The New York Knicks announced Tuesday night that they will not match the Houston Rockets' three-year, $25 million offer for Lin, a restricted free-agent.
New York officially had until 11:59 EDT to decide whether to re-sign Lin, who became an international phenomenon in the media glare of the Big Apple.
Rockets general manager Daryl Morey celebrated the acquisition on Twitter:
"Welcome to Houston @JLin7. We plan to hang on this time. You will love (hash)RedNation."
Houston had Lin in training camp in December and Morey regretted waiving him. The Rockets liked what they saw in the undrafted point guard, but had to let Lin go because they had Kyle Lowry and Goran Dragic on the roster.
The Rockets made it tough for the Knicks to keep Lin, tough, by backloading their offer sheet with a $15 million salary in the third season. If the Knicks agreed to that deal, they would've faced a hefty luxury tax in 2014-15 because of other big contracts on their books -- between $30-40 million.
The New York Times initially reported the Knicks' decision earlier in day.
One sports consultant said the adjustment to the offer sheet was a stroke of genius by Morey.
"The Rockets deserve a lot of credit for the way they've gone about this," said Marc Ganis, president of Chicago-based SportsCorp. "It was extremely intelligent -- with an assassin's touch."
The Knicks, though, gave Lin his first real shot, picking him up after the Rockets waived him. He was briefly demoted to the developmental league, recalled and finally got his chance when coach Mike D'Antoni put him in with the Knicks floundering at 8-15. Lin scored a career-high 25 points in a 99-92 win over New Jersey Nets and "Linsanity" was born.
Lin had slept on teammate Landry Fields' couch the night before, still refusing to get his own place as he headed into that week, knowing the Knicks would have to decide whether to cut him or guarantee his contract for the rest of the season.
But Lin proved more than just an overnight sensation -- he had 28 and 23 points in his first two NBA starts, and then scored a career-high 38 in a 92-85 victory over Kobe Bryant and the Los Angeles Lakers.
The stock price for Madison Square Garden Inc. surged on the production and popularity of the team's international star. Lin also made the Sports Illustrated cover in consecutive weeks, only the 12th athlete to hold that distinction since 1990. On Tuesday, Lin had more than 829,000 followers on Twitter.
The more opponents saw Lin, though, the more they seemed to figure him out as the season wore on. He went 1 for 11 with eight turnovers in a humbling, nationally televised loss in Miami and the Knicks dropped their first six games in March.
D'Antoni resigned in mid-March and Lin hurt his left knee less than two weeks later. The Knicks revealed on April 1 that Lin needed surgery to repair a meniscus tear and would miss six weeks.
The Knicks made the playoffs behind surging Carmelo Anthony, but bowed out to Miami in the first round. The Rockets, meanwhile, missed the postseason for the third straight year and have spent the offseason completely rebuilding their roster.
Houston has been trying to put together a package of assets and draft picks to offer Orlando in exchange for disgruntled All-Star center Dwight Howard. In the process, the Rockets lost the unrestricted free agent Dragic to Phoenix, then traded Lowry to Toronto in exchange for a future first-round pick with lottery protection.
With no true point guard left on the roster, the Rockets turned back to Lin. The Knicks showed their hand when they brought back Raymond Felton in a sign-and-trade deal with Portland -- after signing Jason Kidd as a free agent.
Houston, meanwhile, jumped at the chance to reacquire their popularity in China, where Yao Ming became a larger-than-life figure. Many Rockets landed lucrative shoe contracts with Chinese companies on Yao's coattails and Rockets' games drew massive television ratings there.