Salary Cap

The salary cap for the 2020/21 NBA league year has officially been set, with the league announcing that the cap will be $109,140,000 — the same as it was in ’19/20.

Under the league’s current Collective Bargaining Agreement, the values of the mid-level, room, and bi-annual exceptions are tied to the percentage that the salary cap shifts in a given year. Because the cap figure for 2020/21 doesn’t represent an increase or decrease, the values of the mid-level and bi-annual exceptions won’t increase or decrease either.

Listed below are the maximum annual and total values of each of these exceptions, along with a brief explanation of how they work and which teams will have access to them.

Mid-Level Exception (Non-Taxpayer):

The non-taxpayer mid-level exception is the primary tool available for over-the-cap teams to add free agents. As long as a team hasn’t dipped below the cap to use cap space and doesn’t go over the tax apron ($138,928,000) at all, it can use this MLE, which runs for up to four years with 5% annual raises.

Mid-Level Exception (Taxpayer):

If an over-the-cap team currently projects to be a taxpayer, or expects to move into tax territory later in the 2020/21 season, it will have access to this smaller mid-level exception for taxpaying teams.

If a team uses more than $5,718,000 of its mid-level exception, it is forbidden from surpassing the tax apron at any time during the league year. So even if a team isn’t above the apron when it uses its MLE, it might make sense to play it safe by avoiding using the full MLE and imposing a hard cap.

The taxpayer MLE can be used to sign a player for up to three years, with 5% annual raises.

Room Exception:

Although this is also a mid-level exception of sorts, it’s colloquially known as the “room” exception, since it’s only available to teams that go below the cap and use their cap room.

If a club goes under the cap, it loses its full mid-level exception, but gets this smaller room exception, which allows the team to go over the cap to sign a player once the team has used up all its cap space. It can be used to sign players for up to two years, with a 5% raise for the second season.

Bi-Annual Exception:

The bi-annual exception, as its name suggests, is only available to teams once every two years. Of the NBA’s 30 clubs, only four – the Mavericks, Grizzlies, Pistons, and Raptors – used it in 2019/20, so they won’t have access to it in 2020/21. The league’s other 26 teams could theoretically use it this season.

Still, even if a team didn’t use its BAE in ’19/20, that club doesn’t necessarily have access to it for the coming year. As is the case with the non-taxpayer MLE, this exception disappears once a team goes under the cap. It’s also not available to teams over the tax apron — using the BAE creates a hard cap at the apron.

The BAE can be used to sign players for up to two years, with a 5% raise after year one.

Note: Be sure to check out our Hoops Rumors Glossary installments for more information on the mid-level exception and the bi-annual exception.

Now that the NBA has set its salary cap for the 2020/21 league year at $109,140,000, we have a clear idea of what maximum-salary contracts will look like for the coming season. Conveniently, with the cap unchanged from 2019/20, this year’s max deals will look a whole lot like last year’s.

We’ll likely soon be able to apply these numbers to contracts for free agents Anthony Davis and Brandon Ingram. They’re also relevant for players who signed maximum-salary extensions in 2019 that will go into effect in ’20/21, such as Jamal Murray.

Listed below are the maximum-salary contracts for players signing contracts that start in 2020/21. The first chart shows the maximum salaries for a player re-signing with his own team — a player’s previous team can offer five years instead of four, and 8% annual raises instead of 5% raises. The second chart shows the maximum salaries for a player signing with a new team.

A player’s maximum salary is generally determined by his years of NBA experience, so there’s a wide gap between potential earnings for younger and older players. In the charts below, the “6 years or less” column details the maximum contracts for players like Ingram and Murray; the “7-9 years” column applies to free agents like Davis; and the “10+ years” column applies to the league’s most experienced vets, none of whom are particularly strong candidates for max deals this fall.

Here are the maximum salary figures for 2020/21:

A player re-signing with his own team (8% annual raises, up to five years):

A player signing with a new team (5% annual raises, up to four years):

There’s also one last category of maximum salary worth outlining for 2020/21. Sixers guard/forward Ben Simmons and Raptors forward Pascal Siakam both signed rookie scale extensions last year that would have been worth the maximum allowable starting salary for players with their experience level (25% of the cap).

However, because Rose Rule language was written into each player’s contract, and both Simmons and Siakam made All-NBA teams in 2020, they’ll be eligible for a slightly higher starting salary worth 28% of the cap. It’s a sort of pseudo-max, since the two stars could technically have received up to 30% of the cap in 2020/21 if they’d made the All-NBA First Team.

Here’s what Simmons’ five-year deal and Siakam’s four-year pact will look like:

Finally, it’s worth noting that none of the maximum-salary figures listed above will apply to extension-eligible players whose new contracts would start in 2021/22.

This group includes players like Giannis Antetokounmpo, who is eligible for a super-max extension with the Bucks. It also includes veterans who have already signed maximum-salary extensions, like Damian Lillard with the Trail Blazers, and players who could sign rookie scale extensions in the coming weeks, such as Celtics forward Jayson Tatum and Kings guard De’Aaron Fox.

Even if they sign new deals sooner rather than later, the exact value of their next contracts will depend on where the cap lands for ’21/22. The NBA has announced that the cap for next year could increase anywhere from 3-10% on this season’s figure, so there’s still a wide range of possible values for those future deals.

Photo courtesy of USA Today Sports Images.