K P 6 wrote:The Knicks not using the bi-annual exception shows more subtle financial sense
Another shrewd move from Scott Perry and Steve Mills to prep for 2019 free agency.
What I’m specifically getting at is that Pills has not used the bi-annual exception (BAE) to this point in the offseason, and with the roster almost at capacity after a mostly-tame first month of free agency, it seems like the Knicks will just sit on that exception and not use it this year.
Unlike the non-taxpayer mid-level exception (used to sign Mario Hezonja and Mitchell Robinson), the BAE does not expire, so to speak
The BAE allows a team to go over the salary cap (but not the luxury tax apron) to sign a player to a contract up to two years in length
This year, the exception is worth $3.382 million, and will be worth incrementally more or less depending on the salary cap any given year
Most importantly, a team cannot use the BAE two years in a row (the bi-annual part of the equation)
So what does this all mean? Well, basically, if Pills and the Knicks become big free agency players next year, the BAE would give them just a little bit of extra financial wiggle room after the big dominos fall. And make no mistake, they plan on being players in free agency next season.
So, by saving the BAE, the Knicks have given themselves the possibility of having two exceptions next offseason — the non-taxpayer mid-level exception (again, the roughly $8.5-million chunk of change that the team used to sign Hezonja and Robinson this summer, which is available annually to teams over the salary cap but under the luxury tax threshold), and the BAE, potentially giving the team another $12 million to use over the salary cap to sign supplementary players to put around Porzingis, Frank Ntilikina, Kevin Knox and [Max contract star(s) TBD].
We putting in work
As I suspected, the info in this P&T article is wrong.
Since we are projected to have cap room to sign a max free agent if all things fall as expected, WE WOULD NOT be eligible for the "Non-Taxpayer MLE"
Mid-Level Exception (or MLE): The value of the MLE increases from season to season, for up to four years maximum. A team may use the MLE as long as they have not used any cap-space to sign a player or complete a trade (e.g., as long as they have used matching salaries in all trades), and will not exceed the luxury tax apron (see below). If the team using the MLE had a hard cap above the tax apron, then that team's hard cap for the season is capped at the luxury tax apron, and cannot be raised beyond that until after the following season.
Instead, we'd be eligible for the smaller "Room Exception"
Room Exception: The value of the Room Exception varies from season to season; for up to 2 seasons. The room exception is for any team that has used cap space to absorb contracts via trade (e.g., has taken back more than 125% of what they sent out in salary) or to sign a free agent via cap room.
However, we would still qualify for use of the "Bi-Annual Exception"
Bi-Annual Exception (or BAE): The value of the Bi-Annual Exception varies from season to season, for up to 2 years maximum. The Bi-Annual Exception is for any team that is currently below and will remain below the luxury tax apron. (Thus, the team is hard-capped at and cannot exceed the apron). It cannot be used in consecutive years, but may be used as a pool of money used on multiple free agents. The BAE is not available to teams who have or will use the Room Exception or the TPE.