In a major surprise, an arbitrator ruled in favor of New York Knicks free agents Jeremy Lin and Steve Novak, allowing the players to receive early-Bird free agent rights that will allow the Knicks to sign them and maintain their mid-level exception, according to Howard Beck of the New York Times. This affords the Knicks a better opportunity to re-sign both players.
Prior to the ruling, the Knicks would have had to use a section of their mid-level exception, a mechanism for teams over the salary cap to sign free agents up to the average NBA salary, to keep Lin and Novak. This was because both players were claimed by the Knicks after having been waived by other teams. Now, however, the Knicks can re-sign them and still have the mid-level exception to use on other team's free agents.
In addition to Lin and Novak, Chauncey Billups of the Clippers and J.J. Hickson of the Blazers now have full Bird rights. Both players were claimed by teams after being released -- Billups with the Amnesty clause, Hickson at the trade deadline.