Further reading:
Quickly explain the NBA's Bird Right. The four key points of the Bird Clause are analyzed at once.
A 3-minute analysis of the NBA’s two-way contract FAQs
What is the NBA’s 38-year-old clause? Why is it called the LeBron James clause?
What is the NBA veteran's minimum salary contract? Understand the conditions and rules once
What is the NBA luxury tax/luxury tax? How to calculate?
Table of Contents
What is the middle class exception (Mid-Level Exception)?
The special case of the middle class is that the NBA is designed for average-price players, and teams can give any player a contract equal to the average NBA salary. The calculation method is to divide the total player salary of the previous season by 375 (30 teams, an average of 12.5 players per team). The calculated result is multiplied by 1.08, which is the mid-level contract salary.
Each team will get a mid-level exception every year, and the mid-level contract can last up to 6 years. And the middle-class contract can be used every year, which means that if you sign a player with a mid-class contract in the first season, you can still use the middle-class contract to sign other players in the second season.
Classification of middle class exceptions
If the team exceeds the salary cap, it will not be able to sign free agents according to the collective bargaining agreement. However, the NBA has formulated some special contracts to allow the team to have room to operate, including the Bi-Annual Exception (BAE) and the minimum salary. Exceptions and rookie exceptions allow teams to exceed the salary cap and still sign free agents, and the Mid-Level Exception (MLE) is included here.
Middle class contracts are divided into full middle class and mini middle class depending on whether the team has exceeded the luxury tax.
Full middle-class contract
The full mid-level contract is applicable to teams whose total salary has not exceeded the luxury tax. After using the full mid-level contract, the salary for the entire season cannot exceed the luxury tax.
Therefore, the average team is unlikely to use the full mid-level team, because if they use the salary cap, they will be locked in. Mid-season trades or signings may affect subsequent reinforcements.
The maximum full middle-class contract is 4 years, and the maximum annual increase is 5%.
Mini middle class contract
The mini mid-level contract is a special regulation in the mid-level exception. It is applicable to teams whose total salary exceeds the luxury tax. It can be used once every other year after use.
The upper limit of the mini-middle-class contract is 3 years, and the maximum annual increase is 3%. But if the team has a sign-and-trade player, the team cannot use the mini-mid-level contract during that season.
According to the latest version of the collective bargaining agreement in 2023, teams that exceed the luxury tax threshold of $17.5 million will not be able to obtain the mini-middle class exception, and will not use cash in transactions, and will not be able to trade first-round picks after seven years, as well as Grabbing people in the buyout market.
Space middle class contract
When a team's payroll is below the salary cap, it can use the mid-level exception. Of course, you have salary space and can directly sign free agents. In fact, you don't really need to worry about whether it is a mid-level contract.
