Phil Jackson has landed Carmelo Anthony. So what’s next?
Below, we take a brief look at what Carmelo’s re-signing means for the New York Knicks and how Jackson may use his flexibility going forward.
Summer of 2014: The Knicks are in a tough spot when it comes to the salary cap. The specific details of Carmelo’s contract have not been released, but it’s safe to assume that Anthony’s deal leaves the Knicks over the salary cap.
Unless Phil makes a roster-shifting trade, the Knicks will have only the taxpayer’s midlevel exception and the veteran’s minimum exception to offer free agents.
The taxpayer’s midlevel exception starts at $3.27 million and can be used in a contract that extends as long as three seasons. It can also be split among players. Veteran’s minimum exceptions can be as long as two seasons. The value of the contract is based on that player’s years of service.
Jackson said on Sunday that the Knicks would be prudent in their spending for the rest of the summer and seasons beyond. He wants the Knicks to avoid paying the luxury tax, something they have done in each season since the new CBA was ratified in 2011-12.
“I want to be fiscally responsible,” Jackson said. “We’ve been a taxpayer team for a little bit and we want to limit that.”
With nine guards currently on the roster, Jackson will look to balance things out by adding a big man.
Here’s another aspect to consider: In the days prior to Carmelo re-signing, Jackson shopped forwards Amar'e Stoudemire and Andrea Bargnani in trade talks in an effort to clear cap space to entice Pau Gasol to sign with New York, sources say.
Gasol is now in Chicago, so it’s logical to assume that those talks are now dead. But a source with knowledge of the Knicks’ thinking said recently that Jackson still wants to add talent around Anthony, and Anthony has let it be known that he wants to win as quickly as possible.
So it wouldn’t be all that surprising if Jackson continued to shop Stoudemire and Bargnani. The issue, of course, is finding a team that will take either player without having to sacrifice a valuable piece such as Tim Hardaway Jr. in the process.
Also worth noting when it comes to trades: The Knicks have a $3.7 million trade exception courtesy of the Raymond Felton-Tyson Chandler trade. This allows the Knicks to bring back $3.7 million via a trade for one or more players without having to match salaries.
Summer of 2015: This is when Carmelo taking less money will help the Knicks. New York currently has six players under contract for the 2015-16 season.
Jackson said on Sunday that Carmelo took less than maximum money early in his contract to help the Knicks.
But since we don’t yet know the exact figure, let’s assume Carmelo makes maximum money in 2015-16 for the purposes of this story. If that’s the case, he will earn $24.1 million that season.
The Knicks will also have a first-round pick that season. Let’s assume, for the purposes of this exercise, that pick makes $1.6 million in 2015-16.
Let’s also assume the Knicks renounce any free agents they have that summer. Those five roster spots would be replaced by cap holds totaling $2.6 million.
Add that to the salaries above and you get $48.7 million in committed salaries. Again, that’s assuming Carmelo is making max money in Year 2 of his deal.
So how much cap space would this leave the Knicks?
The cap this season was set at $63 million, an increase of nearly 7.5 percent from last season. So let’s assume the 2015-16 cap will be $65 million, a conservative estimate.
This would give the Knicks about $16.3 million in cap space. This is where Anthony’s pay cut looms large. If Anthony accepts less money in Year 2 of his deal, it gives the Knicks added financial flexibility in the summer of 2015, when they hope to be able to lure a star to play alongside Anthony.
This is crucial because a player like Memphis’ Marc Gasol will be eligible for a max salary of at least $16.4 million in the summer of 2015.
So the Knicks will be able to afford Gasol at the max, if they wish, thanks to Anthony’s salary -- assuming the cap increases at a similar rate next season that it did this season.
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