The deal would pay Lin $5 million annually for the first two years of the deal and then jump up to approximately $10 million for years three and four. The Rockets also cleared room for Lin by trading point guard Kyle Lowry to the Toronto Raptors for an undisclosed package, according to Yahoo Sports.
Rockets general manager Daryl Morey clearly values Lin and regrets cutting him in December, but offered a contract that is also meant to knock the New York Knicks out of the running for the talented point guard.
The Knicks have repeatedly said that they will match any offer for Lin, but the backloaded deal - known as a poison pill - will make it very expensive to keep him. The main reason is that the final two years would push the Knicks into paying luxury tax payments, potentially as much as $35 million, according to Forbes' Allen St. John.
After losing Steve Nash to the Los Angeles Lakers, Lin is somewhat of a necessity for the Knicks, but it might be a tough financial pill for Knicks owner James Dolan to swallow. Linsanity generated a ton of money for the organization last year, but there are some concerns that he'll be unable to shoulder the weight of the brutal 82 game regular-season schedule.
Lin hasn't signed the Rockets' offer so there is a possibility that the Knicks could offer him a more reasonable contract that avoids the backloaded finances. It is also possible that teams such as the Dallas Mavericks, who missed out on Deron Williams and Steve Nash, would be interested in bringing in Lin for a visit. The Raptors were another team that were mentioned with Lin, but likely knocked themselves out of contention with the deal for Lowry.