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Glen Davis and Leon Powe are Unrestricted Free Agents? Inconceivable!

In the waning moments of Game 7 between the Magic and the Celtics, when it was clear that Boston's season was over, TNT displayed the obligatory "Off-season priorities" graphic.  On it, they listed both Glen Davis and Leon Powe as unrestricted free agents.  This is simply not true.  Both Davis and Powe are RESTRICTED free agents.

It's a common mistake, one we've made on Clips Nation regarding Steve Novak's status.  As Vizzini might say, we fell victim to one of the classic blunders.  "The most famous is never get involved in a land war in Asia, but only slightly less well-known is this: never go in against a Sicilian when death is on the line!"  Slightly less well-known still is, never assume that second round picks are not restricted free agents.  From time to time we like to get into the nitty gritty of the CBA in order to understand better what's going on, so let's look at what appears to be causing so much confusion.

The issue seems to center around second round picks, as Davis and Powe and Novak all are.  This is because first round draft picks have their own set of of very, very specific rules under the CBA, and those rules tend to be better understood (mainly because those players have such high visibility).  For first round draft picks, the first two years are guaranteed at a salary determined by their draft position, years three and four are team options, and the pick USUALLY can become a restricted free agent after four years in the league.  So the high visibility RFA's, the ones that are most likely to sign for big money, fall into that category.  Even so, the team has to make a qualifying offer (again, for a specific amount determined by their draft position) in order to secure the right of first refusal, the essence of the 'restriction' on a restricted free agent.

Many of the first rounders from the draft class of 2005 will be RFA's on July 1.  The best of the best have already signed big money extensions - Chris Paul, Deron Williams, Andrew Bogut, Andrew Bynum, Danny Granger - and Portland locked up Martell Webster on the cheap.  But Marvin Williams and Charlie Villanueva lead a group of intriguing if not overwhelming four year vets into RESTRICTED free agency this year. 

Of course there are lots and lots of exceptions.  Yaroslav Korolev was drafted in 2005, but the Clippers declined their third year option on him.  Likewise, Luther Head was waived by the Rockets this season, and finished the year in Miami.  He is no longer governed by his first round draft pick contract, but rather by his one year deal in Miami.  And Utah did not exercise their third year option on Morris Almond, a first round pick in 2007, making him an UNrestricted free agent this summer.

Second round picks (or more to the point, everyone other than first round picks) are governed by a different set of rules - but it does not mean they are never restricted free agents.  Why does TNT think they are?  Well, I'm guessing it's mostly slothfulness.  There are a handful of very popular web sites that most everyone, whether they are fans or bloggers or graphics guys at TNT, tend to turn to for salary and contract information: HoopsHype is the de facto standard, although ShamSports is probably a little more thorough and accurate.  On HoopsHype, the first round picks are listed with their option years and even the amount of the qualifying offer.  What happens is that many, many people look at the qualifying offer Ilisted in green type) and incorrectly correlate it directly to RFA's.  Unfortunately, whereas it is true that all green qualifying offers on HoopsHype are Restricted Free Agents (assuming the team actually extends the offer), the converse is NOT true - not all RFA's have green qualifying offers on HoopsHype. 

So take a quick look at Boston's page on the site.  Look at Rajon Rondo - a first round draft pick in 2006, the team has already exercised their fourth year option on him for next season, and his QO of almost $3.8M is listed for the following season.  If Boston does not extend him before summer 2010 (which they probably will), he will be an RFA at that point.  Simple:  Green = RFA.  Now look at Davis and Powe.  Davis was a second round pick in 2007, Powe a 2006 second rounder.  Neither is signed for next season, and as such HoopsHype lists a zero for them.  For most people, that zero has come to mean UNrestricted free agent.

Unfortunately, the wealth of information available on the web has made everyone lazy, and very few people actually understand the underlying rules (and I'm not suggesting that I'm one of them, but I do try.) 

The fact is, restricted free agency is not limited to first round draft picks.  Here is the relevant sentence from Larry Coon's Salary Cap FAQ (but you really should read the whole thing on RFA's):

Restricted free agency exists only on a limited basis. It is allowed following the fourth year of rookie "scale" contracts for first round draft picks.... It is also allowed for all veteran free agents who have been in the league three or fewer seasons.

(Emphasis added.)

Glen Davis, Leon Powe, Steve Novak, Paul Millsap - they all fall into that second category.  They have been in the league three or fewer seasons. 

As it happens, the team still has to make a qualifying offer in order to secure their right of first refusal - but given that second round picks usually sign rookie minimum contracts, the QO is invariably so small as to be insignificant.  Again, from Coon's faq:

The qualifying offer for all other players [i.e. other than first round picks] must be for 125% of the player's previous salary, or the player's minimum salary plus $175,000, whichever is greater.

That puts the QO for all of these guys (Davis, Powe, Novak, Millsap, etc.) right around $1M - HoopsHype and ShamSports could list them (and probably should, I guess), but they tend not to impact the team's future cap situation significantly, so that's likely why they don't.

So, as Inigo said to Wesley, "Let me 'splain. [pause] No, there is too much. Let me sum up."

  • First round picks become restricted free agents after their fourth season, provided the team has exercised all of their contract options on the player and then extend a qualifying offer;
  • All other NBA players are restricted free agents provided they have been in the league three or fewer seasons and the team extends a qualifying offer.

There are many other things that get confusing surrounding these second round picks.  One issue that often gets conflated with RFAs is the question of Bird rights.  Back when Gilbert Arenas signed with Washington, the Warriors were unable to match the Wizards offer.  However, that was NOT because Arenas was unrestricted - it was because the Warriors did not have full Bird right's and were therefore not allowed to go over the salary cap to retain him. (That loophole has since been closed, but the solution is incredibly complex, even by NBA CBA standards - feel free to read about it if you like.)

Here are two key things you need to remember about Bird rights:

  • As we learned in Schoolhouse Rock, three is the Magic number.  A player qualifies as a Larry Bird free agent if they have been in the NBA at least three consecutive years without being waived or without signing as a free agent. 
  • Bird rights are tradeable.  So the Clippers have the right to go over the salary cap to sign Steve Novak, even though he has not played for LA for three seasons, because he has played under his current contract for three years and Houston traded him to LA.  (By contrast, Luther Head was waived and signed with Miami as a free agent - Miami does not have Head's Bird rights.)

Because three is a 'sweet spot' here (RFA's have been in the league three or fewer seasons, Bird free agents have been under contract three or more seasons), three year vets like Novak and Powe and Millsap have a set of circumstances making them much like first round picks:

  1. they can sign for any amount of money;
  2. their current team can choose to match any offer (i.e. they are restricted free agents);
  3. their current team can go over the salary cap to do so (i.e. the team holds the player's Bird rights).

Of course, this is most applicable to Millsap, as he is the only one of the three who is going to sign for more than the mid-level exception.

Glen Davis, on the other hand, being a two year veteran, is an 'early Bird' free agent - Boston can go over the cap to re-sign him, but only up to the mid-level exception.  Fortunately for them, in the wake of the Arenas situation, other teams are only allowed to sign him for the mid-level, so Boston can definitely keep him if they really want to.

So there you go.  A quick primer on RFA's and Bird rights.  If you don't get it all, don't feel bad.  Neither do the guys at TNT.

Getting back to the point of the graphic, Boston does have some difficult decisions this summer.  All of their starters are already signed, the big three to truly massive contracts.  They are already over the luxury tax threshold, without any significant salary coming off their books at this time.  Moverover, two key reserves in Davis and Powe are restricted free agents.  The fact that TNT reported them as unrestricted is sloppy, but not significant - they'll play for Boston if they can get paid.  But they both made major contributions to the team while playing for the league minimum.  They are clearly in line for decent pay days, which will push the team's payroll to new heights.  (Of course, Powe's situation is further complicated by his ACL injury.)  It's Boston, so they'll likely continue to be over the tax threshold (way over the threshold) through the end of next season when Ray Allen's deal expires.  But even the Celtics are going to have to think long and hard about signing Big Baby for $5M when it's really going to cost the $10M.

On a related note, if you want a late first round pick in this draft, get on the phone with Danny Ainge.  The last thing he wants right now is a guaranteed salary for a player unlikely to hlep next season.