Re: Right of First Refusal

[Mike Dynon <mdynon@ix.netcom.com>]

Josh Ozersky wrote:
> 
> The players recently proposed a three year rookie deal with the team
> getting the right of first refusal when it was up.  Does anyone know
> what this means?
> 
> Josh

In the '70s, when free agency began, there was a straight compensation
system: for example, when the Jazz signed FA Gail Goodrich, the league
determined that the Lakers should receive two of the Jazz' future
first-round choices--one of which was used to select Magic Johnson(!). 
So you could sign a great player, but you didn't know who you'd lose.

That evolved into right of first refusal--ROFR--in the early '80s.  The
FA's current team had the right to match any offer from another team,
but it wasn't always that simple.  Often, once a team knew its FA would
be signing elsewhere, that team would match the contract and then trade
him to the team that had made the new offer.  That's how Bernard King
went from the Warriors to NY (for M.R. Richardson + draft choice) and
Moses Malone went from Houston to Philly (for Caldwell Jones and a pick)
in '82.  Another common strategy: Denver signed Alex English from the
Bucks, but had to part with a first-rounder for Milwaukee's guarantee
NOT to exercise the ROFR.

(BTW, all the facts above came from the NBA Player Register.)

I recall that teams started structuring their offers with "fringe
benefit" clauses to make contracts difficult to match (NBA management
has always tried to circumvent its own rules), so the league started
restricting ROFR and "match/don't match" types of trades.
Eventually--probably in the late '80s--ROFR was negotiated away.

Mike Dynon
North Kingstown, RI