Walsh to Leave Knicks, Turnaround Unfinished

The stunning decision, which caught even Walsh’s friends by surprise, was revealed Friday morning in a statement by , the Madison Square Garden chairman, and later addressed by Walsh in a conference call. Walsh will finish his contract, which expires June 30, then move into a consulting role next season.

Dolan and Walsh described the parting as mutual, with Walsh citing his age (70) and his reluctance to make a long-term commitment on a new contract. That explanation was forcefully rejected by a several of Walsh’s friends and by numerous others with close ties to the Knicks.

Walsh, they said, wanted to stay, but only with ironclad assurances that he could work without interference from Dolan and his advisers, including Isiah Thomas, a former team president. When Dolan balked, Walsh decided it was time to go, said the friends and associates, who asked for anonymity while discussing private conversations.

Walsh had been negotiating a new contract for several weeks, after Dolan declined to pick up his option for the 2011-12 season. Autonomy was the chief point of contention, but not the only one.

According to two people with close ties to the team, Walsh wanted the chance to hire and groom his successor, but Dolan rejected Walsh’s list of candidates, which included Mark Jackson, a former Knicks guard. Dolan had previously vetoed Walsh’s attempt to hire Chris Mullin, a former Golden State general manager. According to the same person, Dolan also wanted Walsh take a 40 percent pay cut — a request Walsh considered an affront, but not a deal-breaker.

“It was all about autonomy and about the future,” said one of the people with ties to the Knicks.

These concerns had been known for months, but there was a strong belief inside and outside the organization that Walsh and Dolan would reach agreement on a two-year deal. Even in recent days, all signs pointed to Walsh’s staying on as president.

Glen Grunwald, the senior vice president for basketball operations, will serve as the team’s interim general manager, starting July 1, until Walsh’s replacement is hired. Barring a labor stoppage, Grunwald will be in charge when free agency opens.

Walsh, who was the Indiana Pacers’ chief architect for two decades, is one of the ’s most respected front-office executives. In New York, he will be remembered for saving the Knicks from the misery and mayhem of the Thomas era.

Walsh replaced Thomas in 2008 and spent the next two years purging the roster of bad contracts and bad characters. The payoff came last summer, when Walsh — after missing on LeBron James as a free agent— signed Amar’e Stoudemire, providing an instant dose of credibility to a long-suffering franchise. The Knicks just completed their first winning season in 10 years.

Walsh has been slowed by operations to his hip and neck, but he said Friday that his health was not an issue. He had said for months that he had no intention of retiring soon and that he wanted to complete the job of rebuilding the team. In Friday’s conference call, Walsh suggested that his age was a factor.

Walsh said that he wanted to continue as the team president for perhaps another year or two, but that Dolan wanted a longer commitment.

“I don’t know that I can commit to that, because I’m getting older,” Walsh said, invoking his age for the first time in his Knicks tenure. “I do this job only one way, and that is full forward ahead. It’s 24-7 with me, and I think that’s what it takes, to be honest.”

Walsh said, “It took me a lot of energy the last three years to do this,” then added with a laugh, “I’m running out of energy.”

The diplomatic approach was consistent with Walsh’s philosophy. He values discretion, disdains controversy and believes in keeping disputes private. He was uncomfortable when his uncertain contract status became a news story in February.

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