GREENBURGH, N.Y. -- By taking Greek forward Kostas Papanikolaou with the 48th pick in last night's draft, the Knicks proved their focus is on getting immediate help in free agency. More help could be on the way immediately.
Two league sources said the NBA and the players' union are nearing a settlement in the Bird rights case involving Jeremy Lin and Steve Novak. One of the sources believed both will receive some form of Bird rights, which should allow the Knicks to re-sign Lin and Novak without using their free-agent exceptions.
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Both sources said talks are ongoing and that a settlement is expected before free agency begins Sunday. "Both sides are working hard on it," one source said. "Both sides would like to put this behind them."
Knicks general manager Glen Grunwald said he took Papanikolaou, who is considered a good shooter, slasher and defender, because of his potential, but also because he didn't think anyone available would help his team now.
The 6-8 Papanikolaou plays for Olympiakos, doesn't have a buyout until 2013 and won't be here for at least one more year. Not having to pay him gives the Knicks additional room in free agency.
"Free agency is important to us this year," Grunwald said. "We'll hopefully make some strides in that area. With the 48th pick, if you look at the history of the success rate, it's not that great. We're happy with the pick we made and think ultimately he can contribute."
Last Friday, arbitrator Kenneth Dam ruled for the players union and granted "early Bird rights" to Lin and Novak. Dam's ruling was surprising because the collective-bargaining agreement states players can't be waived or sign as free agents and retain their Bird rights.
The NBA planned to appeal, but that process would have extended into free agency, so the two sides began settlement talks earlier in the week.
If in the settlement Lin and Novak have full "early Bird rights," the Knicks, who are over the salary cap, can pay them up to 104.5 percent of the average salary, or about $5.5 million. They also could spend the midlevel and lower-level exceptions on other free agents.
Without Bird rights, they likely would have to spend all of the $5-million midlevel exception to re-sign or match offers for Lin, a restricted free agent who can't receive more than the $5.2-million average salary from other teams.