Tuesday, August 16, 2005
The Knicks Fail to Use the Allan Houston Rule
Part of the new collective bargaining agreement in the NBA was that teams had a one time opportunity to buy out a player's contract without having to pay the luxury tax. This rule was unofficially called the Allan Houston rule by lots of people in the league because the contract with the most glaring payment to production ratio in the league is Houston's. He hasn't contributed significantly to the Knicks in 2 years because of his arthritic knees.
He's costing the Knicks about $98 million in future revenue since he's owed $49 million and since they are over the salary cap, they have to pay a dollar for dollar luxury tax for the amount they are over, essentially doubling Houston's contract. By buying out Houston's contract they could have saved the $49 million in luxury tax.
Except they didn't do that. Instead they bought out the contract of Jerome Williams, which saved them $23 million, significantly less than the $49 million they would have saved from Houston. The reason they did this is because the Knicks are fairly confident that Houston is going to retire if he's not ready to play at the start of the season. If he retires due to injury, then the Knicks will save almost the entire $98 million they otherwise owe. They would still have to pay Houston, but it would be covered under an insurance policy, which means it wouldn't come out of their pockets.
I like Allan Houston. I don't love him. He's not one of the greatest Knicks ever, and he's certainly not worthy of the largest contract in team history, which is what he has right now, but he was a great contributor to the team. It's too bad that he can't get himself healthy, but he really needs to go and retire. If he does come back, there is no way he will produce near the level he once did, and there's also not really room for him, Jamal Crawford, and Quentin Richardson on the roster. There's no viable means of getting rid of Crawford or Richardson, so Houston is out by default.
My advice to Allan Houston, take the $49 million and run. Well, he can't run because of the knees, but take the money and walk.
He's costing the Knicks about $98 million in future revenue since he's owed $49 million and since they are over the salary cap, they have to pay a dollar for dollar luxury tax for the amount they are over, essentially doubling Houston's contract. By buying out Houston's contract they could have saved the $49 million in luxury tax.
Except they didn't do that. Instead they bought out the contract of Jerome Williams, which saved them $23 million, significantly less than the $49 million they would have saved from Houston. The reason they did this is because the Knicks are fairly confident that Houston is going to retire if he's not ready to play at the start of the season. If he retires due to injury, then the Knicks will save almost the entire $98 million they otherwise owe. They would still have to pay Houston, but it would be covered under an insurance policy, which means it wouldn't come out of their pockets.
I like Allan Houston. I don't love him. He's not one of the greatest Knicks ever, and he's certainly not worthy of the largest contract in team history, which is what he has right now, but he was a great contributor to the team. It's too bad that he can't get himself healthy, but he really needs to go and retire. If he does come back, there is no way he will produce near the level he once did, and there's also not really room for him, Jamal Crawford, and Quentin Richardson on the roster. There's no viable means of getting rid of Crawford or Richardson, so Houston is out by default.
My advice to Allan Houston, take the $49 million and run. Well, he can't run because of the knees, but take the money and walk.
# posted by ChuckJerry : 8/16/2005 01:05:00 PM
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get this.... http://www.nypost.com/sports/knicks/27104.htm
Jerome Williams is going to retire and be offered an office position in the Knicks orginization. This apparently was a planned event. Which makes Isiah's decision to use the amnesty clause on Williams even more confusing. Williams' salary will now be covered by the insurance and not the Knicks. So why did he waste the move on Jerome and not some else like Malik Rose?
Jerome Williams is going to retire and be offered an office position in the Knicks orginization. This apparently was a planned event. Which makes Isiah's decision to use the amnesty clause on Williams even more confusing. Williams' salary will now be covered by the insurance and not the Knicks. So why did he waste the move on Jerome and not some else like Malik Rose?
My bad. Jerome Williams is not retiring for medical reasons, so insurance will not kick in and cover his salary. But even so, why waive a player you knew was going to retire anyway?
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