Since trading for Carmelo Anthony in 2011, the New York Knicks have had a tough time recruiting stars to Madison Square Garden.[1] Their moves in recent years show a willingness to keep large contracts off the books to position the team for stars that hit the free agent market. However, no stars have joined the Knicks by way of free agency.[2] Instead, the Knicks followed up a fourth-place finish in the 2020-21 season with a lackluster offseason and shocking regression across the entire roster, resulting in a 37-45 record and an eleventh-place finish in the Eastern Conference.
Attempting to rebound from the nightmare that was the 2021-22 season, the Knicks secured who they hope to be the next piece of a championship roster in former Villanova star, Jalen Brunson.[3] After many creative draft-night trades that created the necessary cap space for the team to bring in both Brunson[4] and big man Isaiah Hartenstein, the Knicks offered Brunson a $104 million deal to completely pry him away from the Dallas Mavericks.[5] Yet, with a “Big Three” of Brunson, Julius Randle, and RJ Barrett, there still does not seem to be enough “pop” in the lineup to truly contend in the East.
After a blockbuster trade in July[6] that sent Rudy Gobert from the Utah Jazz to the Minnesota Timberwolves, it seemed incredibly likely the Jazz would consider moving their other star, Donovan Mitchell, as well. Currently, the Jazz front office is headed by the infamous, trade-happy Danny Ainge, and the Gobert trade made it obvious that the team was entering a full rebuild and asset acquisition period with Mitchell entering just the second year of his $163 million max contract.[7] With the Knicks slated as the original favorite to land Mitchell, the market quickly changed after they resigned RJ Barrett to a $120 million rookie scale extension.[8] This ultimately eliminated them from the opportunity to sign Mitchell and paved the way for the Cleveland Cavaliers to acquire Mitchell, solidifying one of the most exciting young cores in basketball.[9]
The Jazz and the Knicks seemed to be the perfect trade partners – one a hemorrhaging small market franchise that could not capitalize on multiple high-seed finishes in the Western Conference, the other a starving large market team desperate for a big-name player to propel them to year-over-year success. However, the Rudy Gobert trade had been an albatross in the basketball world, with the Jazz’s large return of draft capital all but making the potential acquisition of Kevin Durant impossible to achieve.[10] Recent reports highlighted the Jazz and the Knicks engaging in negotiations centered around Donovan Mitchell and RJ Barrett, but with Barrett entering the final year of his rookie scale contract, the Knicks had to include other valuable players to match Mitchell’s incoming salary. This made coming to an agreement challenging for both sides.[11] After Barrett signed his extension on August 29th, the “poison pill” provision of the extension practically closed the book on the Knicks hopes of acquiring Mitchell.[12]
Article VII, Section 8(g) of the NBA’s Collective Bargaining Agreement ("CBA") explicitly provides the rules for this complicated caveat, otherwise known as the “poison pill”.[13] The section states that when trading an extended first round rookie scale contract, the Jazz must treat Barrett’s salary as the average of two factors: 1) the salary of the last year of the rookie scale contract and 2) the salaries from the extended years of the contract.[14] The Knicks, on the other hand, could treat Barrett’s outgoing salary as the $10.9 million he is due for the upcoming season. The $16 million difference in incoming/outgoing salary created a legal transaction nearly impossible for both sides to complete without including a third team able to take on other salaries - here, likely Evan Fournier’s $18 million for this upcoming season.[15]
| Before Barrett Extension [16] | After Barrett Extension |
Total Contract | 1 YR // $10.9M | 5 YR // $130.9M |
Jazz Incoming Salary | $10.9M | $26.18M |
Historically, 179 rookie scale extensions have been subject to the poison pill provision, but only one player has been able to be traded since its inclusion in the CBA.[17] This anomaly occurred in 2008 when Devin Harris’ newly extended rookie contract was part of an eight-player trade sending Jason Kidd to the Dallas Mavericks.[18] With a small salary cap of $55.63 million in 2008, the deal was more feasible to officiate as salary figures were smaller in range and easier to aggregate.[19] The last year of Harris’ rookie deal was worth $3.995 million and the aggregated value the Nets had to account for was $9.399 million, making the $5.4 million difference in salary easier to navigate than the $16 million for RJ Barrett.[20] The disparity in these situations is due to a rapidly growing salary cap and extension values that far exceed what the league and players association could have ever dreamed of when first implementing the poison pill provision.
RJ Barrett’s extension was a key contributor to Cleveland’s acquisition of Donovan Mitchell, and it will be interesting to see if the poison pill is addressed in the looming CBA negotiations next year.[21] Player mobility is at an all-time high, yet the poison pill provision makes trading young talent for veteran All-Stars nearly impossible, complicating many trade negotiations and the satisfaction of star players’ trade requests. Both the players association and the league should consider whether the poison pill is still a necessary provision, as it handcuffs teams from being able to move some of their best assets in years where their value may be at its highest.
Those in favor of the poison pill argue that its main purpose is to protect players from being moved within a year of making a long-term contractual commitment to the team that drafted them. The results speak for themselves as the provision has caused a 99% success rate in keeping extended players with their teams. But is the provision too archaic?
What would have been the real difference between the Knicks extending Barrett and then trading him to the Jazz? Or the Knicks trading Barrett and then the Jazz immediately extending him? In both scenarios, the teams would partake in a transaction willfully, and would be getting pieces they think are essential to the development of their franchise. The Knicks would bring a superstar to one of the league’s biggest markets, and the Jazz would replace their superstar with a former top-3 draft choice who averages an impressive 20 points per game.
Instead, Donovan Mitchell has gone to Cleveland catapulting the Cavaliers’ ceiling for this upcoming season well beyond that of the Knicks. Would that have been the case if the Knicks could have remained engaged in negotiations after extending Barrett? By willingly swallowing the poison pill, the Knicks may have ruined their chances of escaping NBA purgatory, and are now fully relying on the continued growth of RJ Barrett to propel them into and beyond the first round of the NBA playoffs.
References:
[2]https://www.sportingnews.com/ca/nba/news/new-york-knicks-offseason-summer-transactions-free-agency-misses-lebron-james-carmelo-anthony-amare-stoudemire/rxwkf078ib4n1ue82gllp1t7h
[4] Id.
[8] https://www.espn.com/nba/story/_/id/34502825/sources-cleveland-cavaliers-trade-3-first-round-picks-two-swaps-utah-jazz-star-donovan-mitchell
[9] Id.
[10]https://bleacherreport.com/articles/10046507-nba-execs-kevin-durant-trade-talks-complicated-by-high-price-rudy-gobert-commanded
[11]https://www.espn.com/nba/story/_/id/34485302/rj-barrett-extension-new-york-knicks-worth-120-million-agent-says
[12] Id.
[14] Wojnarowski, supra.
[15] Id.
[17] Wojnarowski, supra.