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 NEW YORK (AP) -Deciding what to do with Isiah Thomas might be the easy part for Donnie Walsh.
Making the New York Knicks a contender in the future and competitive now is a much bigger challenge.
That's the task facing the New York native, who returned home Wednesday to become president of basketball operations for the Knicks.
If the Knicks are patient and let some of their longer contracts come off the books, they can have salary cap room in the summer of 2010, when LeBron James and Dwyane Wade could be free agents. But doing so might mean two more losing seasons for a franchise that's endured seven straight.
``I think that in three years we've got a chance to have flexibility in the cap. So that to me is one thing we've got to protect,'' Walsh said. ``But in the meantime, I think that we've got to make this present team as competitive as we can make it. And that's going to be the trick.''
One Thomas never figured out since becoming president in December 2003. The Knicks are a mess in the present with no plan for the future, which is why he lost one of his jobs, just 13 months after Madison Square Garden chairman James Dolan gave him a multiyear contract extension.
Walsh will decide if Thomas keeps the other one as coach.
That won't happen yet, though. Thomas was in Memphis on Wednesday, where the Knicks continued a five-game road trip with a 130-114 loss, and Walsh won't determine the coach's future until they have met in person.
``I need to sit down with Isiah and have a meaningful basketball conversation,'' Walsh said.
Walsh hired Thomas to coach the Indiana Pacers in 2000, and both say they enjoy a good relationship. Walsh said they spoke Tuesday, adding that Thomas has a ``great basketball mind'' and believes he can still help the organization in some way.
Thomas said he's willing to do whatever necessary to help the Knicks get better and agrees the team must look to the future.
``I think we all understand that 2010 is an important year,'' Thomas said. ``We've all been targeting that year.''
Walsh also said he needed to talk to players like Stephon Marbury and Eddy Curry before deciding their future with the team. Like many people throughout the league, Walsh said the Knicks have talented individuals on their roster and believes the problem could be ``the mix of players.''
``Beginning of the season, if you just looked at the roster, you'd say these guys could be pretty good,'' Walsh said. ``And I really thought that.''
The Knicks haven't won a playoff game since 2001 and are perhaps the league's most dysfunctional franchise. But Walsh's hiring brought praise from commissioner David Stern and members of the Pacers organization, where Walsh was a respected executive for 24 years.
``I wish him the very, very best,'' Indiana coach Jim O'Brien said. ``I think they're getting a remarkable executive, first-class man and I think this will be the first, gigantic step for the New York Knicks to turn around their fortunes.''
Dolan gave Walsh full autonomy to shape everything from the team's roster to the organization's media policy.
``His mandate is clear - do whatever is necessary to turn this team around,'' Dolan said.
There is so much to fix. But Walsh said he is not returning home to be a savior.
``I'm not the great new hope. I'm just a guy who's going to come in and try to create a team.'' Walsh said. ``And it's not going to happen overnight, so I don't want any illusions. But I think it has to get better right away.''
Walsh will report directly to Dolan - Thomas reported to MSG Sports president Steve Mills - and has been assured there will be no interference from above. Dolan remains loyal to Thomas, but Walsh said that won't influence his decision concerning a coach.
``He's more or less left this up to me,'' Walsh said of Dolan.
The 67-year-old Walsh joined the Pacers' front office as general manager in 1986, became team president in 1988 and CEO in 2003. He helped the franchise rise from NBA laughingstock to title contender.
``One of the highest things on my list is Donnie's happiness,'' Pacers co-owner Herb Simon said. ``If that is what he wants, I'm very happy for him. He has given us 24 years of incredible service. I think he'll do a great job.''
Dolan will even allow Walsh to dictate his media policy. The Knicks don't allow individual interviews with players or staff unless a public relations official is present, and Walsh is known to be friendly with the media.
``I think access is a big part of most franchises,'' Walsh said.
The Knicks and Pacers once had a fierce rivalry, meeting in the Eastern Conference finals in 1994, 1999 and 2000. Walsh remembers what Madison Square Garden was like back then, and wants it to be that way again.
``That's it. That was it. That is it. That's where I want to go to, get that back,'' he said. ``That's what I'd like.''
---
AP Sports Writer Teresa Walker in Memphis contributed to this report.

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