Looking at the History of the Mid-Level Exception and How the Pelicans Might Use It

The most likely outcome this summer is that, one way or another, the Pelicans use the Mid-Level Exception to add a fairly significant piece to the puzzle. The question I had was: What kind of player can you usually get with the MLE, and is it wise (historically) to use this exception? In order to predict the future, I took a look to the recent past to see who has gotten the MLE over the last three years. Here were the findings:

[table id=60 /]

The interesting thing about the table is how few times a team gave the full MLE to a guy coming over from another team. Instead, teams often re-sign their own players using the MLE or just give a portion of the MLE to a free agent. We have five guys who have gotten the full MLE in the last three years, and four of them were perimeter scorers. The fifth, JJ Hickson, was a big man coming off a career season at the age of 24, but had a history of inconsistency and immaturity. Beyond that, you won’t see many big men with high production on this list.

Boris Diaw can play, but he seems like a bit of a system fit in San Antonio. Tyler Hansborough is a nice rotation player, but he doesn’t exactly move the needle. It looks like the value can be hard here on the perimeter, and that makes sense because if a big man has significant production and/or upside, he will get far more than the $5 million or so that you can offer with the MLE. The recent history of the MLE tells me that you can get one-dimensional wing players who are fantastic at that one dimension.

Jason Terry, Jamal Crawford, and Lou Williams were guys who could score in bunches coming off the bench. Matt Barnes and Kirk Hinrich were elite defenders. Marco Belinelli and Martell Webster are elite shooters, and Darren Collison and Jerryd Bayless are blurs in the open court who can also be pests on defense. And outside of Jason Terry, these guys all remained productive throughout the initial part of their contracts, and are major pieces in their teams’ rotation currently.

Splitting Up the MLE

The MLE doesn’t all have to go to one guy. It can be split between multiple free agents, including one of your own. This year, the MLE figures to be a little over $5.3 million, with the ability to give contracts up to 4 years in length, and a 4.5% raise in each of those years. So, the maximum a team can offer the player using the MLE is $22.8 million. Or, you can split that up and get some value. For instance, you could have split the MLE up and, based on the contracts they received, signed Marco Belinelli and Darren Collison last season.

The Pelicans might consider this route because it will be tricky trying to figure out a way to re-sign Anthony Morrow this offseason. The biannual exception ($1.9 million) likely won’t be enough, and if you use cap room to re-sign Morrow, then you don’t have the MLE in the first place. Re-signing Morrow might require using part of the MLE. Maybe you start him off at $2.5 million per year, and if you do, then you still have $2.8 million left to sign someone else. And why is $2.8 million a nice number? Because it allows you to outbid teams who only have the room level exception (like we did last year), which will be set at $2.7 million. And with the room exception, you can only offer up to two years, while you can offer up to four with the MLE.

The Pelicans are at a point where they need to fill in the gaps around their care with solid role players, and they already know what they got in Anthony Morrow. The Spurs, for example, historically use exceptions to take care of their own. What would be more valuable – resigning Morrow and adding someone like CJ Miles or letting Morrow go to use the full MLE on someone like Marvin Williams? Another advantage to only using part of the MLE is that it gives you an advantage in resigning free agents in late February/early March when teams start buying out players. If you use the full MLE and the biannual, you can only offer a pro-rated amount of the league minimum. But if you still have some of your MLE left, you can use a pro-rated portion of that.

For example, the Pacers only used part of their MLE to sign Chris Copeland last summer, so they used a remaining portion of their MLE to outbid other interested teams when Andrew Bynum was released. If Dell has a chance at getting somebody who is an ideal fit (Ariza? PJ Tucker?) that can give him high level play for 30+ minutes, then it might be worth losing Morrow. But don’t be surprised if he splits the MLE up if he can’t get his top targets.

Manipulating the System

The key to this entire offseason might be Al-Farouq Aminu. No really, I’m serious. You see, the NBA CBA is full of all kinds of loopholes just begging to be manipulated to give a team numerous options that might not be there at first glance. First, let’s start with the MLE itself. You don’t necessarily need to be over the cap to use it. All you need is to have less cap room than what you can offer using the MLE. Again, the MLE is $5.3 million this year, so let’s say you have $3 million in cap room. You would have two choices.

1. Sign a guy for up to $3 million using the cap room and also have the room exception to use after that (again, about $2.7 million)


2. Use the MLE (5.3 mil) and the biannual ($1.9 million)

Obviously, a team would benefit by using #2 in most cases, unless the guys they were targeting wanted contracts starting at 3 million and 2.7 million, because the team would not be able to do that in scenario #2. But, in most cases, scenario #2 provides the most value because it allows teams to offer up to $7.2 million in salary, as opposed to $5.7 million.

So, how does this all tie back to Aminu? Well, first let’s revisit where the Pelicans are at with regard to the cap. After they pick up the likely options (Withey and Babbitt), they will have about $6 million in cap room if the salary cap does increase to its expected amount. But they only have that cap room if they renounce every free agent, and that just wouldn’t make much sense unless they are trying to outbid another team with the MLE and need that extra couple hundred grand to do it.

Instead, they will likely keep the cap holds of Aminu and Smith on the books, allowing them to use the MLE and the biannual exception. What they can also do is sign-and-trade one (or both) of those guys and get a trade exception to add to their bevy of exceptions that they can use to acquire players this summer. So, if Aminu gets some interest from another team, the Pelicans can sign and trade Aminu to the interested team and replace his cap hold with a trade exception.

This would allow the Pelicans to still be able to use the MLE while also being able to absorb a player in a trade without sending anything away. For example, let’s say the Bobcats are interested in signing Aminu this year. Now, if they get him in a sign and trade, they can give him 7.5% salary increases each year since he is a Bird Rights’ free agent for the Pelicans. Let’s imagine that the Bobcats give him 3.5 million in his first year. In that case, the Pelicans would get a $3.5 million trade exception.

Now, they would have: The full MLE, Bird Rights to Jason Smith, the biannual, and a $3.5 million trade exception to fill out the roster. They can take that trade exception and go fins a guy on another roster making $3.5 million or less. For example, let’s say the Grizzlies are willing to move Kosta Koufos. You can fit his $3 million dollar contract into the trade exception (and maybe send them the draft rights to Pierre Jackson) and it doesn’t effect your ability to use the MLE.

So now you can still sign Jason Smith using his Bird Rights, get a rotation player with the biannual (or re-sign Morrow), and then still have the entire MLE to sign a player or multiple players. Honestly, I can do this for days. Does Dell have as much flexibility as he did last season? Certainly not, but he has enough room and enough small assets and exceptions to make things happen if he sees players that can help out. And as the recent history of the MLE shows us, you can get some nice pieces if you target the right players.


9 responses to “Looking at the History of the Mid-Level Exception and How the Pelicans Might Use It”

  1. Great work. People get mystified by moves by Mickey Loomis for how the Saints can get good players with no cap space. It appears that Dell is another magician with the CBA and clever accounting to get players with what little they have.

  2. I hope the Grizzlies sign Paul Gasol.  This would be very interesting to see the Gasol brothers play together but would also make Koufos expendable, thus helping McNamara’s dream.

  3. Wow. So many possibilities.
    Let’s say everything happens as it says in the article: we take on Koufos using an exception, re-sign Morrow using the bi-annual, re-sign Smith using Bird Rights, and then use the full MLE on PJ Tucker while picking up the options on Withey and Babbitt. That would give us a very, very nice set of role players. Anderson, Gordon, Rivers, Morrow and Smith/Ajinca/Withey off the bench with Holiday, Evans, Tucker, Davis, and Koufos starting is a much more talented lineup than a lot of the playoff teams we are all watching right now. If they can figure out how to play together it’s a wrap!!

  4. Thanks Michael for such a great update.  We are all so lucky to have someone so dedicated to educating the fan base.

  5. list of some interesting guys who could be targets with mle?

    how about battier, paul pierce, jordan hill, granger, chris kaveman, hawes, evan turner, mr kardashian (humphries), mr. kardashian (odom), marion, dejuan blair, j. crowder, vince, sefalosha, caron butler, b rush, okafor, earl clark, shaun livingston, kenyon martin, or the low risk castoff group:  bynum, beasley, oden??? or of course gustavooooo?  

    anyone move the needle?  I like jae crowders future prospects but I bet mark cuban does to, kind of hard to outbid that guy. how about bringing okafor and ariza back?!!?! actually if he has anything left in the tank (and I’m skeptical of that), I think emeka makes a very complementary 3rd big to ad & ryan if he could be had dirt cheap.

    would love to use sign and trade to pry gortat away, bumping us int mle zone, but recognize that is very unlikely

Leave a Reply

Your email address will not be published.