Projecting Karl-Anthony Towns’s Next Knicks Contract As Extension Negotiations Stall

The Knicks’ title defense kicks off Oct. 20 when LeBron James, Jaylen Brown and the 76ers come to Madison Square Garden for ring night. One last celebration before it’s back to business. Not all of New York’s offseason business was taken care of, though, as it looks like Karl-Anthony Towns will head into the new season without a contract extension.

Towns is extension eligible, but according to a report from The Athletic on Monday, the two parties remain “far apart” on a new deal. The big man is eligible for a four-year extension worth up to $276 million—a whopping $69 million annually. According to The Athletic, the Knicks’ offer has remained in the $45 million to $50 million per year range so far.

“It don’t look good,” Towns said Monday. “... Simply put, I want to do something that can keep the team together and work with the Knicks and also values me. None of those things have come close to happening.”

It’s a tricky situation as Towns is well worth a long-term commitment, but Knicks owner James Dolan has made it clear he doesn’t want to go into the second apron. Avoiding the second apron and keeping the championship roster together will be a challenge, with Towns’s contract number perhaps the most difficult.

Jalen Brunson becomes extension eligible next summer. After everything he’s proven, he shouldn’t need to take another discount. He’s been there, done that. Plus, there’s no question who’s the guy. It’s Brunson, the new king of New York.

That doesn’t mean that the Knicks shouldn’t give Towns his payday. In fact, the opposite. He’s the best shooting big man of all time and showcased incredible adaptability over the title run. He’s critical to New York’s success, but you can’t just give players the max and call it a day in this era of salary cap aprons and subsequent punishments. Especially not your second option.

Along with Dolan’s apparent mandate to avoid the second apron at all costs, reaching a number that makes both the player and team happy can be incredibly difficult. So, what could that look like for Towns? Let’s dive in:

A look at the Knicks’ Karl-Anthony Towns conundrum

There are a number of paths forward here. The Knicks could give Towns his max (four years, $276 million), try to get him to take a discount or (the final, nuclear option) trade him if keeping him around gets unfeasible. There’s time to work this out as Towns remains extension eligible through June 30. As things stand, it appears he will enter the season without an extension and the two sides will try to get something done once the season wraps up. That could go multiple ways, though. If the Knicks repeat and Towns shines again, he could say he wants every dollar he’s eligible for. Or, he takes somewhat of a step back and a discount seems more reasonable.

Let’s say all the circumstances remain the same, though. Towns can make up to $69 million annually, while the Knicks’ offer is about $20 million per season less than that (in the $45 million to $50 million range). It’s easy to say let’s just meet somewhere in the middle, but it (obviously!) is never that easy.

Towns will make $57.1 million this season and he has a $61 million player option in 2027-28, the final year of his current contract. Per CBAGuide.com, the player option can be exercised or declined when effectuating an extension. So, Towns’s $61 million player option can be picked up or declined if they come to an extension, but seeing as his annual salary in the next deal will very likely be less than that annual amount, he’d likely want to exercise the option.

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The issue that brings for New York is the length of the deal, though. If the Knicks gave him a handsome deal and he declined the player option, the extension could start in 2027-28 as opposed to the next year, which would keep the future cap sheet cleaner. Seeing as Towns will be 33 in the 2028-29 season, it makes sense for the Knicks to up their offer in favor of flexibility way down the road.

If you look all the way out two years from now, Brunson, Mikal Bridges and OG Anunoby represent the only guaranteed money on the Knicks’ cap sheet. Brunson needs to get paid and Anunoby’s time is coming, too, plus Josh Hart is already in line for a new deal. And that’s all before you have to fill out the rest of the roster. Still, though, if the Knicks give Towns his max, the franchise would move an estimated $30 million away from the second apron in 2028-29. Before Brunson gets paid, without a new deal for Hart and before you get to the bench. That’s, uh, not realistic.

Projecting Karl-Anthony Towns’s contract extension with the Knicks, when the two sides can get there...

So what should this thing actually look like? To nail that down, let’s look around the league.

Currently, Towns is the fourth highest-paid big man behind only Nikola Jokić, Anthony Davis and Joel Embiid. Victor Wembanyama took a discount on his contract extension this summer, which will pay him an average annual value of $51 million once it kicks in. Wemby’s extension was for five years, longer than Towns’s would be.

Elsewhere, Jalen Duren signed a five-year, $200 million new contract with the Pistons while Walker Kessler joined the Lakers via sign-and-trade on a four-year, $129.5 million deal. That makes Duren a $40 million player and Kessler just above $30 million. Towns, although much older, is in a different stratosphere than those players, like he’s currently paid.

Around or at Wemby’s extension, even though he took a discount, is about right for Towns. That’s the high end of the Knicks’ current offer, but there’s the championship tax at play here. There’s slim margins to go up from $50 million per season, but there’s a slight amount of wiggle room. If Towns gets bumped up $2.5 million annually (and $10 million total), he’d take up somewhere right between 25-30% of the Knicks’ estimated salary cap in 2028-29. Brunson is projected to be eligible for a supermax and, subsequently, 35% of the cap. He may not take that much, but he’ll certainly leap Towns and Anunoby as New York’s highest-paid player by then.

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If Brunson is eligible and doesn’t take the supermax but still hovers around 30% of the Knicks’ cap, the quartet of him, Towns, Anunoby and Bridges would take the Knicks right around or just above the full salary cap amount. Specifically, there’d be an estimated $35-plus million to play with if Towns gets said contract and Brunson gets a $15 million pay bump annually. Brunson may get more, which would only make things tighter when you still have to pay Hart on a lesser deal and fill out the roster.

A lot can change in two years; the Knicks could look a lot different. Heck, every NBA team does in that amount of time. As of now, though, New York needs to figure out how to keep its increasingly expensive championship roster together. Wemby’s extension and $51 million annual value may be what the Knicks don’t want to exceed for Towns. That’s not a fair comparison for anyone, though. And that number is just above the high end of the team’s current offer, which has yet to move the needle.

If the Knicks have to go a decent amount over $50 million per season, the roster could become too difficult to keep intact. There should be a middle ground both sides could meet, though, which could make both sides happy. Still, that’s asking for a lot. Brunson would have to take his version of a team-friendly deal and Towns would have to compromise with the number he truly wants. Same goes for Anunoby and Hart. With how well the roster clicks, though, all could fall into place.

Towns contract extension prediction: Four years, $210 million ($52.5 million per season)

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