Karl-Anthony Towns could become an unrestricted free agent in summer 2027 if he declines his approximately $61 million player option for 2027-28. Exercising that option would keep him under contract for another season, moving free agency to summer 2028 unless he signs an extension.

His stalled extension negotiations with the Knicks do not change his contract for the coming season: Towns remains under contract for approximately $57 million in 2026-27. Stefan Bondy’s reporting describes both the possibility of leaving next summer and the financial protection of keeping the option. The New York Post’s report, republished by AOL

Training camp is not the extension deadline

ESPN’s Shams Charania and Vincent Goodwill reported September 23 that negotiations had slowed and an agreement before camp appeared unlikely. They also reported that the sides could reach a deal during the season. Entering camp without an extension therefore leaves the negotiation open, though the available signing window depends on how the deal treats his player option. ESPN’s report, published by ABC7

SNY’s Ian Begley reported positive conversations and that New York had communicated its desire to keep Towns long term. That is consistent with stalled talks: the parties can want to continue together while remaining apart on the price. SNY’s reporting

For Towns, waiting preserves a choice. He can pursue a longer commitment while retaining the option’s protection if his season goes poorly. For New York, waiting allows more time to evaluate the commitment, but also brings Towns closer to being able to choose another team.

What happens to the $61 million option in an extension?

The option’s treatment determines which seasons a new deal covers. Under the collective bargaining agreement, a player and team can arrange to exercise or decline an existing option while signing an extension. An extension following a declined option must include at least two seasons excluding any new option year. NBA–NBPA agreement, Article VII, Section 7(a)(2)(iii)

Applied to Towns, there are two possible structures:

  • Replace the option: Decline the 2027-28 option as part of an extension, with the new salary beginning that season.
  • Keep the option: Exercise it and add new seasons beginning in 2028-29.

The signing windows differ. Replacing the option with an extension beginning in 2027-28 remains possible during the coming season. Keeping the option and extending from 2028-29 is currently an offseason-only structure: it cannot be negotiated or signed during the 2026-27 regular season. The CBA limits extensions negotiated more than one year before the July 1 preceding their first new season to the offseason; for a 2028-29 start, that cutoff is July 1, 2027. NBA–NBPA agreement, Article VII, Section 7(a)(1)

These are permitted structures, not reported agreements. A four-year extension beginning in 2027-28 would replace the option season, rather than come after it.

Standard veteran extensions can cover five seasons including the years remaining on the original contract. With 2026-27 still to play, replacing the option could allow four new seasons through 2030-31. Keeping both existing seasons would leave room for three new ones within that limit. NBA’s CBA guide, contract-length rules

When would a discount help the Knicks?

A lower salary beginning in 2027-28 would reduce New York’s commitment that year compared with Towns exercising his roughly $61 million option. Keeping the option and adding cheaper years afterward would postpone that benefit until 2028-29. Neither extension structure lowers his existing 2026-27 salary.

New York also has other negotiations approaching. ESPN identifies Josh Hart as currently extension-eligible, with Jalen Brunson and OG Anunoby becoming eligible next offseason. Owner James Dolan has repeatedly expressed his desire to stay below the second apron. ESPN’s reporting

The second apron is a payroll threshold that restricts roster moves, including combining outgoing salaries in trades and using the taxpayer mid-level exception. Paying Towns less could leave more room below that threshold, but would not automatically create salary-cap space to sign an outside replacement. Those are different spending limits. NBA’s CBA guide

Any eventual agreement’s first new season, salary and guaranteed years will determine how much flexibility the Knicks gain—and how much security Towns receives in exchange for surrendering his route to free agency. A headline total alone cannot establish either.