Under the NBA’s previous Collective Bargaining Agreement, the values of various exceptions like the mid-level and bi-annual were established years in advance, but the league’s current CBA tweaked how those exceptions are calculated.
Rather than being determined ahead of time, the mid-level and bi-annual exceptions – along with several other cap-related figures and exceptions – are dependent on the movement of the salary cap from year to year. If the cap increases by 5% from one league year to the next, the exceptions increase by the same rate.
As such, we don’t know yet exactly what those exceptions will be worth in 2020/21, but we can make an educated estimate. The NBA’s most recent cap projections called for a $115MM cap for next season. That would be approximately a 5.4% increase on this year’s $109.14MM cap. If that projection holds, the values of the mid-level and bi-annual exceptions would increase by about 5.4% too.
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Based on a $115MM cap, here’s what the mid-level and bi-annual exceptions would look like in 2020/21:
Mid-Level Exception
| Year | Standard MLE |
Taxpayer MLE | Room MLE |
|---|---|---|---|
| 2020/21 | $9,755,000 | $6,025,000 | $5,023,000 |
| 2021/22 | $10,242,750 | $6,326,250 | $5,274,150 |
| 2022/23 | $10,730,500 | $6,627,500 | – |
| 2023/24 | $11,218,250 | – | – |
| Total | $41,946,500 | $18,978,750 | $10,297,150 |
The standard mid-level exception is available to over-the-cap teams that haven’t dipped below the cap to use room and don’t go over the tax apron. It can run for up to four years, with 5% annual raises. The majority of NBA teams are expected to have this exception available next season, since most will be over the cap but only a few will be in the tax.
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The taxpayer mid-level exception is for in-the-tax teams, or teams that want the flexibility to surpass the tax apron later. It can run for up to three years, with 5% annual raises.
The room exception is for teams that go under the cap and use their space. Once they’ve used all their cap room, they can use this version of the mid-level exception, which runs for up to two years with 5% annual raises.
Bi-Annual Exception
| Year | BAE Value |
|---|---|
| 2019/20 | $3,818,000 |
| 2020/21 | $4,008,900 |
| Total | $7,826,900 |
The bi-annual exception is only available to teams that are over the cap and under the tax apron. It can also only be used once every two years, which will disqualify the Mavericks, Pistons, Grizzlies, and Raptors from using it in 2020/21 — they all used their BAE in 2019/20.
So, to be counted as over the cap team, one must be over the cap before Free agency? Or you can get over the cap during July period and them become over the cap team and use the full MLE?
It’s a little complicated because cap holds can help push you over the cap once the new league year begins. For instance, if the cap is $110MM and you’re carrying $50MM in salaries, but you have $70MM in cap holds for free agents, your mid-level exception, trade exceptions, etc., you’re still considered an over-the-cap team and would have the full MLE.
But once you officially go under the cap at any time after the new league year begins (by renouncing cap holds or by simply not having enough salary + cap holds to surpass the cap line), you lose access to the full MLE (and BAE) and only get the room exception.
Thank you Luke! So did I get it right, you can be under the cap on July 1, go over the cap on say July 20 and sign a FA for the full MLE on July 21, then trade a player to get under the cap, essentially using the full MLE and beginning the season as an under the cap team? Or you cannot go under the cap after using a full MLE?
In theory, you could use the full MLE and then go under the cap later by shedding salary. But to do so, you’d have to be over the cap between the start of the year (July 1) and the time you used the MLE — if you were under at any point during that time, you’d lose it.