First, let’s understand the decision in front of the Knicks at the time. On July 5, 2012, when Adrian Wojnarowski was still breaking stories for Yahoo, he reported that
Lin had agreed to a four-year, $28.8 million offer sheet with the Rockets. At that point in time, it was expected the Knicks would match the offer, despite it being back-loaded at $9.3 million in each of the final two seasons as a disincentive for New York to match due to luxury tax implications.
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But the Knicks viewed the negotiations leading to him signing with the Rockets differently. According to Frank Isola, the Knicks became infuriated when they believed Lin asked for
more money from Houston, not less.
The original offer sheet reported by Woj included two $9.3 million payments in the final two years of a four-year contract. The final offer sheet that Lin signed included a balloon, “poison pill” payment of $14.9 million in the third year of a three-year, $25.1 million deal. According to Isola, it was the revision in the contract that infuriated owner James Dolan and led the team to letting their newfound marketing machine walk away that summer.