NBA stars are breaking the bank this offseason.
Whether it’s $270 million for Scottie Barnes, $212 million for O.G. Anunoby or $166 million for Bam Adebayo, players know their worth and are taking advantage of the NBA’s increased salary cap.
Teams aren’t built entirely through big names, however. When it comes to the difference between a playoff team and a championship team, it’s about the finer details. Spending money to extend a star is often an obvious choice, but where to spend a few million on a role player isn’t always as easy.
The mid-level exception could allow some NBA contenders to bolster their roster in free agency, with Klay Thompson among the players who could be pursued by teams with an MLE.
Here’s what you need to know about the mid-level exception and how teams can use it.
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What is the MLE?
The mid-level exception allows teams to sign a player even if they are over the cap. For contenders with plenty of money tied up in stars, the mid-level exception can be key to filling out the roster with a quality role player without entering dangerous luxury tax territory.
There are limits as to which teams can get a mid-level exception, as teams in the second luxury tax apron are not eligible. Teams under the salary cap, teams above the cap but below the first apron and teams in the first apron are all able to use different variations of the MLE.
What kind of MLEs are there?
- Taxpayer mid-level exception
- Non-taxpayer mid-level exception
- Room exception
The taxpayer mid-level exception belongs to teams who are above the salary cap and in the first luxury tax apron. Teams above the second apron do not have a mid-level exception.
The non-taxpayer mid-level exception belongs to teams who are over the salary cap but not in the first luxury tax apron. Because the purpose of the mid-level exception is to give teams with little or no cap space some spending flexibility in free agency, the non-taxpayer exception is worth more than both the taxpayer and room exceptions. This season, it can also be used for players acquired via trade or waiver claim as long as the incoming salary fits within the exception.
A room exception applies to teams who are under the salary cap. This season, it can also be used for players acquired via trade or waiver claim as long as the incoming salary fits within the exception.
How much is the MLE worth?
The NBA revealed the salary cap for the 2024-25 season just ahead of the start of free agency, also unveiling the MLE values for the coming season.
- Non-taxpayer mid-level exception: $12,822,000
- Taxpayer mid-level exception: $5,168,000
- Room exception: $7,983,000
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How do NBA teams get an MLE?
All teams are granted a mid-level exception unless they are in the second luxury tax apron. That applied to the Bucks, Warriors, Heat, Suns and Clippers during the 2023-24 season.
The type of MLE each team receives simply depends on its status in relation to the salary cap and the first luxury tax apron. Teams also might not have an MLE available if they previously used it to sign a player to a multi-year contract. For example, a room exception can be used for contracts as long as three years, while non-taxpayer exemptions can be used for deals spanning as many as two years.
The MLE will likely come into play for some contenders this offseason. Reports indicate LeBron James may sign a new deal with the Lakers that allows the franchise to use the non-taxpayer mid-level exception, which could be critical if Klay Thompson is a target for Los Angeles.