As little as a week ago, reports surfaced that the New York Knicks were so smitten with their restricted free agent Jeremy Lin and all that he meant to the franchise and its fan base that they would match even a contract of a billion dollars.

Those reports might have been just a bit off.

After Lin signed a four-year, $25.1 million offer sheet with the Houston Rockets, the Knicks balked, thereby allowing Lin to officially become a member of the Rockets Tuesday evening, proving that even the NBA’s second-most valuable franchise had its financial limits.

Houston revisited Lin’s original 4-year, $28-million offer over the weekend so that it was a three-year deal with a $14.9 million hit to the Knicks salary cap number in 2014-2015. With the NBA’s complicated luxury tax rules, the Knicks would also have to pay an estimated $30-$40 million in luxury taxes, for a total of roughly $45 million in the final year of Lin’s contract—too high a price for the normally free-spending Knicks owner James Dolan.

Rockets general manager, Daryl Morey designed the terms so that the Rockets would still have to pay Lin the $14.9 million, but the salary cap number would be $8.3 million for Houston in each year of the contract.

Lin’s unlikely rise to stardom in the Big Apple became the feel good story of the year, culminating in an ESPY for the 23-year-old last week. He arrived in New York having been cut by three other teams (including the Rockets), making the league minimum, buried on the bench behind Baron Davis and Mike Bibby and sleeping on his brother’s couch in Manhattan.

When Davis and All-Star forward Carmelo Anthony went down in February, then-Knicks coach Mike D’Antoni handed the reins of the Knicks’ punchless offense to Lin in a game against the Nets. Twenty-five points and a win later, Linsanity was born.

Seven straight wins on a dominant string of performances against the likes of Kobe Bryant and the L.A. Lakers and then against the defending champion Dallas Mavericks had Lin’s face plastered all over Broadway and his highlights playing non-stop on SportsCenter.

As a Taiwanese-American who grew up in the Bay Area and attended Harvard, Lin’s unique identity gave him broad appeal among Asian-Americans who had never seen one of their own take the basketball world by storm. He instantly became the most marketable player the Knicks have had since…well, ever, given his international appeal in Taiwan and Mainland China.    

During the month of February, the Knicks went from a lottery team to a playoff team, thanks in no small part to Lin. Even more impressively, team chemistry picked up with Lin as the field general. Players like Amar'e Stoudemire and Tyson Chandler were having fun on the court, a rare sight at Madison Square Garden in recent years.  

Unfortunately, the magic from February did not carry into March. As Anthony returned, the offense sputtered while running through him and a rift between ‘Melo and D’Antoni resulted in the latter being relieved of his duties.

Lin went down with a knee injury on March 25 and missed the rest of the season. While his teammates were being dispatched in the first round of the playoffs by the Miami Heat, Lin could only only watch from the sideline.

Fast forward to July. The Knicks were in the driver’s seat of retaining Lin’s services since they could match any team’s offer sheet to Lin. Some might argue the Knicks should have been more proactive in signing Lin to an offer, (including by some accounts, Lin himself) but they were restricted by how much they could offer.

In the end, Dolan and the Knicks opted to bring in Jason Kidd and Raymond Felton as Lin’s replacements. Knicks fans are understandably upset about losing such a promising young player, but the flipside is that it’s not their $45 million to spend.

There are still many doubts for Lin’s continued success given his relative inexperience. He has made all of 25 starts meaning that Lin’s current deal netted him a cool million for every start he’s made.

Even so, in looking at his averages of 14.6 points and 6.4 assists last season, the Rockets are betting a lot on potential here. Morey thought enough of Lin to bring him to camp last fall, but the Rockets already had three point guards with guaranteed contracts and Lin ended up being cut right before the regular season.

But now that Kyle Lowry has been traded to Toronto and Goran Dragic signed with Phoenix, Lin will be in the surreal position of being the starting point guard for a team that had no space for him just a year ago.

The Rockets are expected to sign Chicago Bulls restricted free agent center Omer Asik to a very similar three-year, $25.1-million offer sheet on Friday and the Bulls with have three days to match.

Regardless of what the Bulls do, Morey has acquired via trade, several young players and a valuable draft pick from Toronto that he hopes can be turned into a superstar that the team has lacked since Yao Ming retired.

It’s no secret that Dwight Howard remains Houston’s No. 1 target. But the Lakers are also in pursuit of the disgruntled Orlando Magic big man. The Lakers are looking for Howard to sign an extension before any deal is made. The Rockets have made it clear they are willing to a do a trade without any such guarantee.

Would teaming up with Lin be enough for Howard to consider re-signing with Houston next summer? Probably not, but Morey has already shown he’s willing to do anything to get his man. At this point, it's not smart to bet against him.

 

Reach Writer Salomon here; follow him on Twitter here.