Last month, the NBPA announced that it was challenging the rule that players claimed off waivers lose their Bird rights. A hearing on the issue is scheduled for this Wednesday, at which point an arbitrator will rule in favor of either the league or the players' union. While the issue affects all 30 NBA teams, much of the discussion on the topic has centered around the Knicks, which isn't a surprise — New York is the team with the most to gain or lose from Wednesday's decision.
As the Hoops Rumors glossary outlines, a player's Bird rights clock can reset in a number of scenarios, including when he is waived and claimed off waivers by another team. The players' union is arguing that the Bird clock should not restart in that instance, since the players isn't switching teams as a free agent, and continues to play under his same contract. While the union's logic makes sense – changing teams via waivers is similar to being moved in a trade, in which case the Bird clock doesn't reset – the wording in the CBA on the issue is clearly presented and hasn't changed over the years. The union is expected to lose its appeal.
Players are rarely claimed on waivers, so the Bird rights issue doesn't arise often. This season, however, the Knicks happened to claim two players that they'd like to re-sign in free agency — Jeremy Lin and Steve Novak. Since both players were claimed by the Knicks in December, they only have Non-Bird rights, which will make it difficult for New York to match offers without dipping into its mid-level exception.
The Knicks presumably won't have any qualms about passing the luxury tax threshold and becoming a taxpaying team, but if they do so, they'll only have the $3MM taxpayer mid-level exception at their disposal. Because Lin is expected to receive offers with a first-year salary that exceeds $3MM, under the current rules, the Knicks would have to use the full $5MM non-taxpayer mid-level to retain their point guard, which would prevent them from passing the tax line later in the season. If the union were to win this week's ruling, however, Lin would gain Early Bird rights, meaning the Knicks could match any offer sheet for him under the Gilbert Arenas provision without using their mid-level. They could also re-sign Novak using the Early Bird exception, and could then use their MLE to sign an outside free agent.
Put simply, the Knicks have about $59MM committed to guaranteed 2012/13 salaries so far. Assuming they need to use the non-taxpayer MLE to retain Lin, under the current rules, that would give them about $15MM to re-sign Lin, Novak, J.R. Smith, and Landry Fields, and to bring in other players to fill out the roster, with a hard cap in the $74MM range.
If the union were to win the ruling, the Knicks could re-sign Lin, Novak, and Fields for up to $5MM each, could re-sign Smith for up to about $3MM, and would still have somewhere from $3-5MM in MLE money to spend on a free agent. The team also wouldn't be hard-capped and could bring in as many minimum-salary free agents as it needed over the course of the season.
The NBPA may be fighting on behalf of players across the league on Wednesday, but the Knicks and their free agents are the ones that stand to benefit the most. If the union loses its appeal, as expected, New York will also be the team that loses the most, as the team figures to have to let one or more of its free agents walk.