Grizzlies: How the mid-level exception is a key tool for roster upgrades

The Memphis Grizzlies could either have the $14.1M non-taxpayer mid-level exception or the $8.8M mid-level room exception this summer. It's important to use them this offseason.

The Memphis Grizzlies will look to tweak its roster this summer, and a possible pathway to do so is through the mid-level exception. Since 2019, Tyus Jones has been the only free agent signing through the mid-level exception — as Derrick Rose signed through the bi-annual exception in 2023, and two-way conversions have been used with portions of the MLE.

This summer, the Grizzlies are in a unique position with their flexibility. If Jaren Jackson Jr. doesn’t make All-NBA — which we find out today — then they will open up cap space for setting up a renegotiation-and-extension with their former Defensive Player of the Year. Doing so would give them access to a room exception worth roughly $8.8M.

If Jackson makes All-NBA, he becomes eligible for the super-max extension, and the Grizzlies could operate as a team over the cap. I talked about the flexibility enabled if this happens a few weeks ago, but for the purpose of this article, they’d have a $14.1M non-taxpayer mid-level exception. They could also have this exception if Jackson chooses to wait until next summer — if he doesn’t make All-NBA.

Whether it’s the room or non-taxpayer mid-level exception — and worth noting, they have a $5.1M bi-annual exception they could use instead, but not nearly as noteworthy as the more lucrative options — the Grizzlies should look to use the full MLE this summer.

Financial flexibility

The mid-level exception is tricky nowadays in this apron world. Only one team last offseason used their full non-taxpayer mid-level exception on a free agent — the Golden State Warriors with De’Anthony Melton. Since the Philadelphia 76ers had cap space last year, they used all of the room exception to re-sign Kelly Oubre. Other teams such as Dallas (Naji Marshall) and the Clippers (Derrick Jones Jr.) used a significant portion of their MLE to add to their rotation.

Teams don’t want to be hard-capped at the apron, so they stayed away from the full mid-level exception.

The Grizzlies likely won’t have to worry about that possibility. Per Cleaning the Glass, they sit roughly $50M away from the luxury tax. They can take care of Santi Aldama’s free agency and Jaren Jackson Jr.’s extension while using an exception without worries of the luxury tax.

With that said, they have the mobility to offer 100% of its exception in order to add a piece to the rotation.

Can it get a playoff rotation player?

The mid-level exception is a vehicle to add a playoff rotation player. Some recent examples of players who added value in a team’s playoff rotation after signing on the MLE:

• Donte DiVincenzo, Knicks (2023)

• Malik Monk, Kings (2022)

• Kyle Anderson, Timberwolves (2022)

• Isaiah Hartenstein, Knicks (2022)

• Caleb Martin, Heat (2022)

• Bruce Brown, Nuggets (2022)

• Alex Caruso, Bulls (2021) — Long Live, the pre-All-Star Break 2022 Bulls

• Jae Crowder, Suns (2020)

It’s not always a hit — if you look at just the 2020 offseason, Tristan Thompson, Montrezl Harrell, Serge Ibaka, and Meyers Leonard all received the non-taxpayer mid-level exception. However, the recent track record suggests that a good contributor can be fetched on such a deal.

In this free agency class, who are some players that could be in this ballpark? And keep in mind, before you suggest a player could get more than the $14.1M non-taxpayer mid-level exception, only the Brooklyn Nets and possibly the Detroit Pistons have workable cap space — and who knows how they’d use it. Sorted by current AAV:

• Brook Lopez

• Bruce Brown

• Tim Hardaway Jr.

• Caris Levert

• Tre Jones

• Precious Achiuwa

• Malik Beasley

• Nickeil Alexander-Walker

• Tyus Jones

• Quentin Grimes

• Gary Trent Jr.

• Ty Jerome

• Guerschon Yabusele

Some of these names will draw optimism, and others not. However, free agency isn’t the only avenue to use the mid-level exception.

It doesn’t just have to be a free agent signing

Mid-level exceptions can also be used for trades.

This past year, the Hawks (Terrence Mann), Heat (Kyle Anderson), Pelicans (Kelly Olynyk), and Kings (Jonas Valanciunas) all used their mid-level exceptions in trades. Doing so can create a trade exception — for example, the Pelicans created a $13M traded player exception because Olynyk’s contract fit into their MLE, so the exception was the difference between ingoing/outgoing contracts + Olynyk’s salary. The Hawks created a $13.1M traded player exception because Mann fit into the MLE, and the exception was the difference between Bogdanovic ($17.3M) and Hyland ($4.1M).

Trading into the MLE allows for extra salary cap shenanigans, but it also expands the talent pool they could acquire. Some players that could fit into the MLE.

Non-taxpayer ($14.1M)

• Herb Jones

• Robert Williams

• Donte DiVincenzo

• Matisse Thybulle

• Isaac Okoro

• Derrick Jones Jr.

• Naji Marshall

Room exception ($8.9M)

• Cody Martin

• Goga Bitadze

• Ayo Dosunmo

• Most players on their rookie deals

This list isn’t necessarily an endorsement, rather a ballpark of players that fit the criteria. Nonetheless, if leveraged correctly, it’s a pathway to add to the rotation.

Trade mobility going forward

A crucial element for the mid-level exception for the Grizzlies is trade mobility, specifically more tradeable contracts.

Right now, the only mid-sized contracts are Brandon Clarke ($12.5M) and John Konchar ($6.1M). The rest of the books are smaller rookie contracts and the Big 3’s deals. The Grizzlies have to build up several more mid-sized contracts to open up more flexibility on the trade market.

Re-signing Santi Aldama could be a key component of trade mobility, as his value as a 24-year-old 7-footer that can dribble, pass, shoot is intriguing — for the Grizzlies and league-wide. Utilizing the mid-level exception could give them another contract to utilize as a trade chip.

The Grizzlies could then stack two of these contracts with maybe a smaller contract, and suddenly be in the territory of landing a player making $20M or more annually. With more of these contracts, and the fact that they still have their draft picks, they could build more attractive trade packages.

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Obviously, the opportunity to use the mid-level exception has to be advantageous. There aren’t many things worse than bad money on the books in this CBA, and not many teams even have the space to absorb these contracts with assets attached to them.

Nonetheless, I’m closely monitoring how the Grizzlies plan to use their mid-level exception this summer. It’s been an infrequent tool for them. Though they’ve utilized parts of it to convert two-way contracts, they haven’t made a “splash” with this cap mechanism since 2019. In addition, it’s a tool that can help fortify their rotation going into next season.

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