Riley left with one year remaining on his contract and with a five-year, $15 million contract extension offer on the table. Through a statement issued by his public relations firm, Riley said that his resignation had "absolutely nothing to do with money," but that philosophical differences with management, and management's refusal to give him more control over basketball matters, had led to his decision.
But Dave Checketts, president of Madison Square Garden, said that the 50-year-old Riley wanted part ownership of the team and complete autonomy, and that his heart was no longer in the job when those requests were denied.
In Riley, whose coaching record of 756-299 represents the best winning percentage (.717) in league history, the Knicks lost one of the NBA's most successful and charismatic coaches.
After winning four NBA championships in nine years with the Los Angeles Lakers, Riley succeeded John MacLeod as Knicks coach in 1991, leading New York to records of 51-31, 60-22, 57-25 and 55-27, with three division titles.
Last season Riley guided the Knicks to the NBA Finals, where they lost in seven games to the Houston Rockets. This year the Knicks were eliminated by the Indiana Pacers in the Eastern Conference semifinals.
Other coaches the Knicks might like to have include Larry Brown, Phil Jackson, Mike Fratello and Lenny Wilkens, all of whom are under contract to other NBA teams and would be impossible to hire without permission and compensation.
Riley cannot coach elsewhere next season unless given permission by the Knicks. But they could let Riley out of his contract if they are compensated by another team.
The Miami Heat, looking for a coach, has the No. 10 pick in the draft later this month, and Miami also has Atlanta's first-round pick next year. Dave Wohl, Miami's general manager, was an assistant under Riley with the Los Angeles Lakers. Although Miami reportedly is close to signing Bob Huggins of the University of Cincinnati, that might change now that Riley is available.
Asked if the Knicks would allow Riley out of his contract if they received compensation from another team, Checketts left the door open, saying, "We have a very valuable person and asset who is under contract." Checketts said he believed Riley would coach again.
Checketts and general manager Ernie Grunfeld explained their side of the issue at a news conference. Riley didn't appear or return a phone call to his home in Connecticut.
"I regret his decision to leave," Checketts said. "We never really got close to his financial demands. We had offered him a financial package that was unprecedented in any sport. He wanted ownership. He wanted autonomy. He wanted a number of things that we really couldn't give to him.
"We gave him complete control and autonomy over the basketball operations. In addition to that, he had the right to veto any player transaction that was proposed. He never did. . . . If there's anything that was disturbing about today's statement, it is that it was portrayed as some sort of power struggle."
Riley had a different view. In his statement, Riley said: "Regrettably, there were serious differences and questions about authority and final decision making. I do not believe that any team can realize its potential when its head coach, the person most intimately involved with the players, cannot make the final, critical decisions on matters bearing directly and intensely on the team, its performance, and its future.
"For the last two years, I had consistently and repeatedly expressed to Knicks management my desire and need to be charged with ultimate responsibility for all significant aspects of the ballclub. During this time, I tried my best to reach an agreement with management on these issues. Unhappily, the gap between us could not be bridged."
Checketts and Riley met last Friday at the coach's home, and Checketts failed to persuade Riley to stay.