Varejao Offer Scores One For Cavs and the Owners

Finally, the Anderson Varejao stalemate will end.

The mop-topped Brazilian forward is nicknamed "Sideshow Bob" due to his resemblance to the "Simpsons" character, but lived up the name in a completely different way this off-season thanks to a protracted contract holdout where he and the Cleveland Cavaliers stood miles apart. The drama came to a close yesterday when the Charlotte Bobcats signed the high-energy forward to a three-year, $17 million offer sheet, giving the Cavs seven days to either match the offer or let him walk.

Cleveland is almost certainly going to match rather than lose an asset for nothing, resulting in their Eastern Conference championship team of a year ago finally being intact again. It seems a little odd that it took this long to get a resolution, but both sides dug in their heels after initial negotiations went nowhere. With Varejao a restricted free agent, teams were reluctant to do what Charlotte did and commit salary cap space by signing Varejao to an offer sheet. That Varejao signed one with Charlotte probably has more to do with politics than basketball. The Bobcats have no realistic hope of Cleveland letting him walk at this price, but wanted to do a favor to Varejao's agent, Dan Fegan, who represents several Charlotte players as well as several other prominent players throughout the league.

Fegan had been positioned for an embarrassing setback after the Cavs reportedly wouldn't budge on paying Varejao more than about $6 million per year, while his camp reportedly had pushed for deals in the $9 million per year range. With restricted free agency tying Varejao's hands, he could do nothing but stay away and hope the Cavs floundered and met his price out of desperation.

In the end, he had to settle for an early opt-out as a consolation prize. The deal allows Varejao to void the third year and become an unrestricted free agent, which would let him finally play the open market and get what he perceives to be his fair value. The dollar figure is equal to or less than what the Cavs offered, but Cleveland had hoped to lock up his rights for a longer period.

Thus, embattled Cavs general manager Danny Ferry emerges as a big winner from this summer. He held the line on salaries for restricted free agents Varejao and Sasha Pavlovic, and won the staredown in both cases. The team is still over the luxury tax threshold, but by keeping both players for reasonable salaries, Cleveland is much better positioned heading forward.

And you'll notice a lot of other general managers and owners breathing a sigh of relief as well. If Varejao had won out and gotten the six-year, $52 million deal he'd originally been seeking, it would have created mayhem in front offices next summer. Now it's the players who are feeling the pinch.

To understand why, you must realize that Varejao is just the tip of the iceberg. The trend of signing quality young players to enormous contract extensions has fizzled out in the past couple years, to the point that now only the best and brightest stars get deals of that nature. Of the 24 players who were eligible to sign rookie-contract extensions this off-season, only six did; the rest will be restricted free agents this summer.

In the extreme, that means we could see 18 Varejao situations next year. In each case, their team will be able to match any offer from another club, which has the tendency to chill the market for those players. Besides the scourge of restricted free agency, players face an additional frustration getting their money. Only one team, Philadelphia, should have enough room to make a sizeable offer to another team's free agent. A couple others could potentially get there depending on trades or contract opt-outs, but the larger point is the same — there won't be nearly enough money on the market next summer to swallow up the restricted free agents who are available, let alone the additional unrestricted free agents (Elton Brand, Gilbert Arenas, etc.) coming out.

And these are some darn good players we're talking about. Atlanta's Josh Smith and Josh Childress, Chicago's Luol Deng and Ben Gordon, Charlotte's Emeka Okafor, Philadelphia's Andre Iguodala, Golden State's Andris Biedrins, and the Nets' Nenad Krstic will be among those likely to be hugely disappointed by what's on offer next summer. The fact that several of those players already turned down big-money deals will only heighten the frustration.

So score one for the owners here. The combination of luxury tax and restricted free agency are combining to serve their purposes, restricting the trade in the highest-value players to the extent that deals at or near the league's maximum salary have become increasingly rare; Varejao's plight is the icing on the cake in this regard.

In the meantime, perhaps it's time to look at one other question: How pertinent is the move for this season?

Cleveland is off to a rocky 9–9 start heading into yesterday's games, and Varejao's absence has been felt. He was a key defensive player who led the league in offensive fouls drawn last season. Without him, the Cavs have fallen from fourth in Defensive Efficiency (my measure of a team's points allowed per 100 minutes) a year ago to a mere 20th this season.

Varejao wasn't the only factor. The Cavs also have lost Larry Hughes and Eric Snow, two of their best defenders, to injuries, and Pavlovic, another quality stopper, missed the start of the year during his own holdout. Nonetheless, Cleveland's defense figures to improve quite a bit with him back, and defense has been the major difference between this year's mediocre squad and last year's conference champs.

There's one hitch, however: Don't expect things to change right away. It's all but inconceivable that Varejao is in basketball shape right now, and he'll likely need a couple months to get into the hyperactive state that made him such a force off the bench the past two seasons. Until his conditioning improves, look for the Cavs to keep scuffling along.

But when we look ahead to the spring, the message is the same: The already improving Eastern Conference neighborhood just became tougher again. By April the Cavs should be ready to join the Magic, Celtics, and Pistons in the East's elite, which in turn piles on one more piece of bad news for Nets fans hoping for a return to the promised land.

All told, the big winners from the Varejao deal are the Cavs and the owners, while the losers are the players, obviously, and, perhaps less obviously, Eastern teams like the Nets.

jhollinger@nysun.com