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Mini Mid-Level Exception

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Ray Allen Breaks Reggie Miller's Record

The Miami Heat reportedly hope to sign Ray Allen to a mini mid-level contract.

Getty Images / Elsa
Definition: The NBA's owners sought to eliminate salary cap exceptions during the lockout of 2011, thinking - accurately - that allowing capped-out big money teams to offer contracts starting at $5 million via the mid-level exception was causing payrolls to escalate league wide.

The NBPA, on the other hand, was dead-set against losing those exceptions. And for exactly the same reason. Without the mid-level exception, veteran players would have a lot fewer options in free agency, and would be forced to play for the league minimum far more often.

In the final agreement that ended the lockout, the warring sides split the difference. The mid-level exception still exists, but there are serious restrictions on its use.

Here's a quick primer:

  • Only teams with payrolls above the salary cap can use the mid-level exception. (If you have room under the cap, you don't need exceptions, after all.)
  • Teams above the luxury tax threshold can use the full mid-level exception, but doing so places a hard cap on their salaries for that year. With that hard cap in effect, the team would be prohibited from signing any player for any reason... no veteran minimum deals, no ten-day contracts for injury replacements, nothing.
Obviously, most general managers won't be willing to do that. So under the new CBA, the mid-level really isn't an option for teams over the luxury tax limit. But they do have another option.

A new salary cap exception was created in the 2011 CBA, which is available to the higher-payroll teams. The mini mid-level exception - also referred to as the "taxpayer exception" - allows those teams to offer free agent contracts that aren't quite as lucrative as those offered under the full mid-level. For the 2012-13 season, full mid-level contracts will start at about $5 million, while mini mid-level deals will start at $3 million.

The Mini Mid-Level and the Free Agent Class of 2012

The mini mid-level will be a very important tool in the summer of 2012, as several high-profile teams - including the Heat, Knicks, Lakers and Celtics - may be looking to bring in veteran talent using the mini mid-level exception.
Examples:
According to a number of reports, the capped-out Miami Heat hope to sign veteran shooting guard Ray Allen to a $3 million deal using the mini mid-level exception.

The Knicks would like to make a run at Steve Nash, but won't be able to offer more than the $3 million mini mid-level exception.

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