Off-Season Primer: Financials

Grunwald

Well, the New York Knicks are out of the playoffs. As much as that sucks, it’s time to focus on the upcoming season… already.

As you know, the Knicks have several high-salary players and adding to this roster during the off-season is often a daunting task. With that said, Mr. Grunwald has done a fantastic job adding minimum salary players the last two years, so there’s no reason he cannot do it again. Additionally, the Knicks will have a few other vehicles to add players.

Before we can look at the types of moves the Knicks can do, let’s look at their financial position heading into the off-season.

Under Contract:

  • Amare Stoudemire: $21,679893
  • Carmelo Anthony: $21,486,177
  • Tyson Chandler: $14,100,538
  • Marcus Camby: $4,383,773
  • Steve Novak: $3,750,001
  • Raymond Felton: $3,637,073
  • Jason Kidd: $3,090,000
  • Iman Shumpert: $1,703,760

So, heading into the 2013/2014 season, the Knicks will have a total of $73,831,215 committed to eight players. Just a reminder, but the salary cap will be about $58 million for the upcoming season, and the luxury tax line will be around $70 million – give or take a few million.With that said, the Knicks are over both the salary cap line and luxury tax line, with just eight players under contract. Because of that, they will be limited in the types of contracts and moves they can make.

First off, whether the Knicks can pull off a sign-and-trade will be completely dependent on whether or not J.R. Smith picks up his ~$2.9 million player option. In the new CBA, teams above the $74 million tax apron line are not allowed to complete sign-and-trades. As I outlined earlier, the Knicks’ salary commitments currently totals $73,831,215, which is just below the $74 million line that would forbid them to complete a sign-and-trade. Should J.R. Smith pick up his player option, though, the Knicks will be over the tax apron and be unable to complete a sign-and-trade.

Should the Knicks not complete a sign-and-trade, which looks like will be the case, they will have the tax-payer’s mid-level exception to sign a player this offseason. For the 2013-2014 season, the “Mini MLE” will be about $3.18 million.

Quickly, let’s look at why the Knicks will have the Mini MLE and not the full MLE: A team has to be under the $74 million tax apron if they wish to use the full MLE. So, in order for the Knicks to do so, they’d need to shed some salary. At this point, the only realistic way for the Knicks to shed the necessary salary would be for Marcus Camby and Jason Kidd to retire. Now, a team is allowed to use the Mini MLE if they wind up over the $74 million apron after the signing. However, teams cannot use the Mini MLE if they also complete a sign-and-trade that same offseason.

The Mini MLE can be used for up to three years and teams can offer 4.5% raises year-over-year, meaning the Knicks could offer a free-agent a three year, $9,985,150 contract.

As mentioned throughout this post, J.R. Smith has a player option of about $2.9 million that he could pick up, should he wish to return to the team. There are some alternative contract options for J.R. Smith, but I will cover those in their own post.

For the most part, that’s the Knicks’ financial outlook for the upcoming off-season. They’ll likely have the Mini MLE and veteran minimum contracts to offer. Over the next couple days, I’ll crank out a few more “off-season primers,” but this is a pretty solid overview. If you have any specific question, leave a comment and I’ll answer.

  • Please

    can you please start an online petition for Camby and Kidd to retire? They should be spending more time with their kids and all that.

  • http://www.facebook.com/francisco.perez.710667 Francisco Perez

    What happens if the Knicks buy out Camby or Kidd? Do they still count against the cap? Or is it better to trade them along with money to another team and let them dump salary and possibly get someone useful for the Knicks?

    • http://twitter.com/JoJigga J Bernard

      Yes it still counts against cap. Just opens up roster space.

  • Rich

    Do we have the usual $3M available to use for a 2nd draft pick? I’m hearing we don’t; that we used it already in the Felron deal with Portland…Is that true? I’d really like to see us try to purchase an extra pick late pick in this draft, something like what we pulled off with LA for Toney Douglas a few years ago.