Explaining the NBA's Mid-Level Exception

By virtue of having a soft salary cap, the NBA has given teams a variety of creative ways to re-sign their own players and field a competitive team without running afoul of the CBA. The mid-level exception (MLE) is a popular tool in this regard, as it allows teams over the cap to keep spending money on players-- but the MLE's annual value changes based on whether or not a team is above the NBA's luxury tax threshold.

What Is The Non-Tax Mid-Level Exception?

The "full" mid-level is the largest, and is only available to teams that aren't paying the NBA's luxury tax. It is estimated to be set at $9.246 million for the 2019-20 season. This exception may be split and given to multiple players. It can be used for contracts up to four years in length, with raises up to 5% per year after the first season. That means a full MLE contract could ultimately end up creating a contract worth just under $40 million over the full four years.

What Is The Taxpayer's Mid-Level Exception?

The tax mid-level is estimated to be set at $5.711 million for the 2019-20 season, and is available to teams over the luxury tax apron. The annual increase in salary under these terms is capped at 4.5%, and the deal can also be split up into multiple players, but deals can only be set at a maximum of three seasons, placing its max value at just under $19 million.

What Is the Room Exception?

If a team is under the cap enough to where they lose out on any of the other three exceptions, they qualify for the room exception -- cap room, that is -- which is currently set at $4.76 million for the 2019-20 season.The 4.5% annual raise stays, and deals can only be signed for up to two years. This deal can be split between players.

Just because your team is over the cap doesn't mean that they can't think outside the box to reign in top talent.