 125%. I have a couple of questions with this…is there any chance the knicks work out a S+T for Fields allowing them to recoup a trade exception? My thought is no because the knicks cant sign Fields to the same deal outright, but that would be a great asset.

    If Novak decides he wants to go to another team, can the knicks S+T him? Say, for example, OJ Mayo wants 10 mil, can the knicks use the package you mentioned and also send Novak (if he agrees) to bridge that gap?

    • Jonah Kaner

      Yes, it’s possible the Knicks could work out a sign-and-trade with Fields, but highly unlikely. Like you said, it would involved Fields taking a pay cut just to help out the Knicks.

      Novak can be signed-and-traded, but Knicks want to retain him. Since the Knicks can offer Novak more than any other team (bird-rights), I say it’s pretty likely he’ll be returning.

      • Anonymous

        Actually other teams could offer Novak more than the Knicks – but its extremely unlikely. Most the Knicks can offer Novak is ~$5mil starting (Early Bird rights) – Novak has more than 4 years in the league, so he’s technically eligible to make up to the max with another team that has the cap room to offer it.

        Also, Fields can’t be sign-and-traded for the deal he agreed to with Toronto because the Knicks aren’t allowed to sign him to that deal themselves (they can only match it).

        Also – The Stepien Rule applies only because the Knicks don’t have a 2014 pick (going to Denver) – they can’t trade 2013 or 2015 right now (they can trade 2015 after the 2014 draft) (2016 is a swap with Denver – they can still trade it away).
        If they had their 2014 pick – they’d be allowed to trade away the 2013 pick the second after making the 2012 pick.

      • Anonymous

        Couldn’t the raptors rescind fields’s offer before the 11th, which could be likely if the fields offer was just to block Nash to the Knicks, and then the Knicks work a sign and trade w another team w fields?

        • Anonymous

          they could rescind the deal – but the GM would look really bad – and agents would not want to deal with him.

  • Kmbclub128

    How about Lin, Novak, Jeffries?

  • Kmbclub128

    Love to see Lin sign with Knicks, if not, can I refund the jersey #17 to Knicks? I need

  • Seymore Buddha

    Any chance they sign and trade with houston for a package of: Toney, Gadzuric, Jordan, Josh, 2nd rd picks, and cash to Houston for Camby/Courtney Lee? If camby demand 3-4.5 mil for 3 years and Lee takes 2.5-3mil in a split of the 7.5 mil. That coupled with resigning Lin/Novak/Bibby/JR/Jeffries seems perfect until shump comes back from injury.

    • Lawrence Smith

      We’d have to fight the Celtics because they want Lee. They just lost Ray Allen. Lee wouldn’t start for them though so we’d have that over them. We don’t have a starting 2 guard yet. James White sure as hell isn’t starting and JR Smith likes coming off the bench.

  • ccUK

    Not 100% sure, but timing of these sign and trades look key. As it stands, the Knicks are below the tax threshold, so I guess they are eligible for the 150%+$100k trade scenarios. But if they use the mini-MLE, match JLin, sign their own free agents then they would be a tax paying team and only eligible for the 125%+$100k trade scenarios.

    • Jonah Kaner

      Like you said, timing is key.

  • Jfmahon

    Any chance that Toronto rescinds their offer to Landry Fields now that they blew up our chances of getting Steve Nash? Everything during moratorium is only verbal so they aren’t required to overpay him now that they won’t be getting Nash either way

    • Jonah Kaner

      Yes, but as SomeGuy3283 said, the Raptors would look really bad and future free-agents might hesitate agreeing to a deal with them.

  • Anonymous

    Good post!

    So, if we play this right we could possible make a play for Camby, Kidd, and Foye. I wonder what kind of offers Foye has gotten thus far. Before the 1st of July it sounded like he was open to coming to NY for the 3M MLE.

    • Jonah Kaner

      Yes, it’s possible. It would take some sweeteners in order to entice teams to cooperate with us.