In the National Basketball Assocition, this is the first year of the right-of-first-refusal system for free agents.

And Ted Stepien, president of the Cleveland Cavaliers, refuses to give up his rights. No matter what anybody says.

Stepien already has gone on a spending spree. He has bought two free agents, Scott Wedman and James Edwards, at a combined estimated cost of $1.4 million per year; offered a third, Otis Birdsong, an estimated $1 million per year (only to lose him) and is trying to lure Chicago's Bobby Wilkerson. Such Wall Street-sized transactions have people talking.

"It's all right when a Red Auerbach or a Jerry Buss spends money for a free agent, but when Ted Stepien does it, from a nonplayoff team, then it's not all right," Stepien said, attacking his critics.

"We have had no choice but to pursue free agents. Last year, (former Cavs president Nick J.) Mileti got rid of five draft choices. Why did the other owners permit him to trade away five draft choices? Why didn't the other owners step in back then?" Stepien asked. Actually, Commissioner Lawrence O'Brien eventually did put restraints on the Cavalier dealing, but the damage had been done.

Obviously, Stepien -- about to enter his second season as president of the Cavaliers -- thinks Mileti left him a mess. Last year, the Cavs finished 28-54, 32 games behind Milwaukee and out of the playoffs in a league where 12 of the 23 teams qualify.

Stepien also resents the criticism of his daily pursuit of free agents this summer. So far, Stepien has landed Kansas City's Wedman and Indiana's Edwards, each for an estimated $700,000 per year.

He thought he had Kansas City's Birdsong, but lost him when the Kings matched Stepien's offer, then quickly traded Birdsong to the New Jersey Nets, who picked up the guard's contract. "I wasn't totally familiar with the third-party aspect of this system," Stepien said, adding that "losing Birdsong was a little bit of a surprise to us."

Indeed, this new right-of-first-refusal system has been somewhat of a surprise. The system works like this:

Veteran free agents were allowed to negotiate with other teams beginning May 15, the day after the NBA championship series ended. If a veteran receives an offer from a team other than his own that he wants to accept, he and that team must sign an "offer sheet" that lists the terms of their agreement, then forward a copy to the player's old team.

The old team has 15 days from the date it receives the offer sheet to decide if it wants to match it (this includes incentive clauses). The free agent may present his old team with only one offer sheet.

If the old team wants to match the offer within the 15 days, the player must accept that offer, as Steve Hawes accepted Atlanta's estimated $400,000. If the old team doesn't match the offer, the player will have entered into a binding contract with the new team.

A free agent may present his old team with an offer sheet any time, unless the team offered the player a one-year contract. On a one-year contract, the player has 165 days from May 15 to present an offer sheet, accept the one-year contract or agree to another contract with his old team.

Before this system, when a free agent got an offer from another team, the two teams tried to work out compensation. When compensation could not be agreed upon -- which was often the case -- the league commissioner determined the compensation. Since the commissioner's terms were often drastic, as in the Rick Barry and Marvin Webster decisions, teams hesitated to sign free agents.

Already, this new system has become divisive -- some like it, some don't.

"So far, it has been some kind of disaster," said Bob Ferry, general manager of the Washington Bullets. "The market value of the players has not been proportional to their abilities.

"I think," said Ferry, defining a stand taken by many, "the team that set this all off was Cleveland."

The Bullets have three free agents, Mitch Kupchak, Kevin Grevey and Bob Dandridge. Ferry says the Bullets will attempt to re-sign all three, but will wait to see other offers.

It is believed that Kupchak has been offered a long-term contract worth between $850,000 and $1 million a year by the Los Angeles Lakers. Kupchak, who has not yet turned in an offer sheet, has said he would like to stay with the Bullets.

"In basketball, you can't buy a championship," said Eddie Donovan, general manager of the New York Knicks, whose team includes free agents Mike Glenn and Ray Williams. "If you bought the whole East or West all-star team, you still might not win. You need players to complement each other, and usually you can't buy that."

The players and their representatives like the new system.

"Moneywise, it's good for the players and the team that gets them," said Birdsong, who received an estimated $1 million-per-year contract from the Nets. "I would have liked to stay in Kansas City. So would Scotty (Wedman). So would most every free agent like to. When you've played in a town and know the people there, you would like to stay."

Birdsong said he thinks a team should make every effort to retain a player, but that "a player has to look out for himself."

The Birdsong transaction has added a twist to the new system. After Birdsong negotiated an agreement with the Cavaliers, Kansas City matched it. Then the Kings traded Birdsong to New Jersey for Cliff Robinson and a second-round draft pick (44th overall).

Whether the Kings had any intention of actually re-signing Birdson is unimportant. That they averted losing Birdsong without compensation is of vast importance.

"The owners are just trying to get something in return for their losses," said Bob Woolf, a Boston-based agent, who represents Birdsong, among many others. "Nobody knew what to anticipate with the right of first refusal. The majority of the time, we had expected that the (old) team would either match the offer and sign the player or not match the offer and not sign the player. We really didn't expect this kind of trading."

"This (system) has had a very positive effect for the players," said Larry Fleisher, executive director of the NBA Players Association, "simply because their salaries have gone up. The owners have reacted hysterically. They have responded with moans and cries."

Stepien has responded with action. "The one aspect of this right-of-first-refusal system that is bad is that it pits one owner against another," he said. "People must realize that I'm trying to rebuild a franchise here."