The Mid Level Exception in most cases is used to get a declining veteran player to join a contending team, or a young player who is worthy of some money but is nothing that is above average. It is the league average salary, so you can expect to get a league average player. Adding an average player at that price is not worth it, because you will most likely overpay for scoring, as the Travis Outlaw and Al Harrington deals suggest. So to go with the theory that the MLE can net you an average player. I looked at 3 examples of the MLE use by teams this off-season to show how it can be used very effectively, and how it can just create more of a salary quagmire.
Example #1: Celtics Sign Jermaine O'Neal using full MLE for 2 years.
This is an example of signing a declining veteran player to a contender. JO was a .077 wp48 player last season. That is below average. However, WP underates defense, and that is a great thing about JO. He is a very good defender. So, lets just estimate that with this information that JO is a league average player, or slightly below so. JO is a much needed big at a time when Kendrick Perkins is out for 3-4 months. So, it comes down to who you feel more comfortable taking Perkins minutes : JO or Big Baby Davis. Davis is a -.094 wp48. Davis is a bad player. JO is an average player. This signing by the Celtics seems pretty average as they get an average player with an average salary, to replace a bad player.
Example #2 Nuggets Sign Al Harrington using full MLE for 5 years.
Eek. Very bad signing. Harrington is a bad player at -0.024 wp48. He scores alot, and that is most certainly why he got this deal, but I'm surprised Dean Oliver could have advised Stan Kreonke to do this deal, but we know they have recently fired all their statistic understanding FO members. So, you use the MLE to not only acquire a player who hurts your chances at winning, but someone whose salary will keep the team's financial flexibility limited.
Example #3 Warriors Sign Dorrell Wright using 3.5 of MLE for 3 years.
Bravo Larry Riley, this is an excellent use of resources. Wright is a good player with a wp48 of .198 last season. He plays good defense too, so he is not being slightly overrated by WP either. We got a very good player for below average player money. He is undervalued in this market as he doesn't score lot of points, but is efficient in his scoring, and rebounds, passes, and defends well. Just imagine how great our use of the MLE will be if we use the remaining MLE on Lou Amundson, as the rumors are reporting. He's a good defensive player, and his wp48 is .190.
I've come to believe NBA teams come to 4 popular options when it comes to the MLE. They can overpay for PPG (Harrington), spend money on average-below average veteran players (JO, Rasheed the year before), sign players undervalued by the market (DWright, and possibly Amundson), or do nothing at all. In most cases, doing nothing at all would be the smartest choice, as picking the first two options above are not too smart unless you are replacing a really bad player (like Baby Davis). But the MLE can be a very valuable asset for a team that is not under the salary cap, and trying to improve, if used correctly.