Offseason Outlook: New York Knicks

The challenge facing the Knicks this offseason has been well-documented by now. I even examined it already myself. But let's recap the highlights:

• The significant amount of long-term money committed to Carmelo Anthony, Amare Stoudemire, and Tyson Chandler means the Knicks are already over the cap with only five players under contract.
• The Knicks have a number of free agents they'd like to retain, including Jeremy Lin, Landry Fields, J.R. Smith, and Steve Novak.
• The Knicks hold Fields' Early Bird rights, but assuming the players' union doesn't win its appeal, New York will only have Non-Bird rights on Lin, Smith, and Novak.
• In that case, the Knicks would almost certainly have to use some or all of their mid-level exception to match offers for Lin. If they use more than $3MM of the MLE, their 2012/13 payroll will essentially be hard-capped at $74MM, the tax "apron," since taxpaying teams aren't permitted to use more than a $3MM mid-level.

It's a fascinating predicament for the Knicks. If they match a big offer for Lin, bringing back Fields, Smith, or Novak becomes difficult, and signing an impact free agent would probably be a pipe dream. Letting Lin walk certainly seems to make the most sense from a basketball and cap perspective, but will the team want to risk fan backlash and lose the marketing opportunities that Linsanity created?

There are ways the Knicks could avoid letting the Lin decision affect their entire offseason, but none of them are particularly likely or appealing. Trading one or more of Anthony, Stoudemire, and Chandler would give the team some breathing room, but owner James Dolan seems unwilling to part with Carmelo. The Knicks would also likely be reluctant to move Chandler, who was last year's big signing and this season's Defensive Player of the Year. And while I'm sure the club would be very open to dealing Amare, the uninsurable $65MM+ remaining on his contract makes that virtually impossible.

If a trade isn't consummated, perhaps one or more of the Knicks' free agents would be willing to sign a discounted deal to make things easier on the club. But that's equally hard to imagine. Why would Lin, for instance, sign a minimum-salary contract when this summer represents his best – and perhaps only – chance at a huge payday?

Retooling this Knicks' roster will be tricky, but I think if Lin signs something close to a max offer sheet with another team, New York should let him go. Due to the Gilbert Arenas provision, matching such an offer would mean the Knicks would be on the hook for eight-digit salaries for Lin in the third and fourth years of the contract. In that scenario, the Knicks would have committed an incredible $75MM+ to Anthony, Stoudemire, Chandler, and Lin for the 2014/15 season, long after more punitive luxury-tax penalties take effect. The Knicks have already sacrificied cap flexibility by inking three long-term, big-money deals. Adding a fourth big contract to the mix seems to be asking for trouble.

If the Knicks let Lin walk, the team could comfortably re-sign Landry Fields and have its full mid-level exception to use on another free agent. I expect top point guards like Steve Nash and Goran Dragic will get offers that exceed the $5MM mid-level, but it's not inconceivable that Nash, Dragic, or another player would be willing to accept a slightly discounted deal for a chance to play in New York.

The cap restrictions the Knicks are up against this summer are part of what makes building an NBA roster such a challenge. Whichever approach GM Glen Grunwald and his staff decide to take, I'll be very interested to see how the team's offseason plays out and what its roster looks like in the fall.