Leave it to the team owners to spend the NBA lockout coming up with rules that are woefully misnamed. Scott Schroeder passed on a report from Marc Stein that a whole slew of collective bargaining agreement changes are on the table this weekend, along with those big-ticket items like "will we have a season?" and "who gets most of the money the league makes?" One was the "Melo Rule."
The "Melo Rule" -- named after Carmelo Anthony, not Syracuse Orangeman Fab Melo, to be sure -- would prevent players from signing Bird rights extensions with teams that acquired them via trade after the July 1 in advance of their final season under contract. For example, if one year ago Carmelo Anthony had been under contract through the end of 2010-11, and the Melo Rule was in place, he would not have been allowed to sign a Bird rights extension with the New York Knicks upon being traded there by the Denver Nuggets in February. The Knicks did not have the cap space to sign him to an extension outright, and as such, the Knicks would have been kind of screwed as 'Melo moved to free agency and signed with the Sacramento Kings, which is only like a five-hour drive from Hollywood, you know.
But wait! 'Melo was signed through the 2011-12 season -- he had an early termination option for that final season, which meant that he could be an unrestricted free agent in 2011, which is why Denver felt pressure to trade him at the deadline. Had the Melo Rule been in place, Carmelo Anthony could still have been traded to the Knicks, waived his early termination option for 2011-12 (as he did in real life) and signed an extension using his Bird rights, which allowed the Knicks to go over the salary cap.
Now I hope the Melo Rule passes as described so that it can join the Allan Houston Rule in the pantheon of misnamed NBA rules.