The Rockets have reportedly dropped a bombshell, greatly increasing the third-season salary in the offer sheet signed by Jeremy Lin on Friday.

Last week, it was reported that the Rockets and Lin had agreed on an offer sheet totaling approximately $19 million guaranteed over three seasons, with a team option on the fourth and final season.

The deal was increased to $25 million total over three years, with the final season now nearly $15 million.  That final season could cost the Knicks as much as $45 million in luxury tax payments.  It is unclear if a team option still exists for a fourth season.

Some believe Houston is now desperate for a point guard after Goran Dragic and Kyle Lowry left the Rockets this summer.  But general manager Daryl Morey could still expect the Knicks to match, and he may be more concerned with driving down Lin's value as a future trade chip in New York's arsenal.

Chris Paul is eligible to hit the free-agent market next summer and a package centered around Lin, under more reasonable contract terms, could have enticed the Clippers to trade the All-Star point guard to New York.  Inflating Lin's contract terms will make him less attractive to the cost-conscious Donald Sterling, keeping Paul on the path to free agency and in play for Houston as it seeks to remake its roster.

These maneuverings may set up the Rockets' longer-term strategy of acquiring Dwight Howard and keeping the All-Star center in Houston by pairing him with an elite play-maker like Paul.

The Knicks will have three days to match the deal or lose Lin to Houston.  New York clearly intended to match under the offer-sheet terms originally reported.