The Precarious David Lee Situation

Alan Hahn's article from late last night updates us on David Lee's free agency. Despite the bravado of his agent, Mark Bartelstein, Lee is hearing crickets from the other 29 NBA teams.

Lee is a restricted free agent and, as the NBA transaction moratorium lifted yesterday with the announcements of signings such as Charlie Villanueva and Ben Gordon (Pistons), Ron Artest (Lakers), Rasheed Wallace (Celtics), Antonio McDyess (Spurs) and Chris Andersen (Nuggets), Lee had not a single offer sheet tendered by any of the few teams with cap space. And, so far, the Knicks have unrestricted free agent Grant Hill at the top of the priority list as they await the 36-year-old's decision, which is expected soon.

If no teams approach Lee with an offer sheet, the Knicks, who by no uncertain terms want to keep Lee (thus eliminating the prospects of a reasonable sign-and-trade scenario), would eventually be left negotiating against themselves for their own player. So with cap space in 2010 at a premium -- especially with reports that suggest the cap could drop as low as $50 million in 2010-11 -- the Knicks might force Lee to take his one-year qualifying offer of $2.7 million for this season. Obviously not something Lee, who last season made equal to the league minimum at $1.4 million, wishes to do.

By rule, however, taking his qualifying offer would then make Lee an unrestricted free agent next summer, which means he could sign with any team. The Knicks own his Bird Rights and, therefore, can sign him to a bigger contract than any other team (and go over the cap while doing it). That's believed to be their selling point to Lee.

Herein lies the risk: Lee, who has seen fellow 2005 draft classmates such as Andrew Bogut, Andrew Bynum and Danny Granger sign lucrative extensions, might not feel any loyalty to the Knicks. And in 2010, about half of the league will have significant cap space.

This is a little awkward for us as fans, because most of us love David Lee and would really love to see him remain a Knick. At the same time, we've been quietly celebrating his lack of market value as an RFA. Where is the line drawn between paying Lee what he deserves and impinging on the dire cap situation in 2010? Only complicating matters is the fact that Lee is being uniformly low-balled while Jason Kidd and (maybe) Grant Hill get fat multi-year offers. I'd be satisfied with Lee being forced to take his qualifying offer if Kidd hadn't been looking at $18 million over 3 years. Donnie Walsh has made it clear that he's willing to shell out more years and dollars than we originally thought. That's fine, but I think his wallet's in the wrong place.

I suppose the best case scenario would be for Lee and his agent to take the three years at $8-ish million a year that the Knicks originally offered, assuming the deal is still on the table. Should the Knicks present Lee only the qualifying offer, it'll open up options for the summer of 2010, but also send a message about how loyal New York is to keeping young, valuable talent around. Since we haven't heard from Lee himself about any of this, it's hard to say how he feels about the situation, and whether his loyalty may be waning.

What do you guys think? Is low-balling Lee good business, or does it send the wrong message? Should the Knicks try and meet Lee's people halfway and give him a multi-year deal, or should they push the qualifying offer? If I'm badly misunderstanding how basketball finance works, let me know. I've been known to do that. Speak up in the comments.