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NBA Lockout Deal: Restrictions On Mid-Level Exception Explained

One of the biggest issues holding up an NBA lockout deal over the past few weeks was whether teams over the luxury tax threshold would be able to use the full mid-level exception to sign free agents and round out their rosters. Zach Lowe of reports that a compromise was reached, leading to the deal agreed to early Saturday morning.

Under the compromise, teams over the salary cap can use the full mid-level exception -- worth a starting salary of $5 million and a maximum term of four years -- so long as it does not take the team more than $4 million above the luxury tax threshold (which is roughly 20 percent higher than the salary cap). If the mid-level would take the team over the tax line,, the team will not be allowed to re-sign its own free agents using Bird rights.

That will force high-payroll teams knocking on the tax threshold's door to make tough decisions when in the past they could just sign everybody and sort it out later. The team this will most obviously effect immediate is the Dallas Mavericks, who have to sign Tyson Chandler and J.J. Barea, but in doing so will have to use the mini mid-level (starting salary of $3 million, maximum length of three years) instead of the full version.