Smith had a player option for 2013-14 and, as expected, declined it after having a stellar season. Playing a major role in the team's success in both the regular and postseason, he averaged 18.1 points and 5.3 rebounds per game and gave New York a go-to scoring threat off the bench when Carmelo Anthony was off the floor.
The Knicks fully expected Smith to test the waters after outplaying his current $2.9 million contract, but retaining him in the Big Apple is their top priority. They can sign him using the Early Bird exception at approximately $5 million per season for four years with standard raises.
There are key factors that give New York an advantage in re-signing Smith, in addition to the compensation. For one, he is a native of New Jersey, and playing in New York City affords him the opportunity to be close to his family. He also developed a strong rapport with head coach Mike Woodson, under whom he took a major step forward as a player.
The biggest dangling carrot for another team would be pitching to the 27-year-old a chance to start, which would undoubtedly prove intriguing to him.