Players Association’s Win in Court Has Huge ‘Linpact’

Just as a front came through New York City with heavy, cooling rains to wash away the oppression of the Heat, an arbitrator’s decision cleared the way for the Knicks to continue to build and potentially challenge a championship won in Miami the night before.

Kenneth Dam’s ruling in favor of the NBA Players Association stance that Jeremy Lin and Steve Novak do retain their Early Bird Rights was not just a win for the players’ union, but also for the Knicks. The move unshackled their ability to be players, and potentially significant players, in free agency this offseason.

If you’re just joining this conversation now, please refer to this blog we posted about the arbitration hearing last week. It will get you up to speed.

Now let’s explain what this means for the Knicks going forward:

The Knicks can re-sign Lin, a restricted free agent, without having to use their Mid-Level Exception. So if a team attempts to sign Lin to an offer sheet (up to the league average), the Knicks can match that contract without any restrictions. The same goes for Novak.

If the arbitrator had ruled in favor of the NBA and Lin did not maintain his Early Bird Rights, the Knicks would be extremely limited this offseason. Basically, they would be at the mercy of opposing teams signing Lin to an offer sheet that would cost the Knicks their entire full MLE. That, in turn, would trigger a clause in the NBA which caps non-taxpaying teams that use the full MLE to a limit of $4 million over the luxury tax threshold. So not only would the MLE be gone, but there would be very little room to do anything else, even with the $1.9 million Bi-Annual Exception and veteran’s minimum deals.

This is why the arbitrator’s decision is such a huge win for the Knicks.

By Lin maintaining Early Bird Rights, the team still has both exceptions, the MLE (either $3 million or $5 million) and the BAE, but it is still tricky here. The team will not likely use the full $5 million exception because of that clause we just mentioned that triggers the hard cap.

[Technically, the Knicks could use the full MLE, but it would be a great risk. Why? Because if they are held at the instituted hard cap, they can not add any more players for the entire 2012-13 season. This means if a player is injured, you can not sign a free agent to a veteran’s minimum or even a D-League player to a 10-day contract.]

Instead, expect the Knicks to go with the $3 million tax-payer MLE, which would not trigger the $4 million apron and hard cap. It would allow them to sign a free agent at $3 million, use the $1.9 million bi-annual to sign another player and still have the luxury of adding as many veteran’s minimum contracts as they please throughout the season. Trust me, this matters, especially when a player is amnestied or waived after the trade deadline.

So how do the Knicks sign Steve Nash with only the $3 million mid-level? The answer is simple: they don’t.

Instead, look for the Knicks to talk to several veteran point guards, from Jason Kidd to Raymond Felton, and possibly former Sixth Man of the Year Lamar Odom or veteran shooter Ray Allen, with the MLE and BAE in their pocket. Will they be enough to make a significant move? That remains to be seen. That depends on whether some of these veterans want to be part of taking on the Miami Heat. They are the new standard in the East and the Knicks know they have to build to beat them.

This is why I also look forward to seeing if Glen Grunwald and his crafty group can come up with another Tyson Chandler-type plan, using some of the other assets on this team. Consider the value in Landry Fields ($2.6 million qualifyer), Toney Douglas‘ expiring contract ($2 million) and non-guaranteed money in Dan Gadzuric ($1.3 million), Josh Harrellson ($762,195) and Jerome Jordan ($762, 195).

If a team is looking to sell and take nothing back, the Knicks have the pieces, plus $3 million in cash considerations, to put on the table. It’s not much, but as the Heat showed us, stars can get you far in this league, but a solid supporting cast (Shane BattierMike Miller) can get you to the top.

So as of now, the Knicks believe they can count on bringing back its starting five, plus one major piece of that Mobb Deep bench if Novak is interested. J.R. Smith has until Tuesday to decide whether he will pick up his $2.5 million option for next season or become a free agent. Even if he does not pick up the option and becomes a free agent, the Knicks can re-sign Smith for a 120-percent raise. In my opinion, it’s safe to pencil Smith in right now.

Jared Jeffries was a solid defensive big off the bench and has a place here, too, if he wants to return.

What this decision means is the Knicks have options they would not have had available had the arbitrator ruled in favor of the NBA. And they’re not completely in the clear yet because the NBA announced it planned to appeal the decision by Dam, so the case will be brought to an appellate panel for review.

The league has to appeal this, not only because it’s general practice to appeal when the right to appeal is theirs, but also because if they dismiss this loophole, they set a precedent for the NBPA to challenge several other possible ambiguities in the CBA.

There is still a little over two weeks before free agents can be officially signed, but the clock is ticking and the NBA knows it is unfair to have a team, and free agents, go into free agency uncertain of status. As for now, the ruling stands and Jeremy Lin’s future as a Knick is almost certainly secured