Chapter 197: Who Did They Trade For?
The news about where LeBron was headed remained unresolved, but the Rockets had already made a splashy, if not monumental, move.
They pried Jeremy Lin away from the Knicks with a three-year, $25 million offer sheet.
This contract, while not particularly huge, was unmatchable for the Knicks due to the 'Arenas Rule.'
The Arenas Rule stemmed from a loophole the Wizards exploited to sign Gilbert Arenas—a second-round pick who thrived with the Warriors—offering him a deal Golden State couldn't match.
The NBA introduced the rule to prevent this from happening again, limiting the first-year salary of contracts for second-round picks to the mid-level exception.
However, the rule only applied to two years of the contract, allowing teams to offer a massive salary hike in the third year, creating a financial poison pill for teams attempting to match.
For teams without much cap space, matching such an offer would mean risking hefty luxury tax penalties in the third year. This type of deal became popularly known as a 'poison pill contract."'
This exact situation had occurred with DeAndre Jordan and the Clippers the previous season.
Smart teams had since avoided signing rookies to short one- or two-year deals, as evidenced by the Warriors locking up Draymond Green on a three-year deal.
But Jeremy Lin's breakout performance had been an unexpected phenomenon, forcing the Knicks to reluctantly let him go.
Soon after Lin joined the Rockets, the Knicks made a splash of their own, announcing a trade with the Suns.