Here's where it all went wrong....
Post-Patrick Ewing era decline
Despite the loss of Ewing, the Knicks remained successful in the regular season, as they posted a 48–34 record. In the NBA playoffs, however, they fell in five games to the Toronto Raptors, failing to get past the first round of the playoffs for the first time in a decade.
Soon, the Knicks began suffering through a steep decline. After starting the season 10–9, the team was stunned on December 8, 2001 by the sudden resignation of Van Gundy. The team, which named longtime assistant Don Chaney as their new head coach, ended up with a 30–52 record, and for the first time since the 1986–87 season, they did not qualify for the playoffs.
The Knicks attempted to improve during the 2001–02 season by initiating a number of trades and free agent signings. Among these included acquiring guards Shandon Anderson and Howard Eisley, both of whom carried expensive, long-term contracts. These moves were criticized by many analysts and Knicks fans, as it was considered that not only were these players overpaid in light of their recent performances, but also because the contracts took up valuable salary-cap space. Such trades heavily contributed to the Knicks sky-rocketing payroll, which would burden them in the years to come. The Knicks improved slightly in 2002–03 but still delivered a disappointing season, posting a 37–45 record and failing to qualify for the playoffs for the second straight season.
Arrival of Isiah Thomas and Stephon Marbury
After a 15–24 start to the 2003–04 season, the Knicks underwent a massive overhaul. Isiah Thomas was named the Knicks' president on December 22, 2003 after the firing of Scott Layden, and eventually replaced Don Chaney with Lenny Wilkens behind the bench. At the same time, Thomas orchestrated several trades, including one that brought point guard Stephon Marbury to the team. The team seemed to have good chemistry following the Marbury trade as he executed the pick and roll successfully with the team's two jump-shooting big men, Keith Van Horn and Michael Doleac. However, that chemistry unravelled when the latter two were traded in a three team trade with the Milwaukee Bucks and the Atlanta Hawks, bringing in Tim Thomas and Nazr Mohammed. The team qualified for the playoffs that year with a 39–43 record, but were swept by the New Jersey Nets in the first round. The series included a much publicized spat between the Knicks' Tim Thomas and Nets' Kenyon Martin, in which Thomas challenged Martin to a fight in the newspapers and called him "Fugazy".
2004–05
The Knicks fared worse in the 2004–05 season, as they ended up with a 33–49 record. Wilkens resigned during the season, and Herb Williams served as interim coach for the rest of the season. During the off-season, the team signed Larry Brown to a five-year contract worth about $50 million, hoping he would lead the Knicks back to the NBA playoffs.
2005–06
In the summer before the season, the Knicks acquired two centers. Jerome James was signed for the Mid-Level Exception for five years plus a one-year player option. Later, Chicago Bull Eddy Curry, who reportedly had a worrying heart condition, was refusing to take a controversial heart test, and was on the outs with John Paxson, Chicago's General Manager. The Bulls signed-and-traded him to the Knicks along with Antonio Davis for Tim Thomas, Michael Sweetney, the Knicks 2006 first round pick, and the right to swap first-round picks with the Knicks in 2007, as well as 2007 and 2009 second-round picks. Isiah Thomas did not lottery-protect the picks, and the Knicks forfeited the second pick in the 2006 draft, and the ninth in the 2007 draft. The Knicks' payroll was the highest in the league at over $130 million, but the team finished the season with the second worst record in the NBA, just behind the Portland Trail Blazers, having finished the 2005–06 season with a dismal 23–59 record and capped off with the firing and $18.5 million buy-out of coach Larry Brown.
Over the last two years, Thomas' trades have been highly criticized, bringing in expensive players, such as Stephon Marbury, Jamal Crawford, Jerome James, Malik Rose, Jalen Rose, and Steve Francis. Moreover, Thomas has also accepted many bad contracts to make these trades, such as those of Penny Hardaway, Jerome Williams and Maurice Taylor, and given up draft picks. To Thomas' credit, his draft picks of David Lee, Trevor Ariza (later traded by Thomas), Nate Robinson, and Wilson Chandler are considered wise, as was his signing of free-agent center Jackie Butler, who later signed with the Spurs. Conversely, many considered his 2006 first-round draft pick of Renaldo Balkman very foolish, although Balkman's better-than-expected play in his rookie season led many to initially reverse this early sentiment before his play regressed in his second season.
Numerous anti-Knick websites have sprung up, most notably SellTheKnicks.com, who organized a march on Madison Square Garden, the home of the draft, to protest Dolan's "abysmal" management of the Knicks' players and coaching staff.