The New York Knicks are fresh off winning their first NBA championship in 53 years, but maintaining that championship core is already proving to be a massive financial puzzle. At the center of the storm is star big man Karl-Anthony Towns, who remains eligible for a massive four-year extension worth up to $276 million as contract talks between both sides hit a standstill. While navigating the severe penalties of the NBA’s second apron is a primary hurdle, a far more ominous threat looms over Madison Square Garden: the potential return of owner James Dolan to basketball operations.
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Stephen A. Smith believes that while the financial constraints under the new collective bargaining agreement are valid, the real danger is Dolan using championship success as justification to end his hands-off approach. Smith made it clear that he does not believe Dolan is actively meddling in the Towns negotiations right now, but he fears the owner will revert to past habits that previously crippled the franchise.
Slagging the owner’s historical track record, Smith pulled no punches: “James Dolan, for the most part, has been awful as an owner. That is no longer the case since Leon Rose has arrived because he has stood out of the way and he has let the Knicks do their thing.”
Towns can receive a four-year extension worth up to $276 million. That is a lot of money, especially because the Knicks have other players they may need to pay. Josh Hart is also eligible for an extension, while Jalen Brunson and OG Anunoby will demand major long-term commitments down the line.
Smith understands the Knicks’ hesitation. Towns’ $276M extension directly competes with the future deals needed to keep Hart, Brunson, and Anunoby together under the second apron.
“I will tell you why. On one hand, you’re looking at Karl Anthony Towns and you’re saying two hundred and seventy-six million dollars is a lot of money, Smith said. “Both Josh Hart and, you know, I’m sorry, Josh Hart is due for an extension next year.”
Smith then talked about Brunson and Anunoby, noting both players are vital to New York’s future.
Dolan said in June that the Knicks do not want to enter the second apron. New York is below it this season, according to Vincent Goodwill’s June 18, 2026 report on ESPN. However, Shams Charania reported that keeping the same group next season would push the Knicks above that costly threshold.
Dolan played a bigger role in basketball decisions during the earlier years of his ownership, a period defined by frequent executive turnover, questionable high-priced trades, and decades of lottery finishes. Things started to change in 2020 when, after the 2019-20 season, Dolan hired former CAA agent Leon Rose as team president and granted him full basketball control. Dolan’s attention was further occupied by the Sphere project in Las Vegas (opened in 2023), which kept him away from daily team affairs.
Smith is not saying that Dolan is personally stopping the Knicks from giving Karl-Anthony Towns an extension right now. Instead, he fears that winning the title could make Dolan want to become more involved again.
“We finally got the chip. So I can go back to my old ways of being a nuisance and getting in the way of basketball operations because I put business ahead of basketball,” Smith continued. “And I’m very, very concerned about that because the New York Knicks, having won the championship, certainly buys players a cachet.”
The Knicks still have to solve Towns’ contract situation. Charania reported on ESPN’s NBA Today that talks between Towns and the Knicks have stagnated. The two sides had many positive talks during the offseason, but recent progress has stalled, making an agreement before training camp unlikely.
Towns is entering the final guaranteed year of his current contract, earning about $57 million this season with a player option worth around $61 million for 2027-28. This financial structure is precisely why the Knicks can take their time in negotiations, Towns won’t hit unrestricted free agency until next summer if he declines his option, allowing talks to continue into the season.
Stefan Bondy of the New York Post reported that the Knicks want Towns to accept less than the maximum extension to help manage the second apron and preserve space for Brunson’s future. Bondy’s report suggests the main disagreement is about how much of a discount Towns is willing to take.
This creates a sensitive dynamic given Towns’ impact on New York’s championship run. During the 2025-26 regular season, he averaged 20.1 points and 11.9 rebounds. In the playoffs, Towns averaged 15.9 points, 10.6 rebounds, and 4.9 assists while shooting 55.1% from the field and 45.6% from three.
Because of that performance, Smith does not want the contract situation to end with Towns leaving New York.
“Karl Anthony Towns is incredibly important. You don’t want to lose him,” Smith suggested. “And most importantly, you don’t want to see somebody gone from a championship squad, the likes of Karl Anthony Towns. He helped deliver a chip to New York City for the first time in 53 years.”
The Knicks face two competing pressures: keeping Towns on a manageable deal and avoiding second-apron roster penalties. But for Smith, the overarching question remains: Will Dolan continue to let Rose manage basketball operations, or will winning a title tempt him to start meddling again?
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