Mid-Level Exception

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 situation.

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 $2.5MM first-year salary
  • Maximum 4.5% annual raises
  • First-year salary grows by 3% annually

For over-the cap teams:

  • Called the full or standard mid-level exception
  • Maximum four-year contract
  • Maximum $5MM first-year salary
  • Maximum 4.5% annual raises
  • First-year salary grows by 3% annually starting in 2013/14

For taxpaying teams:

  • Called the mini mid-level, or the taxpayer mid-level exception
  • Maximum three-year contract
  • Maximum $3MM first-year salary
  • Maximum 4.5% annual raises
  • First-year salary grows by 3% annually

For a practical example of how the restrictions on the mid-level exception work, let's say the Heat and Knicks were competing for a free agent this coming summer. The Heat have $76MM+ on their books for 2012/13, making them a taxpayer, while the Knicks have $60MM+, putting them over the cap but not over the tax threshold. If both teams offered the full MLE, the player would receive an offer of four years and $21.35MM from the Knicks, or three years and about $9.69MM from the Heat.

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.

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