In a battle of wills, Toronto's seems to be greater
Earlier in free agency, we saw the Houston Rockets backload a three-year offer to Omer Asik in order to sign him away from the Bulls.
They offered him $25.1 million for three years, which would force Chicago to give Omer an average annual salary above $8 million. More importantly, the contract was structured so Omer would make $15 million in the final year of the contract.
While this would put Chicago deep into the luxury tax because of its other salary obligations, Houston looks to have limited salary obligations (that could decrease further if it deals Scola and will further decrease when it trades Lowry). That way, Omer Asik will most likely not affect the Rockets' luxury tax status and will act as a large expiring contract that can be used to grab players from teams looking for financial relief (also because Daryl Morey adores underrated post defenders like Chuck Hayes).
Taking a page out of the Rockets' playbook, the Raptors offered Landry Fields the same kind of third-year explosion contract ($20 million/three years).
However, unlike the Rockets, the Raptors used the ability to name any salary in the third year with the idea that it would help them grab another free agent: Steve Nash
Now how does that work?
The Knicks are over the cap, but not in the luxury tax bracket as of today. This means that the Knicks have the full mid-level exception available to them. However, using the full MLE would put the Knicks into the luxury tax bracket and, based on the rules of the CBA, the Knicks would not be able to make any more signings. None. No bi-annual exception, no veteran's minimums, no 10-day contracts.
If a player gets hurt, that is tough because you cannot sign a replacement. This means that the Knicks will probably use the taxpayer's MLE ($3.09 million) in order to avoid those restrictions.
While the Knicks have their "mini-MLE" to offer to Nash, the Raptors have offered Nash $36 million for three years. This makes complete sense for the Raptors, as they lack an identity as a franchise and would be singing the most famous Canadian athlete since Wayne Gretzky (Nash's hero, who is a big part of the Raptors' recruiting team).
At first glance, the Raptors are up about $9 million. The Knicks realized this and started to work on a sign-and-trade to bring Nash to New York.
What would you rather do?
In addition to their "mini-MLE", the Knicks could deal Toney Douglas, Dan Gadzuric (non-guaranteed contract) and Jerome Jordan (ditto). That would bring up Nash's first-year salary with the Knicks to above $5 million.
The problem is that the Suns have no interest in those players as basketball players. The Suns did express their interest in Landry Fields. Add him into the trade and the Knicks can offer a first-year salary above $6 million and the opportunity to contend for a title. That stacks up much better against the three years and $36 million the Raptors offered.
Thus, the Raptors made the offer to Landry Fields. Since Fields agreed, that hurts the Knicks. The CBA prohibits the match-and-trade. Therefore, if the Knicks match, they cannot use Fields in a trade. If they do not match, then they lose Fields' rights and cannot use him in a trade.
This forces the Knicks to either give up on Nash or offer Shumpert or Lin—a far steeper price than Fields.
So the Raptors have put a serious dent in the Knicks' plans to have Nash play for them. Not only that, but they may salvage Landry Fields' asset value by having him play with Nash. Like many of those who thrive with Nash, Fields thrives in a fast-paced, ball-movement-oriented offense (the flip side is that Toronto seems to want to start Terrence Ross and DeMar DeRozan, which will lower Fields' time on the floor with Nash).
Did the Raptors overpay Fields in order to secure Nash? Yes. Is it worth overpaying Fields to bring in a national hero and give the franchise an identity? Absolutely. Well played, Toronto. Well played.