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NBA Free Agency: Killing the Myths About the N.Y. Knicks' 2012 Cap Space

Bryan Toporek@@btoporekFeatured ColumnistMay 19, 2011

LOS ANGELES, CA - FEBRUARY 20:  Chris Paul #3 of the New Orleans Hornets and the Western Conference, Carmelo Anthony #15 of the Denver Nuggets and the Western Conference and Kobe Bryant #24 of the Los Angeles Lakers and the Western Conference on the floor in the 2011 NBA All-Star Game at Staples Center on February 20, 2011 in Los Angeles, California. NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Jeff Gross/Getty Images)
Jeff Gross/Getty Images

One of the most prevalent questions about the upcoming mega-class of 2012 free agents has been, "Which one of the superstars will the New York Knicks land? Chris Paul, Deron Williams or Dwight Howard?"

Problem is, it's all but a pipedream at this point.

Barring a Hanukkah-esque miracle with the new CBA, or a sign-and-trade pulled from thin air, the Knicks won't be landing any of the megastars in 2012. You can thank Knicks owner James Dolan for that.

Let's examine a few simple truths about the Knicks' 2012 free agency prospects, with one very large caveat (who knows what's going to happen with the new CBA?):

• In 2012-13, the Knicks have $19.45 million devoted to Carmelo Anthony and $19.95 million devoted to Amar'e Stoudemire, according to HoopsHype. That jumps to roughly $21.5 million for Anthony and $21.7 million for Stoudemire in 2013-14.

• The Knicks currently only have three players signed through 2012-13: Anthony, Stoudemire, and the $1.675 million contract of Renaldo Balkman. (They have a $2 million team option on Toney Douglas, too.) Those three players alone (not including Douglas) will suck up $41,073,799 of the Knicks' cap space in 2012-13.

• The NBA's current salary cap for the 2010-11 season is $58 million.

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The owners are well on record at this point as wanting to slash $750 million worth of player salaries in the next CBA—a proposal that will do no favors to the current salary cap structure. In fact, the owners' most recent CBA offer reportedly involves a $45 million "hard" cap (opposed to the NBA's current "soft" cap), according to Sports Business Journal.

Currently, all NBA teams must spend at least 75 percent of the amount of the salary cap, but an escrow known as the luxury tax punishes teams who exceed the salary cap by over a certain amount of money. (In 2010-11, the luxury cap limit was set at $70.3 million.)

In the current system, teams over the luxury tax limit pay a dollar-for-dollar tax for the amount on the roster exceeding the luxury tax limit. That tax is distributed amongst all the teams who don't exceed the cap. One could argue that small market teams without Mark Cuban's bankroll benefit from such a revenue-sharing concept.

Instead, the NBA's newest proposal says teams may not exceed the $45 million cap for any reason. It also seeks to reduce the owners' liability in guaranteed contracts and aims to reduce the length and value of maximum free agent contracts.

One can only assume that current salary rollbacks would accompany such a proposal; otherwise, it's hard to figure how a team like the L.A. Lakers (current payroll: $91.65 million) will survive without a massive contract firesale.

How does all of this CBA talk relate to the Knicks? Well, let's first refute the most common refrain from Knicks 2012ers: "Chauncey Billups' $14 million contract expires in 2012 and frees up that cap space for us!"

Yes and no.

Yes, Billups' contract expires after the 2011-12 season (assuming there is a 2011-12 season). No, the Knicks can't use that $14 million worth of cap space to sign another max free agent like CP3, D-Will or Howard without pulling an absolute heist of a trade, either during next season or in the summer of 2012.

Under the current CBA, teams can't exceed the soft cap of $58 million to sign a free agent without using certain exceptions. Because the Knicks have $41 million committed to only three players in the summer of 2012, the Knicks will have a roster charge worth the minimum rookie's salary ($473,604 in 2010-11) for every player below 12 that they have on the roster. (Credit to Larry Coon's incomparable Salary Cap FAQ for all the links in this graf.)

Long story short, assuming the CBA rules stay largely the same and the salary cap remained at $58 million, the Knicks would have approximately $12.75 million worth of cap space for free agents if they renounce every player besides Anthony, Stoudemire and Balkman.

If the Knicks were to land Paul, Howard or Williams through free agency, they'd be relying on those players taking a massive pay cut (especially comparable to Anthony and Stoudemire's salary), and would be forced to fill out the rest of their roster with nothing but minimum-contract players.

Given that the Knicks can't rely on nine minimum contract rotation players, in all reality, they'd have about $10 million to offer to one of the superstars—an offer other teams (see: the Clippers and Nets) will assuredly be able to trump.

As the Miami Heat proved last night, a Big Three alone can't net you an NBA championship—you need role players (Udonis Haslem) to step up at some point on your championship journey. You're not getting those types of role players with minimum contracts; you're getting a 39-year-old Shaq or Zydrunas Ilgauskas putting up DNPs in the most important games of your season.

Why can't the Knicks just trade Billups' $14 million contract for one of the superstars in the 2012 class next season? Well, beyond Billups' expiring contract, the Knicks have virtually no desirable assets available to be traded, largely thanks to the Anthony trade. They have Landry Fields, the No. 17 pick in this upcoming (somewhat crappy) draft, and... Bill Walker? They're scraping the cupboards here already.

Better yet, the Knicks traded their 2012 first-round pick to Houston in the Tracy McGrady deal (top-5 protected), and sent their 2014 first-round draft pick for Anthony. Because teams are prohibited from trading their own picks in consecutive years, the Knicks don't have a first-round pick of their own available to trade until at least 2016.

If the Knicks wait until free agency opens in the summer of 2012, they'd essentially be relying on a sign-and-trade structured around Billups, Fields and a 2016 first-round draft pick in exchange for one of the three superstars.

The current CBA also restricts teams over the salary cap from receiving more than 125 percent plus $100,000 of the salaries they're trading away. Seeing as the Magic will almost assuredly attempt to package Gilbert Arenas' toxic contract with Howard if they relent and trade him, the Knicks simply won't have the cap space to absorb Arenas' deal without trading Anthony or Stoudemire.

A Billups + Fields + first-round pick for Paul or Williams deal technically works under the current cap structure, but wouldn't the Nets or Hornets hope to fetch a bit more for their superstars?

The death blow to the Paul-Williams-Howard dream came when the Knicks extended Anthony under the current CBA conditions, allowing his salary to balloon to over $20 million/year by the end of his contract.

The Miami Heat's Big Three worked so well because they each left approximately $20 million on the bargaining table for the greater good. The Knicks' two superstars signed for the absolute maximum, severely restricting their ability to offer a massive contract to a third superstar.

This hasn't stopped a chorus of Knicks writers from already hinting at an impending Big Three era in the Big Apple. Johnette Howard of ESPN recently wrote that the Knicks had "salary cap room to work with another player."

Immediately following the Anthony trade, ESPN New York's Ian O'Connor wrote, "The Knicks have believed all along that the vision Chris Paul laid out during his infamous toast at Anthony's summertime wedding would indeed come to be, and now they are two-thirds of the way home. The new and not-so-improved salary-cap number could complicate matters to the nth degree, but the Knicks still believe they can find a way to secure Paul…"

Wait… the Knicks' long-term franchise plan stemmed from a wedding toast? Guess James Dolan hasn't seen The Hangover yet.

ESPN's John Hollinger seems to be the rare ESPN writer who can keep a level head about the Knicks' cap situation, as his grades of the Anthony deal mentioned that Melo's contract "likely precludes [the Knicks from] making a run at Paul, (Howard) or Williams."

And unless the league hammers out a new CBA that unexpectedly favors the players and boosts the salary cap, Hollinger couldn't be more right on about the Knicks' cap situation for the free agent class of 2012.

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