Donnie Walsh had a verbal agreement weeks ago with Knicks owner James Dolan to return as team president with full autonomy in basketball operations. The 70-year-old was even willing to take a paycut to finish the job of returning the Knicks to NBA relevance.

But when Walsh got the contract documents in recent days, there were addendums regarding the power structure with which he was uncomfortable. It became the final straw in his tumultuous relationship with Dolan.

The wording in the contract did not give Walsh full and final authority to hire and groom his successor -- which was something he sought. The source said Walsh was offered a downgrade in salary to roughly $2.5 million after making in the $4.5M range this past season.