The mid-level exception is the most common way for over-the-cap NBA teams to sign other teams' free agents. The exception can be used every season and can be split among multiple players, but different teams receive access to different mid-level exceptions based on their cap situations.
A team whose total player salaries, cap exceptions, and cap holds amount to less than the salary cap forfeits its full mid-level exception. A taxpaying team also doesn't have access to the full mid-level. However, both under-the-cap and taxpaying teams receive a lesser form of the MLE. Here's a breakdown of the restrictions placed on each of the three forms of the exception:
For teams with cap room:
- Called the mini mid-level, or the room exception
- Maximum two-year contract
- Maximum 4.5% annual raises
- First-year salary grows by 3% annually, beginning at $2.5MM in 2011/12.
For over-the cap teams:
- Called the full or standard mid-level exception
- Maximum four-year contract
- Maximum 4.5% annual raises
- First-year salary grows by 3% annually, beginning at $5MM in 2012/13.
- Once used, the team cannot surpass the "tax apron" ($4MM above tax line) for the remainder of the season.
For taxpaying teams:
- Called the mini mid-level, or the taxpayer mid-level exception
- Maximum three-year contract
- Maximum 4.5% annual raises
- First-year salary grows by 3% annually, beginning at $3MM in 2011/12.
In 2012/13, the room exception was worth $2,575,000, the full mid-level was worth $5,000,000, and the taxpayer mid-level was worth $3,090,000. However, those values are all set to increase by 3% for the '13/14 season. Here's the maximum contract a free agent could receive this summer using each of these three forms of mid-level exception:
Note: This is a Hoops Rumors Glossary entry. Our glossary posts will explain specific rules relating to trades, free agency, or other aspects of the NBA's Collective Bargaining Agreement. Larry Coon's Salary Cap FAQ was used in the creation of this post.
This post was initially published on April 24th, 2012.