Jeremy Lin in action against the Utah Jazz. (Feb. 6,...

Jeremy Lin in action against the Utah Jazz. (Feb. 6, 2012) Credit: Jim McIsaac

The Knicks scored a major offseason win Friday that could lead to many more victories next season.

In a surprise decision, arbitrator Kenneth Dam ruled that Jeremy Lin and Steve Novak will retain their "early Bird" rights when they become free agents July 1.

That means the Knicks will be able to re-sign both players without using their midlevel or lower-level exceptions. That money could be used to sign other free agents. The Knicks need backcourt help and could pursue veteran point guards Steve Nash, Jason Kidd, Andre Miller and Raymond Felton and shooting guard Ray Allen.

The NBA, however, is appealing the decision, which also granted Clippers guard Chauncey Billups and Blazers forward J.J. Hickson their "Bird" rights, which allows teams to go over the cap to re-sign such free agents.

The appeal has to be ruled upon quickly with free agency a little more than a week away.

The collective-bargaining agreement states that for a player to have "Bird" or "early Bird" rights, he can't be waived or sign with another team. Lin, Novak, Billups and Hickson were waived last season and ultimately signed with other teams, which is why the league is appealing. NBA commissioner David Stern had said he expected the arbitrator to rule for the league.

The players' union argued that a player should not be penalized by losing his Bird service time when he's picked up on waivers. Dam agreed, ruling that players claimed off waivers have the same "Bird" rights that they would have if they were traded.

"Can't tell you how great it feels to have my Bird Rights preserved!" Novak said on his Twitter page. "A lot of work was put into making it happen."

The Knicks had no comment.

For Lin and Novak, having "early Bird rights" affords the Knicks the ability to re-sign both players for up to 120 percent of the average salary, about $5.5 million, and still have the flexibility to sign other free agents.

Both are expected to be in demand in free agency, although Lin is a restricted free agent. The Knicks likely would match all offers for Lin.

If the NBA were to win its appeal, the Knicks likely would have to use most or all of the $5-million midlevel exception to keep Lin. The most he could get on the open market is the average salary. The Knicks would be able to match that with the midlevel. But the $1.9-million lower-level exception might not be enough to re-sign Novak or add players such as Nash, Kidd or Allen.

The Knicks also are waiting for another important decision to be made. Backup guard J.R. Smith has until Tuesday to pick up his $2.44-million option for next season. If Smith doesn't pick it up, the Knicks can sign him for roughly $2.9 million next season and wouldn't have to use any of their exceptions.

Nash and Kidd both expressed some interest this week in playing for the Knicks.

The Dolan family owns

controlling interests in the Knicks, MSG and Cablevision. Cablevision owns Newsday.

Newsday LogoCovering LI news as it happensDigital AccessOnly 25¢for 5 months