what is this?
It's how the Rockets got Asik and Jeremy Lin this offseason. I don't remember the exact numbers but for both players they offered basically 3 years $24 million. Since both were 2nd round picks or undrafted players with only a few years in the league, their teams could match the deal, BUT
1) The deal has to be priced at the MLE for the first 2 years but can escalate after that
2) For the home team the cap hit is the deal as structured.
3) For the poaching team the cap hit is the average of the deal.
So the home team would have had cap hits something like $5/$5/$14 while the Rockets cap hit would be $8/$8/$8 In theory this helps the home team, they only need the MLE available to keep their player and it forces the poaching team to have cap space rather than just the MLE to make an offer. In practice we see it actually makes it harder for the home team to keep a player and easier for the poaching team to acquire a player because once that contract escalates the home team is stuck paying max salary for a mid level player.