Danny Ferry held all the cards. He held Varejao's rights as a restricted free agent, he reserved the right to match any offer another team would make, and he was dealing with a player who had a very limited market for his services. No other team was coming out of the woodwork to pay him the kind of money he was seeking -- or any money for that matter, since it was common knowledge that the Cavs would match any reasonable offer.
Still, news reports said Varejao was stubbornly hunkered down on a contract demand somewhere in the $9-10 million per year range. Varejao later refuted those published claims, but whatever he was demanding, Ferry wasn't biting, and the standoff continued into the season.
Public favor largely rested with Cavs management during the entire fiasco. Ferry was attempting to avoid another crippling contract by refusing to shell out too much money for a role player -- in this case, a player high on energy but short on skill, a player many fans and media members deemed replaceable.
It was Varejao who was being unreasonable, we said. He was the one listening to his shark agent, the one overestimating his market value, the one who was apparently too proud to admit he made a miscalculation.
Harsh words followed. Varejao accused Ferry of breaching protocol by making a clandestine trip to see Varejao in Brazil before the start of the season. Ferry said he made the trip because he had been stonewalled from communicating with his player. Varejao countered by saying the Cavs didn't deal in good faith, and that he didn't want to play here anymore.
By the time the Bobcats gave Varejao the out he was looking for, signing him to an offer sheet that would finally force the Cavs to match and break the stalemate, it was already December and damage had been done to the season.
The Cavs were plodding along at that point, reeling from the results of a six-game losing streak that coincided with LeBron James in street clothes attempting to nurse a sprained finger back to health. They were below .500 for the first extended period since LeBron's rookie season of 2003-04, when they finished 35-47.
Then, on Dec. 11, LeBron, Varejao and Larry Hughes all returned in a 118-105 win over the Pacers, and the team's fortunes turned upward.
Since the return of Varejao from his extended offseason, the Cavs are 10-6, including a 5-1 record in January. It's not a coincidence or merely the psychological effect of the team being made whole again. Varejao has had a very real impact on the win-loss column for the Cavs since returning, and it's becoming apparent that the next time the two sides visit the contract negotiating table, Varejao will be in the driver's seat.
His basic stat line reads like a very good bench player's should: 8 points, 8.7 rebounds and half a blocked shot in about 28 minutes per game. But that's only the tip of the iceberg.
The real story of Varejao's return with a vengeance is that 48 of his 139 rebounds this season are offensive; that he's shooting 50 percent from the floor and not all of his made shots are tip-ins or putbacks.
Mike Brown is starting to draw plays that call for LeBron to find Varejao cutting to the basket. The man with hands I once believed were the worst in the NBA is actually a more sure-handed receiver for LeBron's fastballs than teammate Drew Gooden, whose hands should be scarred from all the LeBron passes that have smacked off them and out of bounds.
The real story is that Varejao, since returning, has become the most dynamic, well-rounded big man on the roster, capable of rebounding, playing a little defense, and deceptively using an improving offensive game that not a lot of people know about yet.
If you're a Cavs fan, you want the rest of the country's image of Varejao to come from Game 3 of the NBA Finals, when he foolishly tried to force an errant layup with time winding down, instead of passing back out to LeBron. You want all the other teams to believe that the player they should really be worried about is Gooden.
It makes Varejao's job a lot easier when you write him off as a gangly, uncoordinated pup with no real skills. It allows him to mask his growing basketball intelligence, his knowledge of how to plant his feet just so, take a charge in the sternum and fall over so that the refs toot their whistles in spite of the NBA's anti-flopping crackdown.
It allows him to mask his ability to gain position on opposing players in the rebounding trenches, then relentlessly swipe at the ball with a series of deflections aimed at preventing the other would-be rebounders from getting both their hands securely on the ball.
Like the distorted post-impressionist works of Vincent Van Gogh, Varejao's thrashing, flailing and flopping might look like the brushstrokes of a madman to some, or at least the scrawlings of an amateur. But it might actually be genius unrealized in its own time.
Varejao has always had a unique skill set as a basketball player. It's far from perfected, but even as it stands now, it's a skill set that helps the Cavs win ballgames. It's a skill set that was sorely missed by the Cavs for the month-plus that Varejao sat in Brazil.
Varejao is the glue that holds Mike Brown's bench together. With him, it's a serviceable unit. Without him, it's pretty much dead weight, even with the sharpshooting of Daniel Gibson available.
When -- or hopefully before -- Varejao becomes an unrestricted free agent the summer after next, Ferry would be wise to realize what he has in Varejao, and be ready to pay him as such.
While Ferry was right to not overpay this time and load another cumbersome contract onto the Cavs' collective back, Varejao's unrestricted free agency will be a different story. Not only will Varejao demand a huge raise, by that point in time, there might be teams out there willing to give him the money he wants.
If the first month-plus of Varejao's return to the Cavs is any indication, Varejao is developing into a star, someone the Cavs cannot afford to part with in the years leading up to LeBron's own unrestricted free agency, when it will be critical to show him that he can be a long-term title contender in his home state.
Hopefully, the coming year and a half will allow time for Ferry and Varejao to rebuild any bridges that were burned during the recent contract fiasco. Otherwise the Cavs and Cleveland fans might find out the hard way that Varejao isn't as replaceable as we once believed.