NBPA, NBA agree to settle Bird Rights arbitration appeal

An arbitrator ruled in favor of the NBPA and Jeremy Lin. (Getty Images)

With just days to go before the NBA's 2012 free agency period is set to open, the National Basketball Players Association and the NBA agreed to settle an ongoing arbitrated dispute over whether players who are claimed off of waivers should have access to Bird Rights or Early Bird rights.

Last week, in a surprise move, an arbitrator sided with the National Basketball Players Association over the NBA in a dispute concerning whether players who are claimed off of waivers should have access to Bird Rights or Early Bird rights.

Shortly after last week's decision was announced, the NBA said that it would appeal. On Friday, the NBA announced that the two sides had agreed to a settlement.

The NBA announced today that it has reached a settlement agreement with the NBA Players Association of the recent arbitration proceeding filed on behalf of Chauncey Billups, J.J. Hickson, Jeremy Lin and Steve Novak. 

Under the settlement, the union agreed to limit the scope of the ruling by arbitrator Kenneth Dam in exchange for the league's agreement to drop its appeal. The rule will now be that players who are claimed from waivers will have the same "Early Bird" rights as if they had been traded, but will not have full "Bird" rights unless they are claimed through the league's amnesty procedure.

Dam had originally ruled that players claimed off waivers would retain their “Bird” and “Early Bird” rights when they become free agents. As a result of the arbitrator’s decision, Jeremy Lin and Steve Novak of the New York Knicks will enter the 2012 free agency period with “Early Bird” rights, and Chauncey Billups of the Los Angeles Clippers and J.J. Hickson of the Portland Trail Blazers will enter the 2012 free agency period with full “Bird” rights. 

What's the big deal? The goal of Bird Rights, a staple of the NBA's collective bargaining agreement for decades, is to allow incumbent teams every right to keep their own players rather than watch them depart in free agency by making it significantly easier to retain their services, especially if the team is over the salary cap. 

The Knicks are currently over the salary cap. This ruling allows them to re-sign Lin and Novak using "Early Bird Rights" without needing to use their mid-level exception. In other words, the Knicks are now free to spend real money to retain both players rather than trying to squeeze them into an exception. In turn, that exception can instead be used to add another free agent. The Knicks extended a qualifying offer to Lin earlier this week.

Billups, who was claimed in December 2011 after he was amnestied by the Knicks, is currently sidelined with a serious Achilles injury, so his future is not clear. However, the Clippers, who are also expected to be over the salary cap, would be able to re-sign him without using their exceptions.

Hickson, who was claimed by the Blazers after he was released by the Sacramento Kings, is in a slightly different situation. The Blazers are currently under the salary cap, meaning they can sign Hickson using their salary cap space. However, they could also sign free agents or execute trades that put them over the salary cap and then re-sign Hickson once that's complete, without needing to use their mid-level exception. The Blazers have not yet issued a qualifying offer to Hickson.

The original ruling was a huge win for the players, particularly Lin, who are now free to seek bigger-dollar deals from their incumbent teams. It's also a big win for the Knicks, in particular, because it gives them the ability to retain two key players and the flexibility to use their exceptions to add other free agents.

The settlement agreement is a minor win for the league going forward, as it creates a framework that's slightly more in line with the NBA's interpretation of how Bird Rights should be awarded.

That a settlement was reached in advance of July 1 is a major win for everyone. Order has been restored and the league's annual free agency free-for-all can proceed without distractions, confusion or hiccups.

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