As a New York native, I was disappointed to hear that the Knicks declined to match Jeremy Lin’s offer sheet, allowing him to sign with the Houston Rockets.  Watching Lin’s emergence out of obscurity to become an impact player (and the phenomenon that was Linsanity) was one of the more exciting things to happen to the Knicks in recent memory for this tepid NBA fan.  I figured it was a no-brainer that he would be re-signed by the Knicks, especially after the arbitrator ruled that Lin (and Steve Novak) would be granted “Bird Rights” that would allow the Knicks to pay them more than what their cap situation should allow.  On top of all the promise Lin showed on the court, his off-court financial impact seemed like sufficient incentive to keep him.  Maintaining fan enthusiasm would seem to be an important priority with the Nets moving to Brooklyn this year, and looking like a possible contender.

The main justification for the decision seems to be the third year in Lin’s contract, which would pay him about $15 million and cost the Knicks a lot of money in luxury tax.  There are certainly a number of angles to this story, such as whether the decision to let Lin go was a financial move, a basketball move, or the result of petty machinations of a petulant owner.  I won’t claim to know enough about the Knicks or the NBA to single out one of these as the decisive cause, but you can consult Moshe if you want a more informed (and impassioned) take.

While there are certainly major differences here, the Lin decision brings to mind some tough choices that the Yankees may have to make in the near future if they are serious about getting their payroll below $189 million in 2014.  The impending free agencies of Curtis Granderson, Robinson Cano, and Derek Jeter are interesting parallels.  As has been discussed extensively on this blog and elsewhere, if the Yankees are able to get their 2014 payroll below $189 million, they will be able to save a ton of money.  They will do this by resetting their luxury tax rate and having a portion of their revenue sharing payments refunded, the latter of which is particularly compelling because that money subsidizes their small-market competition. [Read more…]