Point guard Chris Smith has become the D-League’s first $2 million player.
That’s the amount Smith, J.R. Smith’s brother, is costing the Knicks as their 15th man due to the punitive luxury-tax system under the new collective bargaining agreement.
No wonder Knicks owner James Dolan is in a grumpy mood.
The Knicks’ horrid luxury-tax situation — as reported in Saturday’s Post — was the chief reason the Knicks owner put the kibosh on signing a temporary big man in the wake of Tyson Chandler’s leg injury. They would have had to cut Smith to make room.
The Knicks have earmarked Smith for the D-League once that season starts Nov. 22.
Coach Mike Woodson has admitted J.R. Smith’s presence was a factor in keeping him on the roster over another big man such as Ike Diogu.
Though the Knicks haven’t yet reached the tax status as “repeat’’ offenders, they are so far over the luxury-tax threshold, the last few spots on their roster are costing them a fortune. Each additional contract dollar is taxed by a ratio of 3.25. The Knicks’ payroll stands at more than $87 million and the tax threshold is $71.7 million.
Hence, the Knicks are paying Smith his minimum contract of $491,000 and have to pay the league’s escrow account an additional $1.6 million in luxury tax, equaling about $2.1 million. Because of a favorable quirk in his contract, the whole sum became fully guaranteed on opening night.
Dolan’s reluctance to add another big man and release Smith also stems from the fact he’s already paying 17 players this season — the 15 men on the roster, Jeremy Tyler’s $100,000 guarantee and rookie C.J. Leslie’s $200,000 guarantee.
Tyler and Leslie were cut at the end of the training camp and their guaranteed money is also subject to the 3.25 tax.
The Knicks still plan to re-sign the rehabbing Tyler in December and will waive either Smith or Tour’e Murry if the 6-foot-10 Las Vegas summer-league sensation looks good in D-League games with their Erie affiliate. They would save more money by waiving Murry, because his pact doesn’t become guaranteed until January.
Tyler is returning from stress-fracture surgery and rehabbing at the Knicks’ Westchester practice facility. Tyler is a second-year player so his minimum contract will start at $788,000. His actual cost will be about $3.3 million with the luxury tax, but could prove worth the investments if brittle Amar’e Stoudemire and Kenyon Martin don’t remain healthy.
One reason general manager Steve Mills was brought in to replace Glen Grunwald was to guide the Knicks out of this luxury-tax nightmare. Next year, the Knicks will be “repeat offenders’’ and a certain portion of their payroll will be taxed at a 4.25 ratio. There’s no relief until 2015 when they plan to be under the salary cap.