It has been widely documented that few teams will have cap space in the 2022 NBA offseason. There are only six teams that can reasonably have cap space without making any major trades (Pistons, Magic, Spurs, Pacers, Grizzlies, and Trailblazers), and three of those teams (Pacers, Grizzlies, and Trailblazers) are probably just as likely, if not more likely, to actually retain most of their own free agents and operate over the cap. 

Therefore, rather than using cap space to sign free agents, most teams will have either the $6.3 million Taxpayer Mid-Level Exception (Taxpayer MLE), or the $10.3 million Non-Taxpayer MLE (Full MLE) and the $4 million Bi-Annual Exception (BAE).

Teams that use either the full MLE or the BAE are hard-capped at the apron (approximately $154.2 million), so it’s teams that are projected to have salaries above the apron that are limited to the Taxpayer MLE.

Using some rough estimation, there are likely 11 teams that will be limited to the Taxpayer MLE (Hawks, Celtics, Nets, Mavs, Nuggets, Warriors, Clippers, Lakers, Bucks, Suns, and Jazz), 7 teams that will likely have the full MLE (Rockets, Timberwolves, Knicks, Thunder, Kings, Raptors, and Wizards), and 6 teams that could go either way depending on what happens with some of their own free agents or if they make some small trades (Hornets, Bulls, Cavs, Heat, Pelicans, 76ers).

With so few teams with cap space, the majority of the 2022 free agents will be fighting over getting all or a portion of team’s MLE (and BAE, to a lesser extent). That money could dry up quickly. However, it will dry up less quickly if players re-sign with their current teams, as that will free up more MLE money.

The best team to explain how players re-signing with their current teams will affect the free agent market is the Toronto Raptors. The Raptors have two primary free agents: Thaddeus Young and Chris Boucher. (They have some other potential free agents coming off minimum contracts or that have non-guaranteed contracts for next season, but these are immaterial to this discussion).

If Boucher and Young sign with another team, the Raptors could only create at most $8M in cap space, which wouldn’t be enough to justify operating under the cap, so they would therefore still operate over the cap, having the full MLE and BAE to add talent. 

However, because the Raptors will have roughly $30 million in space below the luxury tax ($35 million below the apron), they could potentially re-sign Young and Boucher and still have the full MLE to add talent (depending on the starting salary of those two players).

So, there is a scenario where Young and Boucher both sign elsewhere, therefore taking up valuable MLE money that could go to other free agents. Alternatively, they could re-sign with the Raptors, allowing more MLE available for other free agents, and they wouldn’t even be preventing the Raptors from using their MLE either.

Other examples include the Knicks, who could re-sign Mitchell Robinson and still use the full MLE, or Robinson could sign elsewhere for another team’s MLE. Same goes with Taurean Prince of the Timberwolves, and Donte DiVincenzo of the Kings, among others. 

Pat Connaughton and Bobby Portis could get MLE money elsewhere, or re-sign with the Bucks (Milwaukee will likely only have the Taxpayer MLE to add talent regardless of what happens with Connaughton and Portis). Similar situations occur with Nic Batum for the Clippers and Gary Payton II for the Warriors. 

However, Taxpayer MLE situations are a little more complicated because teams will sometimes choose not to even use them because of the potential high luxury tax penalties of doing so. For example, the Warriors didn’t even use the Taxpayer MLE in 2021 because doing so would have added nearly $30 million in luxury tax. Therefore, losing Connaughton and/or Portis might make the Bucks more willing to use the Taxpayer MLE, so there isn’t the same lack of opportunity cost that comes with the full MLE examples noted above.

The 2022 free agency class is low on stars, but there are a lot of players that will receive salaries in the $4 million to $10 million range, and they will be fighting for MLE and BAE money. If I were one of these players (or their agents), I would be hoping that rather than playing musical chairs and switching teams, most of their free agent counterparts stay put this summer. If not, the money teams have available could dry up fast.