Knicks owner James Dolan abruptly ends contract talks with champion players ahead of title defense

New York Knicks owner James Dolan’s desire to avoid steep NBA luxury taxes on player payroll has led the billionaire to halt contract talks with the defending champions.

Knicks stars Karl-Anthony Towns and Josh Hart will now be forced to wait to negotiate the new deals they were hoping to secure before New York embarked on its title defense this season.

‘As an organization, our entire focus is on preparing for the upcoming season and delivering another year for our fans to be proud of,’ read a team statement. ‘As a result, we will not be negotiating contract extensions until later in the season and will remain solely focused on preparing for the start of the season.’

The Knicks will begin their title defense against the visiting Philadelphia 76ers at Madison Square Garden on October 20.

Dolan voiced his concerns over team salary following the team’s NBA Finals win over the San Antonio Spurs, saying he hoped to avoid paying the stiff luxury tax penalties that could result from adding more salary to the books.

Not only has Dolan tabled talks with Towns, Hart and backup guard Deuce McBride, but he allowed center Mitchell Robinson to sign with the rival Boston Celtics for three years and $47.4 million.

Towns is currently signed through this season, when he’ll make $57 million, and has a $61 million player option for 2027-28, when he can elect to become a free agent. Hart, meanwhile, will make $21 million this season ahead of the 2027-28 campaign, when the Knicks hold a $22.4 million option on the veteran swingman.

‘You have situations like that and you never know what’s going to happen,’ Hart said at the opening of training camp. ‘But for me, as long as I wear this jersey, I’m going to play as hard as I can for my guys and the city, so hopefully we can figure that out. But we know it’s a business, and we know if some of these things aren’t figured out by February, it might be a different conversation.’

Dolan explained his reservations to WFAN back in June after the Knicks won their first NBA title since 1973.

‘We cannot go into the second apron,’ Dolan said, indicating his desire to see the team keep its payroll below $222 million for the upcoming season.

In addition to the NBA’s soft salary cap, which is set at $165 million for this season and permits a number of exceptions, the league also has a highly punitive luxury tax structure that comes with additional tiers or aprons. So, when teams exceed the soft salary cap and move beyond the $201 million luxury tax threshold, they can also face added penalties for spending above $209 million (first apron) or $222 million (second apron).

Only a handful of NBA teams have ever gone into the second apron, which limits both free-agent opportunities and trades. There is also a dreaded ‘repeater’ tax penalizing teams for remaining above the luxury tax threshold for consecutive seasons.

‘I don’t know if we’ll be able to,’ Dolan told WFAN when asked if he’d be able to keep the team together. ‘We’re willing to stretch, but there’s certain things in the NBA that you’d have to be suicidal to do. One of them is the second apron.’

Brunson’s decision to sign for $113 million less than a full max contract extension in 2024 helped the Knicks end their 53-year title drought.

Now, if the Knicks are to remain atop the NBA hierarchy, they may need Towns and some other key stars to accept similar team-friendly deals, according to ESPN’s Brian Windhorst.

‘If Karl Towns is willing to take a little bit of a haircut, you know, $7-10 million over the course of multiple seasons and Josh Hart is also extension eligible this summer, if both of them are willing to take a little bit of a haircut, you could see this core staying together for three, four, five years,’ Windhorst said in June.