Month: August 2021

The salary cap for the 2021/22 NBA league year has officially been set, with the league announcing that the cap will be $112,414,000, a 3% increase on last year’s number.

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 2021/22 increased by 3%, the values of the mid-level and bi-annual exceptions will increase by the same amount.

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 ($143MM) 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 2021/22 season, it will have access to this smaller mid-level exception for taxpaying teams.

If a team uses more than $5,890,000 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 three – the Nuggets, Lakers, and Bucks – used it in 2020/21, so they won’t have access to it in 2021/22. The league’s other 27 teams could theoretically use it this season.

Still, even if a team didn’t use its BAE in ’20/21, 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 for more information on the mid-level exception and the bi-annual exception.

Now that the NBA has set its salary cap for the 2021/22 league year at $112,414,000, we have a clear idea of what maximum-salary contracts will look like for the coming season. Conveniently, the cap increase came in at almost exactly 3%, which is precisely what the NBA had been forecasting all year, so our projections won’t change much.

Listed below are the maximum-salary contracts for players signing contracts that start in 2021/22. 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.

These figures will apply to a number of players who signed maximum-salary contract extensions that will go into effect in 2021/22: Giannis Antetokounmpo, Paul George, Damian Lillard, Bradley Beal, Jayson Tatum, Donovan Mitchell, Bam Adebayo, and De’Aaron Fox. They’ll also apply to anyone who signs a maximum-salary contract as a free agent this offseason — Kawhi Leonard is the most viable candidate.

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 Tatum, Mitchell, Adebayo, and Fox; the “7-9 years” column applies to free agents like Beal; and the “10+ years” column applies to the league’s most experienced vets or those who qualified for the super-max, including Antetokounmpo, George, and Lillard.

Here are the maximum salary figures for 2021/22:

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):

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 2022/23.

This group includes players like Stephen Curry and Jimmy Butler, who appear on track to sign extensions with the Warriors and Heat, respectively. It also includes players who will sign maximum-salary rookie scale extensions, such as Luka Doncic, Trae Young, and Shai Gilgeous-Alexander.

Even if they officially sign new deals sooner rather than later, the exact value of their next contracts will depend on where the cap lands for 2022/23. The NBA has announced that the cap for ’22/23 is projected to come in at $119MM, but there’s plenty of time for that estimate to fluctuate between now and next summer.

Photo courtesy of USA Today Sports Images.