The Knicks won a championship with Karl-Anthony Towns, but cap rules have complicated extension talks. Now, one new development has pushed the team even closer to considering a trade.

While the Knicks initially viewed trading Towns as a last resort, it has now become a genuine option as extension talks continue to stall.

Sean Deveney reported that “The Knicks have put that option on the table for him, and he will have suitors if nothing changes between now and June 30.”

The Knicks’ willingness to put Towns on the trade market signals that they are seriously considering moving on from the big man.

Towns has two years and $118 million remaining on his contract, including a player option for 2027-28. The Knicks have until June 30, 2027, to work out an extension or risk losing him in free agency. That date marks the end of the NBA league year and the final day of Towns’ guaranteed contract.

If Towns eventually leaves in free agency, the Knicks could lose him without receiving anything in return. A trade before then would be their only way to recoup assets if an extension cannot be reached.

As the deadline approaches, the two sides remain far apart in their extension negotiations. Shams Charania reported that the Knicks offered Towns a four-year, $200 million deal, which he turned down.

Considering that he is eligible for a maximum contract worth up to four years and $276 million, his decision is hardly surprising.

While Towns has stated that he isn’t necessarily expecting a max contract and is open to taking less money, the $200 million offer seemingly left him unimpressed. In early October, he indicated that the two sides were nowhere close to reaching an agreement.

“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.”

Towns was crucial to the Knicks’ 2026 title run, but NBA salary-cap rules have made it difficult for the franchise to pay him what he believes he is worth.

Team owner James Dolan has vehemently denied that the Knicks will cross the second apron. Less than a week after winning the championship, he made his stance clear.

“There’s certain things in the NBA that you’d have to be suicidal to do. One of them is the second apron. Cannot go into the second apron.”

The restrictions are significant, preventing teams above the second apron from offering mid-level exceptions, aggregating contracts in trades, or using trade exceptions. It also freezes draft picks seven years in the future and prevents teams from including cash considerations in trades.

The Knicks’ willingness to consider trading Towns reflects their reluctance to cross that financial threshold, a constraint that has already forced similar decisions across the league.

The Celtics, for instance, had to break up parts of their 2024 championship core amid growing financial concerns. Boston’s reluctance to commit such a significant portion of its salary cap to Jayson Tatum and Jaylen Brown, up to 70%, was one of the factors behind Brown eventually being traded.

Now, the Knicks find themselves at a similar crossroads. Like the Celtics, they must weigh the cost of keeping their stars together against the financial restrictions that come with crossing the second apron.

However, the best outcome for all parties would be for the two sides to find common ground and agree on a new deal.

Trading Towns carries considerable risks for New York. He averaged 20.1 points and 11.8 rebounds during the 2025-26 regular season and played an important role in the Knicks’ championship run.

Losing him would weaken the team’s floor spacing, interior presence, and secondary playmaking — all key parts of the formula that helped New York win the 2026 title.

For now, the Knicks still have time to revisit negotiations, and there is no indication that Towns has formally requested a trade. However, if the two sides cannot find common ground, the possibility of a move could become increasingly difficult to ignore.

New York now faces a delicate decision: reward one of the players who helped bring a championship back to the city or risk entering the 2027 offseason with his future still unresolved.