Not since Yao Ming suited up in a Houston Rockets jersey has Asia been this excited about NBA basketball. The reason: Jeremy Lin. The Harvard-educated son of Taiwanese parents, who has a Chinese grandmother, took the league by storm last season as he burst onto the scene like a shooting star.
He's now taking part in a wildly successful Tour of Asia. He's been to Taiwan and China, where crowds cheer and little kids show up wearing their bright red Rockets jerseys with "Lin" on the back. From a cultural perspective, it's heartwarming. From a capitalistic perspective, the marketing potential is endless. And to think, the NY Knicks didn't want any part of this.
Fittingly, Lin was playing in New York, where street basketball was invented. The city is also renowned as the media capital of the world and home to a large and thriving Asian community.
In the shadow of the Statue of Liberty is Ellis Island, America’s symbolic welcome mat. He was the right man in the right place, and at 23 years of age, it seemed he would become a fixture at Madison Square Garden along the likes of Spike Lee. The New York Times called him the Knicks’ “most popular player in a decade.” That's an understatement when you consider the Knicks haven't been relevant since the O.J. car chase in 1995.
But then the unthinkable happened. The Knicks let their prize jewel vanish.
At the end of the 2012 season, Lin became a restricted free agent, meaning that the Knicks could match any offer that another team gave him, ensuring that they would keep their exciting young point guard in New York. The Rockets, who launched Yao into to stratospheric heights and tapped into the market of China, saw a similar opportunity with Lin, and offered him $28.8 million over four years, the final year being at the club’s option, making the actual commitment less than $20 million.
Knicks’ coach Mike Woodson told The Times the team would match the offer, prompting the Rockets to revise their deal to three years and $25 million, which the Knicks chose not to match.
Did they do the right thing?
The first two years of the contract are worth about $5 million each, but the third year is worth nearly $15 million. And that was (allegedly) the poison pill. Houston understood that that number would force the Knicks to pay the new luxury tax penalty, thus skyrocketing the 2014-15 price of Jeremy Lin to $43 million, according to ESPN.
OK, it’s a steep price but it didn’t necessarily have to be. New York’s first mistake, by my calculation, is that they went about negotiations too late. They could have worked out a contract extension with Lin before the season was over – before he could negotiate with other teams.
Even afterward, when Houston offered Lin $25 million over three years, the Knicks could have offered him the same amount but dispersed the payments more evenly to avoid the balloon sum on the back end.
But let’s assume there was no way around it, even with the financial hit the team would take, Jeremy Lin was worth it.
Maybe not in terms of wins and losses – he’s still a relatively unproven commodity and has holes in his game – but as a business decision.
Over the next decade, which is likely the length of Lin’s career, between ever-expanding globalization and the growing economy of China, a wave of new consumers will be hungry for an NBA product that is already attempting to spread around the globe. Yao unlocked the Far East for the league, just as Ichiro Suzuki did for baseball. They are the face of their respective sports to more than a billion people. They are brands. They are at least as merchandisable as the leagues they represent. And now is the time for the next great Asian star to rise. And he has.
And New York let him get away.
New York, financial town that it is, was looking out for the bottom line -- or holding out for Chris Paul in 2013. The problem is, their accounting was very short-sighted. Here’s the real bottom line: The Knicks should not have let Jeremy Lin get away – not for all the tea in China.