Why the MLE Will Have Little to No Value Moving Forward

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Published: April 26, 2015

Last season we at Bourbon Street Shots had the First Annual MLE Tournament. There might not be a second. And it’s not because the Pelicans won’t have access to the MLE; In fact, after all our hard work they didn’t even use the MLE last year. This year, it is far more likely that the Pelicans go into the offseason as a cap team and the MLE will be pretty much the only way they could add a new player in free agency. But moving forward, starting this summer, the value of the MLE will plummet drastically.

One thing that we must address first is that the MLE is not tied to the salary cap. It will not go up drastically as the cap jumps over the next few years. Instead, it has already been previously negotiated and is set moving forward for the remainder of this current collective bargaining agreement. A team can use the MLE to give out a deal that goes up to four years in length with raises of up to 4.5% per year. This summer, you can use the MLE to give a guy a contract that starts at $5.464 million. That means that the max contract you can give a guy would be 4 years, $23.4 million. In year two, he would make 5.7 million; Year three, $6 million; Year four, $6.2 million. And those years are where the problem lies.

In the first year of his deal, the player would account for about 8.2% of the cap. But in year two, that would plummet down to about 6%, and in years 3 and 4, he would be making about 5% of the cap. Basically, in a few years, $6 million will be equivalent to what $3.5 million dollars is today. Good luck signing a quality, up and coming player to a deal that will be paying him about 5% of the cap in a few years. Agents know where the cap is going and they are not going to have guys locked into a deal that will leave their clients severely underpaid in years two and beyond.

This is the dilemma for any team that is depending on the MLE to get them a missing piece this summer. It could get you fringe starter or high level backup players in the past, but it likely won’t have the same pull this summer. Maybe guys will take one year deals, but a one year deal does not give you a player’s Bird Rights, and that makes him harder to retain if he plays well (see: Anthony Morrow). Maybe you can use it to rent a player, but the Pelicans seem more interested in collecting players that can be a part of the foundation moving forward. That will be hard to do with the MLE this summer.

How the Pelicans Can Utilize the MLE

Dante Cunningham. To me, it is that simple. Of all the rotation players that the Pelicans used this season, Dante Cunningham is the only guy that the Pelicans don’t have Bird Rights or Early Bird Rights for. In order to re-sign Cunningham, the Pelicans will either have to use cap space or an exception. Seeing that they won’t have cap space and the bi-annual exception likely won’t be enough, the MLE is the best chance the Pelicans have of keeping Dante. Now, the full mid-level exception would probably be too much for Cunningham, but a 3 year/$10 million dollar contract would mean they used about 60% of it.

Another option would be to split it up between two or three guys that are slightly better than minimum players and hope you strike gold like you did with Anthony Morrow two summers ago. Or, you can target a player who is probably worth $3-$4 million currently, overpaying him in the first year with the idea that you will be paying him proper value when the cap goes up. A guy like K.J. McDaniels fits this profile, or maybe Bismack Biyombo. But none of those guys help this team next year as much as Dante Cunningham, a guy who fits the culture Dell and Monty have been trying to install since day one.

This is the first season of the devaluation of the mid-level exception, and it will only get worse from here. But thankfully, the Pelicans already have a player in house that they can use it on and they will know exactly what they are getting.

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