The Denver Nuggets are playing with house money. They have three franchise cornerstones in Nikola Jokic, Jamal Murray and Michael Porter Jr. All three are under 25. All three are under team control for at least three more seasons. Porter's health is always going to be somewhat precarious, but the Nuggets are about as secure in their position as any small-market team can be.
They are going to win next season. They are going to win, at the very least, for the next three. If Jokic stays put (as safe a bet as exists among superstars given the sheer lack of rumors surrounding his future), that window realistically extends to five years. That represents the duration of Murray's current contract. It also gets Porter through his seventh season, the first feasible point for a young star to leave their original team (with LeBron James, Chris Bosh and Gordon Hayward being the prime examples).
As dangerous as the NBA tends to be to budding small-market juggernauts, the Nuggets can afford to be choosy when it comes to their offseason moves. They aren't the Lakers or Clippers. They don't have to make win-now moves. They aren't the Rockets or Warriors either, facing crippling financial circumstances. They are a well-built team that can afford to be opportunistic with its roster in the near-term. If the chance to add another legitimate star arises? Great, the Nuggets can jump on it. But they don't have to do so, and that will allow them to do just about anything on their own terms. They aren't trading five first-round picks for anybody.
So how are they going to wield that flexibility? Below is our roadmap for Denver's offseason. They may not be as aggressive as their Western Conference competitors, but meaningful upgrades will exist if they seek them out.
One note before beginning: we will be using Spotrac for player salaries, and 2019-20 cap numbers for this exercise as a whole. That includes previously agreed-upon numbers like the rookie scale and the minimum salary. A frozen cap is the likeliest outcome of negotiations between the league and the NBPA, but these numbers could theoretically change in either direction. Under the assumption that the 2019-20 numbers will be used, these are the pertinent numbers for these projections.
Non-Taxpayer Mid-Level Exception (Year 1)
Taxpayer Mid-Level Exception (Year 1)
Luxury tax apron
Cap room Mid-Level Exception (Year 1)
Cap situation and overall finances
There are very few certainties when it comes to roster-building, but you can take this one to the bank: the Denver Nuggets will not pay the luxury tax this season. The evidence supporting that thesis is overwhelming:
- The Nuggets have not paid the luxury tax since the current, punitive formula was instituted in 2011. This is a thrifty team in general. They are one of the few teams that do not have a dedicated practice facility. Instead, basing all operations out of the Pepsi Center, and along with the Portland Trail Blazers, are one of only two NBA teams not to have a G League affiliate.
- At a bare minimum, the Nuggets should expect to pay the tax during the 2022-23 season. That is when Porter's second contract will kick in, and the Nuggets could have as many as three max contracts on their books between him, Jokic and Murray. Jokic becomes a free agent in 2023, and if he stays, he'll be getting a raise. That will make it difficult to avoid the tax again for the next two seasons, while Porter and Murray are also on expensive contracts. If they remain there, they will be subject to the repeater tax in 2024-25 for having spent three consecutive seasons as a taxpaying team. That is why staying below the tax line now is so important. It isn't about avoiding a small payment in the present. It's about delaying the repeater tax clock as long as possible so they aren't making huge payments in the future. It kicks in when a team has paid the tax in three consecutive seasons, or in four out of five. Don't be surprised to see cost-cutting moves down the line specifically for the purpose of dodging the tax line here and there for the sake of repeater tax evasion. The 2021-22 season will likely not include a tax payment either for this exact reason. You can argue that the wealthy Kroenke family can afford to pay as much in taxes as is necessary to win championships, but I can assure you, they would disagree with that, and whether or not to do so is their decision. They may pay the tax eventually, but they won't do so annually.
- The NBA estimates that 40 percent of revenue comes from the gate. Fans may not be able to attend games next season. That hurts every team, but would be particularly devastating to the Nuggets. Their regional sports network, Altitude TV, has not been carried by Dish Network or Comcast due to a dispute over retransmission fees. That means they could be without not only gate revenue, but a big chunk of their typical local television income as well.
Add all of that up, and the Nuggets will almost certainly avoid the tax next season no matter what opportunities present themselves this offseason. Therefore, we need to establish where they are in relation to the tax right now before we dive into what they might be able to do.
Jamal Murray (estimate)
Michael Porter Jr.
No. 22 pick
The Nuggets have nine players and one draft pick accounting for $102,759,923. The projected tax line is $132,627,000. That makes things simple. The Nuggets have approximately $30 million to fill out five roster spots. That number may change ever so slightly. As you'll notice, Murray's cap number is an estimate. Why? Because max extensions do not specify dollar figures. They specify percentages of the cap that become dollar figures when the cap is set and the contract kicks in. Murray (and Pascal Siakam) stand to lose quite a bit of money based on the pandemic's impact on the cap. Both signed for the max, but the max is going to be worth less now than anyone figured it would be. The figure we're using is a projection equaling 25 percent of the cap, which is what his deal specifies. If the cap changes, his salary changes.
Now, the question becomes what to do with that $30 million. Around half of it is going to be spoken for. Jerami Grant had a player option for $9.3 million, but will opt out and get a raise after a terrific playoff run. While contenders appear interested in him at the Mid-Level Exception, Grant's price tag is going to be higher than that. That won't bother the Nuggets much. They have Full Bird Rights, and can therefore pay him up to the max. But the cap space teams will have interest in him as well. His defensive versatility and shooting fit in anywhere. Atlanta and New York stand out as teams that could be interested.
The Nuggets tend to take care of their own free agents. The overwhelming expectation should be that Grant is retained. The Denver Post's Mike Singer reported that a deal could come in at around $64 million over four years. If we use that as the baseline, Denver could backload the deal and start Grant off at around $14.3 million. That will give us another $15.5 million or so to allocate to the rest of the roster.
This is where things get interesting. The Nuggets still have three important incumbents to take care of in Paul Millsap, Mason Plumlee and Torrey Craig. Denver could certainly keep two of them. Maybe three. All three face somewhat unsteady markets. Millsap is 35 and declined meaningfully, but has rare enough defensive versatility and shooting for his size to get a decent offer elsewhere. Craig has those defensive gifts and is six years younger, but struggles on offense. The Nuggets seem to like Plumlee far more than the rest of the league. As most teams move away from centers, the Nuggets not only gave him plenty of playing time as a backup, but allowed him to share 87 minutes with Jokic in two-center lineups.
Denver's dedication to size probably means Plumlee is the first priority. Bol Bol (signed on a two-way deal already) is not ready to be relied upon yet, but expect Plumlee back on a one-year deal in case Bol stands out. In all likelihood, Plumlee won't be particularly expensive. At best, he is the sixth-best realistically available big man after Marc Gasol, Aron Baynes, Tristan Thompson, Dwight Howard and Serge Ibaka. Realistically, he might not be in the top 10. Not many teams pay big men. More pay players like Craig, but if the Nuggets make him a $2.5 million qualifying offer, they can scare off suitors by ensuring that he is only a restricted free agent. Millsap's age makes him the odd man out. He'll land on his feet with another contender. Porter and Grant are more than enough at power forward.
Denver's history suggests that keeping their own players will be the plan. They just tend not to be particularly aggressive in free agency, preferring to extend their own early and trust the power of continuity. There is another path here, though. If the Nuggets want to take a stab at significant improvement, they have the Non-Taxpayer Mid-Level Exception at their disposal. Denver's contending status would make it a desirable destination. If the Nuggets choose to take this route, there are three interesting player types they could seek out.
- The Nuggets could almost certainly improve upon Plumlee if they'd like. Gasol probably isn't coming off of the bench, but the other four listed big men have all done so at points. Baynes is, stylistically speaking, the closest to Jokic. Thompson is the most comfortable on the perimeter defensively, a need given their scheme and Millsap's likely departure. He could fill in some of Millsap's power forward minutes as well.
- Danilo Gallinari has said he wants to join a winner this offseason. He spent most of his career in Denver. The Nuggets were only an average shooting team last season. He's a bit redundant with Porter, but that's not a terrible problem to have so long as they're staggered.
- If they want to improve upon the Craig spot with someone a bit more consistent, Mo Harkless is available and at least hovers around league-average shooting consistently. Jae Crowder is probably going to return to Miami, but if he hits the market, he's worth consideration here as well.
Let's say Grant comes in at that $14.3 million figure, while a Mid-Level addition earns $9,258,000. That gives us $6.3 million left to fill three roster spots. That's entirely possible, even if Craig takes his qualifying offer. The veteran's minimum is $1.6 million, so they could easily sign three and call it a day, or two plus Craig. Substitute an undrafted rookie for one of those veterans and they can save another $700,000 or so. There are even ways to create a bit of extra cash to potentially retain Craig or Plumlee over a typical minimum player through the NBA Draft.
2020 picks: No. 22
Owed future first-round picks: N/A
Incoming future first-round picks: N/A
A bold prediction: the No. 22 pick will not be on Denver's roster next season. That pick will cost them almost $2.4 million next season. A veteran's minimum is around $750,000 cheaper, cash the Nuggets could use elsewhere. This matters in their long-term luxury tax calculus as well. Let's assume for a moment that Denver drafts a foreign player and stashes him abroad next season. They'd also delay his rookie-scale contract by a year, and therefore his extension if he works out.
As the Nuggets learned with Malik Beasley and Juancho Hernangomez, their depth makes it hard to develop rotation-caliber young players. Why roster a player that isn't going to get minutes? It's cheaper in both the short and long term just to sign a veteran and let that young player develop in a foreign league. They have all of this depth now, but as their high-end talent gets more expensive, they might not later. Having a cheap rookie-scale player later would mean more at that point.
So let's say this is the path they take. Who might they target? The Nuggets have prioritized upside in recent picks like Porter and Bol. Aleksej Pokusevski fits that bill as the rare big man that can pass, dribble and shoot at a high level. Hmm... sounds like another Nuggets big man doesn't it? Well, the reason Jokic fell to them in the second round was his weight. He was too heavy. Pokusevski has a different problem. He's a true seven-footer... and he doesn't even weigh 210 pounds. He'll need time to pack on some weight. Another year abroad might help him do just that.
Stashing prospects isn't always easy. It requires buy-in from the player and his agent, and a talent like Pokusevski might not be interested. If he isn't, don't be surprised to see the Nuggets spend the pick on a foreign player that is lower on most draft boards specifically because that player has agreed not to come over right away. There is also the possibility that they include the No. 22 pick in a trade for a big name. They've already been linked to one.
Yahoo's Vincent Goodwill reported Wednesday that the Nuggets are one of around 10 teams interested in trading for Jrue Holiday trade. A year ago, when Denver was consistently linked to Bradley Beal, building that sort of trade was fairly straightforward. Michael Porter Jr. was the trade chip and Gary Harris was the salary ballast.
Now? Such a trade is a good deal tougher. Porter appears to have played his way out of trade talks. Harris played well in the playoffs, but has declined offensively in recent years. He has shot only 33.6 percent from behind the arc over the past two seasons, a sharp fall from the 40.5 percent he hit in the two seasons prior. His 2-point shooting numbers have fallen just as much. Harris went from a consummate 3-and-D player to a borderline offensive liability nearly overnight.
If Porter is off of the table and Harris isn't the Harris he used to be, this sort of trade is almost impossible unless Denver bowls New Orleans over with picks. The Pelicans just have no reason to accept a package of, say, Harris, Will Barton and a first-round pick when Caris LeVert might be available. Or one of Golden State's premium draft picks. Or Myles Turner. The Nuggets just aren't going to win this bidding war.
But if they want a shooting guard upgrade? They should take a long, hard look at Victor Oladipo. His expiring contract and recent history of injuries have lowered his value well beyond Holiday's. In truth, it's so low that the Pacers probably shouldn't trade him. Gary Harris and a pick just aren't worth the chance that Oladipo is ever his 2018 self again. But if Indiana determines that trading him is the best course and Denver can get him for that sort of package? The reward is worth the risk. A healthy Oladipo is as good a player as Holiday, if not better, and is two years younger. If he leaves, Denver will have paid so little that it would barely bother them. The cash savings would just be funneled back into a Harris-caliber replacement with their 2021 Mid-Level Exception.
Denver can flip this entire script by offering Porter. There just isn't a good reason to yet. Denver isn't far enough into its contention cycle to trade a possible future star for a questionable present one. If Beal hits the market after another playoff disappointment? We're having a different conversation. But right now, the Nuggets don't even know what they are yet. A year of evaluation with Porter will give them a better idea of just how far they have to go to become champions. That, ultimately, will be the theme of their offseason.
What would an ideal offseason look like?
Let's assume for now that Holiday, Oladipo and Beal are off of the table. The options then become retaining all or most of last year's team, or tweaking it slightly and hoping for improvement. The latter makes more sense for one simple reason: if the 2019-20 Nuggets were good enough to beat the Lakers, they would have beaten the Lakers. Sure, there's room for internal growth, but the Lakers are going to be a better on-paper team next season. The Nuggets aren't going to catch them by standing still, so these are the steps to take in order to pursue them:
- Retain Grant on that four-year, $64 million deal starting at $14.3 million.
- Use the full Mid-Level Exception, ideally on a wing that can shoot. Gallinari is our first choice. Jae Crowder is the more defensive-minded second choice, followed by Harkless. Call Joe Harris after Gallinari, but realize that he's probably a pipe dream.
- Stash the No. 22 pick abroad next season.
- Sign two veterans for the minimum. One of them should be a big man. The other can be the best player available. A third roster spot goes to an undrafted rookie, or a second-round pick acquired on draft night.
- This leaves us around $4.5 million left below the tax line with one roster spot left to fill. It goes to either Plumlee or Craig, whoever takes it. If neither does, the Nuggets replace one of them using the $3.6 million Bi-Annual Exception, preferably on a center. Ideally, we're keeping some money in reserve in case it is needed on the buyout market or any other in-season purposes.
This gives Denver a roster mostly similar to last season's, but with one big addition. That signing, in conjunction with internal improvement, might be enough to catch the Lakers, but even if it isn't? It's a relatively light commitment that leaves Denver room to make a bigger move later. The Nuggets would still have Porter and their own picks in this scenario. They wouldn't have to commit to a path quite yet, and given the roster they already have, they have no great need to.