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The short answer is ‘no.’

As I’ve been perusing the internet today, I see a lot of misinformed fans with the impression that the Heat (or any other team with room for a max player) can add a Mid-Level Exception (MLE) player once the cap space is used up. Ray Allen and Raymond Felton are common names that come up in such a conversation.

But per the NBA Salary Cap FAQ, a team that is under the cap (like the Heat) and is hoping to use up all its cap space signing 2-3 big-name free agents does not have the ability to use their mid-level exception once the cap space is used up.

For example, assume the cap is $49.5 million, and a team has $43 million committed to salaries. They also have a Mid-Level exception for $5 million and a Traded Player exception for $5.5 million. Even though their salaries put them $6.5 million under the cap, their exceptions are added to their salaries, putting them at $53.5 million, or $4 million over the cap. So they actually have no cap room to sign free agents, and instead must use their exceptions.

Teams have the option of renouncing their exceptions in order to claim the cap room. So in the example above, if the team renounced their Traded Player and Mid-Level exceptions, then the $10.5 million is taken off their team salary, which then totals $43 million, leaving them with $6.5 million of cap room which can then be used to sign free agent(s).

In the Heat’s case, the salary cap is $56.1 million and with the minimum salary cap holds required to fill out the roster, they have about $44 million to divvy up between Wade, LeBron and Bosh. ($14.7 million each.) But they only have that much cap space because they renounced (or will renounce) their Traded Player and Mid-Level exceptions. However, they could sign the three superstars at those salary levels and then sign a MLE player next summer if they choose to do so. In fact, the MLE can be divvied up amongst a number of players, which is probably how the Heat would handle the flood of veterans that would want to join the Heat in search of a ring.

The same rule applies if a team has enough space for one max free agent. Take the Clippers, who can afford one max contract. The Clips have that much space because they have renounced (or will renounce) their MLE. If they were to use up their cap space to sign Paul Pierce, the MLE would not be available to them until next summer (assuming they are still over the cap).

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