I think it's fair to say no one understands how NBA contracts and salary cap rules work. That's why ESPN hires a guy solely for the purpose of answering obscure questions about it. But a strange situation involving Jeremy Lin and Steve Novak, a situation we really would have expected to come up sometime before, went before an independent arbitrator last week—and today ended in a big victory for the players' union, and for the Knicks.
At issue were Lin's and Novak's "Early Bird Rights," which gives teams more flexibility to re-sign players who have spent a certain number of years on the roster. This is good for the player, in that they tend to make more money re-signing with their old teams, and good for the team, because those signings don't count against the cap. The question was, do Lin and Novak, who were waived before being picked up by New York, retain their rights? Against most predictions, the arbitrator said yes. The Knicks are right up against the cap, so this ruling means they'll be able to afford give Lin and Novak around $5 million apiece.
There's more! If the league had won this hearing, the Knicks would have been forced to use their midlevel exception to fit Lin in under the cap. Now they've still got that, plus a bi-annual exception, in their back pockets, to dangle in front of any veteran free agent. Which means Steve Nash will actually have to admit to only humoring the Knicks to drive up his price for actual good teams, instead of just saying, "Aw, sorry it couldn't work out, New York!"