Mid-Level, Room, Bi-Annual Exceptions Will Have New Uses This Offseason

Prior to the 2024 offseason, NBA teams had only been permitted to use the non-taxpayer mid-level exception, room exception, and bi-annual exception to sign free agents or to promote two-way players to standard contracts. Those exceptions could be split among multiple players, but they couldn’t be used for any other purpose besides giving a free agent – or a player being promoted from a two-way deal – a contract.

That will change this summer, as we previously detailed in our glossary entries on the mid-level and bi-annual exceptions. Beginning in July, teams with access to one or more of those exceptions will be permitted to use them to acquire players via trade or waiver claim. Simply using them to sign free agents will still be allowed, but the exceptions will expand to offer clubs more flexibility going forward.

A team using one of these exceptions to trade for a player won’t have to send out any matching salary, but will have to ensure that the incoming player’s contract fits into the exception, both in terms of his current salary and the number of years remaining on his contract.

For instance, the bi-annual exception projects to be worth $4,681,000 in 2024/25, with a maximum length of two years. That means it could be used to trade for a player like Heat forward Nikola Jovic, who will earn $2.46MM next season and $4.45MM in ’25/26. But it couldn’t be used to acquire Trayce Jackson-Davis — the Warriors big man won’t have a cap hit higher than $2.4MM on his current deal, but he’s under contract for three more seasons, exceeding the two-year BAE limit.

Because only the player’s current-year salary must fit within the exception’s limits, a player like Bulls wing Dalen Terry – who will earn $3.51MM in ’24/25 – could be acquired using the bi-annual exception this July, even though his $5.4MM salary for ’25/26 exceeds what a team using the BAE could pay a free agent signee in his second season.

Based on the NBA’s projection of a $141MM salary cap for 2024/25, the non-taxpayer mid-level exception, which can run for up to four years, will be worth $12,859,000. The three-year room exception projects to start at $8,006,000.

Crucially, these new rules will not apply to the taxpayer mid-level exception. That two-year form of the mid-level, which projects to start at $5,183,000 in ’24/25, will still only be usable for free agent signings.

Finally, it’s worth noting that a team that uses either the non-taxpayer mid-level exception or bi-annual exception to accommodate a trade or waiver claim will be hard-capped for that season at the first tax apron, so it won’t be an option for teams that plan to surpass that apron.