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An Overdue Resolution

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An Overdue Resolution
Authored by Quinten Farmer - December 12, 2007 - 7:51 pm



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In a long running saga that has drawn the attention of the entire league and the ire of the players union, free agent power forward Anderson Varejao finally re-signed with the Cleveland Cavaliers. Varejao, whose holdout stretched through an entire off-season and into the opening months of the regular season, finally signed a 3 year, 17 million dollar offer sheet with the Charlotte Bobcats that was quickly matched by the Cavaliers.

While Varejao’s return will obviously help a team that has struggled mightily this year, the signing’s true effect is much more than the return of an energy player to a team desperate for depth. Varejao’s story has come to represent the major flaws in the way the NBA deals with “restricted” free agents.

Restricted free agency was originally implemented to aid teams in retaining their young talent. The system in place prevents the easy movement of players who have been in the league for three seasons, all with the same team. The league’s collective bargaining agreement (CBA) does this by allowing any team to match contract offers made by competing teams, even if by doing this the team goes over the salary cap.

Since the last revision of the CBA in 2005, the restricted free agency system had been working fairly well. Teams were able to retain the young talent they had invested considerable time and marketing into, and fans were happy to see players grow and mature with their team. A perfect example of the system’s triumph was the ease with which the phenomenal draft class of 2003 was re-signed when they came due for contract extensions. Knowing that they could not receive a better offer from competing teams, superstar players such as Lebron James and Dwyane Wade were compelled to sign extensions early, preventing any unseemly holdouts or desertions to other teams.

Unfortunately, the relative success of the system came to a grinding halt this past off-season. While there were several situations involving restricted free agents that turned into embarrassing debacles for both team and player (Mickael Pietrus in Golden State, Maurice Williams in Milwaukee), none typified the problems more than the Anderson Varejao situation.

The debacle began after Varejao became a free agent at the beginning of the off-season. Varejao’s agent immediately made it clear that Varejao would accept nothing less than something in the range of a 45 million dollar deal. Cleveland balked at paying almost 9 million a year for a player who contributed mainly by hustle and scrappiness. The two sides, apart by millions and with no hope of coming to terms, reached an impasse.

Now, in a more typical free agency situation, Varejao would have simply solicited offers from other teams, setting the market for his services. He then would have had the option to either sign with another team outright, or go back to the Cavs with the offers as bargaining chips. Instead, teams with cap room were wary of making an offer sheet to Varejao, knowing that Cleveland would match all but the most obscene offers. Because of this, the Cavaliers were content to wait it out, knowing that Varejao wasn’t going anywhere, despite the fact that the team was making no effort to sign him.

After it was apparent that neither side would budge, the Cavaliers conceded a small victory by offering Varejao the league qualifying offer, a 1-year deal which would leave him an unrestricted free agent after the deals termination. Unfortunately, Varejao and his agent refused to accept the offer, still holding out for their desired terms. Yet again, the free agency system that prevents players from getting fair market value for their services handcuffed Varejao. This, added to the unfortunate hubris displayed by player and agent, prevented an ideal resolution to the negotiations.

The Charlotte Bobcats brought the embarrassment to a merciful end (albeit one that came after more than a month of regular season play) by extending an offer sheet to Varejao. Still, this action only further drove home the issues with restricted free agency. As expected, the Cavs quickly matched the short term, and comparatively cheap offer. As they knew would happen all along, Varejao is now forced to return to the team, tail between his legs. While it is still questionable whether Varejao will present his best efforts to a team he clearly doesn’t want to be with (despite press releases to the contrary), he is still under contract with the Cavaliers for 2 seasons, at exactly the terms the Cavs originally wanted.

In essence, Varejao never truly became a “free” agent. His future was almost as much at the mercy of the team as if he were under contract with them. This is not only unfair to Varejao, but also to other teams who could have bid for his services, but were scared away by his restricted status.

If teams are not given the opportunity to sign quality young talent, then a good deal of the allure of free agency is lost. Granted, the restricted system was put into place to guard the players that teams had put years into developing, but this protection cannot be had at the expense of the rest of the league. By denying teams the ability to lure away talented players in the prime of their career, the league loses out on the fluidity and wide ranging competitiveness that has helped to make leagues such as the NFL so popular in recent years.

While a switch to an open ended, NFL like system would not be beneficial for the NBA, a reevaluation of the free agency system currently in place is a must. If the current trend of teams holding young players hostage continues, the players association will most certainly be raising the issue when the next Collective Bargaining Agreement discussions begin. Although the current CBA is in place till at least the 2010-11 season, Stern and the league would be well served to attack this issue proactively. By doing this, Stern may prevent another Varejao like debacle, which was an embarrassment to both the team and the league as a whole. Hopefully, the league and players may agree on a system that protects both the players, and the competitiveness of the league as a whole.