In a surprise ruling on Friday, New York Knicks' Jeremy Lin and Steve Novak, Los Angeles Clippers' Chauncey Billups and Portland Trail Blazers' J.J. Hickson secured Bird and early Bird rights in a hearing between the NBA Players Association and the league.
The decision was made by arbitrator Kenneth Dam, who affirmed that players claimed off waivers are able to retain their valuable Bird and early Bird rights when they become free agents. That means that if Lin, Billups, Novak and Hickson re-sign, their teams can go over the salary cap. The Celtics were the first team to use this exception, re-signing former star Larry Bird to go over the cap.
All four players were waived this season and claimed by other teams. They will become free agents July 1.
In addition, future players claimed off waivers likewise will benefit from Friday's ruling.
The NBA said it would appeal Friday's ruling. The players' association believes the appeal from the league will not be resolved by July 1, the start of free agency.
"The NBA is entitled under the CBA to file an appeal, and we will respond accordingly. We don't think any such appeal has merit, and we are confident that the decision will stand and these players will benefit from it, whether it's through an expedited appeal process or a negotiated resolution," said Ron Klempner, deputy general counsel of the players' union.
Lin and Novak will enter the 2012-13 free agency period with early Bird rights, meaning that they can be re-signed for 175 percent of their salary the previous season or the NBA average salary, whichever is greater.
Billups and Hickson will have Bird rights, meaning they can be re-signed up to the maximum salary.
"Bird and early Bird rights are the lynchpin of our Soft Cap system, and we're pleased that Professor Dam recognized that a player does not forfeit these important rights unless he makes an affirmative decision to sign with a new team as a free agent," NBPA executive director Billy Hunter said in a statement released by the players' union. "Players fought hard for a Collective Bargaining Agreement that allows maximum flexibility for free-agent players while also permitting teams to retain their core free agents, and today's decision affirms both of these important principles."
The ruling is especially huge for the Knicks. They can now retain Lin, Novak and Landry Fields at up to $5 million each and then sign an additional player at $3 million or less with their mid-level exception. The Knicks will likely be in the market for a seasoned veteran point guard. The ruling is one step toward creating enough space to go after a player such as Steve Nash, Jason Kidd, Andre Miller or Raymond Felton.
The Knicks could also retain J.R. Smith if he accepts his player option of around $2.5 million. He has until June 26 to decide if he wants to opt in or out. He can opt out of his player option and then re-sign at 120 percent of his previous year's salary using a non-Bird exception.
Beyond that, the Knicks will have veterans' minimum contracts of only $1.4 million to spend to fill out the rest of their roster.
Jared Zwerling is a regular contributor to ESPNNewYork.com. Information from The Associated Press was used in this report.