The National Basketball Association is facing a future that includes the elimination of compensation to a team losing a free agent to another team.

"I don't know what to expect," said Commissioner Larry O'Brien. "I think compensation worked well and now we're getting into an area we aren't familiar with."

The players and their agents see it as a boon, however.

"When I was a free agent two years ago, the compenstation thing scared everyone away," said Kevin Grevey of the Bullets. He finally signed a two-year contract with the Bullets, but that contract will expire at the end of this season and Grevey will be a free agent again. "I expect to get the offers this time," he said.

Veteran agent Bob Woolf says NBA players will now get exactly what they're worth. "I expect to see a lot of interest in every free agent," he said. "A team has nothing to lose and it is a quick, sure way to improve."

The compensation rule has been replaced by a right of first refusal. If a team offers a free agent a contract, it is called an offer sheet. The player signs it and presents it to his old team, which then has 15 days to respond. The old team can match the new offer and retain the player. If it doesn't match the offer, it loses the player without receiving any compensation.

A player is allowed to present only one offer sheet to his old team, so he can't keep getting new ones. A free agent has 165 days from the end of the championship series to give his club an offer sheet. If no offer sheet is presented and he cannot agree to terms with his old team, his old team can sign him to a one-year contract for the same amount the player received the previous season. He would then become a free agent again the following season, or he could sit out the year and be a free agent again next season.

The two most sought-after free agents, according to sources at the All-Star Game, are Washington's Mitch Kupchak and Kansas City's Otis Birdsong.

Kupchak reportedly will earn $122,000 this season. The New York Knicks and Seattle SusperSonics reportedly are very interested in him. The Knicks, according to league sources, will go as high as $50,000 a year for him, apparently far more than the Bullets will offer.

Birdsong also is on the Knicks' shopping list.

The Chicago Bulls, the team the Bullets are pursuing for the last playoff spot, will be though to catch, according to guard Reggie Theus. "We're already through with Philadelphia and we only have a couple of games left with Boston and Milwaukee, and we have a lot of home games remaining. We're 27-27 and 14 of those losses were to the 76ers, Celtics and Bucks. We're also playing better together and we have a lot of confidence."