clock menu more-arrow no yes

Filed under:

Jeremy Lin Rumors: CBA's 'Stretch Provision' Could Sway Knicks Into Matching Rockets

As the deadline for the New York Knicks to match the Houston Rockets contract offer to Jeremy Lin quickly approaches, speculation is running rampant about what the Knicks front-office brass and owner James Dolan will decided by 11:59 p.m. ET.

Of course, the biggest issue being debated is whether or not Lin, who has played well is just about 26 NBA games, is worth the $30-plus million that will cost the Knicks in the final year of the three-year contract. Some believe Lin isn't worth it, while others believe he is.

Regardless of the mass opinions, the biggest question is: If Lin turns out to be a bust, can the Knicks afford keeping him considering they have to pay big-time contracts to Carmelo Anthony, Amare Stoudemire and Tyson Chandler?

The answer is yes, and the explanation comes from ESPN.com insder Larry Cook, who explained the new Collective Bargaining Agreement's "stretch provision":

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.

In the end, if money isn't going to be that much of an issue, as Cook explains, will Dolan decide keeping Lin is what's best? Only speculation can be made until the deadline, but Cook's explanation could make those Linsaity fans breath a bit easier.

-- See Posting and Toasting for reaction to this development with the Knicks