How the Nuggets Can Set Themselves Up for the Summer of 2019

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It has long been a trope in professional sports when talking about a team that is good-but-not-great to diagnose them as “one player away.” The Nuggets, and Colorado sports, are very familiar with this “no man’s land.” With the signing of Isaiah Thomas last week & Monte Morris yesterday, the Nuggets look to be set going into the 2018/19 season barring any extreme changes. Earlier this week, it was reported Denver was one of several NBA teams that had reached out to San Antonio regarding Kawhi Leonard before he was traded to Toronto. In the report, Adrian Wojnarowski & Ramona Shelbourne give note that Philadelphia, Boston and Portland have refused to offer San Antonio any pieces from their major cores, so it should be assumed the Nuggets would not part with Nikola Jokic, Gary Harris or Jamal Murray.

What this report does signify is the Nuggets are subscribing to the “one player away” theory and believe they can be a suitor for a high-end player, whether it be on the trade market or perhaps next summer in free agency. As opposed to sacrificing key players or valuable pieces like 1st round picks, the Nuggets could carve a path to offer a max contract next summer. It would certainly come at a price.

Denver Nuggets guard Gary Harris (14) in the second half of an NBA basketball game Friday, March 9, 2018, in Denver. The Nuggets won 125-116.(AP Photo/David Zalubowski)

 

The latest projection for the Salary Cap for next summer is at $109,000,000. According to the CBA, max contract numbers are determined by a players experience in the NBA. Players with 10+ years’ experience can receive up to 35% of the Salary Cap, which would be approximately $38,150,000. Players with 7-9 years’ experience can receive up to 30%, which comes out to $32,700,000. Players with 6 years or less are eligible to receive 25%, or starting salary of $27,250,000. Looking at the key players in Free Agency in 2019, the number the Nuggets will have to aim for is the $32,700,000 max for players with 7-9 years’ experience.

The Nuggets first step in achieving max cap room would be to guarantee Jamal Murray, Juancho Hernangomez, Malik Beasley & Tyler Lydon’s team options on their rookie scale contracts.

The deadlines on these team options are way before next offseason, and Murray is the only option that is a no brainer on picking up. The other three have all shown flashes but have not had real opportunities for playing time. All three of the young guys contracts add up to approximately $8 million, which could help in getting the requisite cap room, but would leave Denver depleted of bodies on the roster. Denver should keep all of them. Players on rookie scale contracts are some of the most valuable assets in the league, both cost-controlled & year-controlled.

The next three moves will be tough to stomach for the Nuggets, and do present a big risk. School of thought suggests Denver would only go forward if they knew they had a real chance at a franchise impacting Free Agent.

-Decline Paul Millsap Team Option of $30 million
-Do not extend Qualifying Offer to Trey Lyles, making him an unrestricted FA
-Trade Mason Plumlee/2019 1st round pick into cap space, a la Faried/Arthur to Brooklyn trade                   earlier this summer

Declining Millsap is the toughest pill to swallow. Millsap is the first “All-Star” to sign with Denver since Kenyon Martin in 2004. According to the CBA, a player must play for the same team for 3 years for the team to receive Bird Rights which would allow them to go over the cap to re-sign their own free agents. By declining Millsap’s third year, they would only be able to re-sign Millsap using cap space. If the Nuggets strike out on their A-list targets, bringing Millsap back on a smaller per year, longer term contract into their created cap space makes some sense and allows them to add a second tier Free Agent along with keeping Millsap. Unfortunately, because the Nuggets will attempt to add somebody using cap space in this scenario, that would restrict them from using the Mid-Level Exception which has an estimated starting number of $9,246,000 next year. They will have access to the Room MLE, which is worth $9,758,000 over two years, to add another piece after using Max space. While Denver could wind up with a steal at that price, it may be too cheap to bring back Millsap. More on the Room MLE later.

Saying goodbye to Lyles is another risk as he will turn 24 at the beginning of the 2019/20 season. Lyles could play himself into a starting job this season which would play him out of Denver’s price range potentially anyway. His qualifying offer is $10,092,747, which is low enough that if Denver had to go to Plan B and use their space to resign Millsap they could still extend Lyle’s QO and match any offer he receives. It remains to be seen the market for bigs next summer. There are a lot of teams with cap space, but the league values Guards & Wings more in today’s league then bigs. The market could dry quickly just like it did this offseason.

Trading Plumlee into cap space harkens to Denver’s move earlier this summer where they dumped Kenneth Faried & Darrell Arthur into Brooklyn’s cap space at the cost of a future 1st round pick. Repeating that same move for a second summer could come with some criticism. Denver’s front office must persevere through that criticism, looking at their end goal and realize creating max cap space (and using it on a top tier player!) will lead to a better team.

The pick traded to Brooklyn has protections within the Top 12 of the draft for the next 5 years, which makes sending out another pick tricky IF the pick is not conveyed this upcoming season. The only way the Nuggets keep their 2019 pick is if catastrophic circumstances ruin their 2018-19 season. Denver missed the playoffs the last two seasons by a game apiece and drafted at 13th then 14th. If Denver values their 2020 1st and doesn’t want to swallow losing three 1st round picks in four years, they could stretch Plumlee’s contract instead.

By dumping Plumlee into another team’s cap space, Denver created $30,796,725 in cap room. If they stretch him their space would be $26,116,359. But wait! Remember the projected max for a player with 7-9 years of experience is $32,700,000. Both of those numbers are short of that full max room. Sure, Denver could attempt to sign someone to a “near” max contract, but it would hurt them in negotiations. The difference between the projected first year max and the space Denver can clear is less than 1%. The only way Denver can reach the full maximum is to dump one of Juancho Hernangomez, Malik Beasley, Tyler Lydon or Torrey Craig into space. If no team is willing to take on any of those young guys with no incentive, then the only option to achieve full space would be to stretch either Juancho Hernangomez or Tyler Lydon to shave the extra $2,000,000 off their cap sheet.

By moving on from Paul Millsap, Trey Lyles, Mason Plumlee, one of Juancho Hernangomez or Tyler Lydon & a future 1st round pick, Denver can clear full max cap space. Potential targets include Jimmy Butler, who has recently been recruited by Demaryius Thomas on Instagram. Klay Thompson is a guy who would love living in Denver, and not just because he is a known lover of marijuana & scaffolding. Denver can shoot high with Kyrie Irving or Kawhi Leonard, but a better fit than either would be Milwaukee’s Khris Middleton. Pairing Jokic with one of Karl Anthony-Towns or Kristaps Porzingis, both players long compared to and against Nikola, would be equal parts unique and scary. Towns & KP would be difficult due to them being Restricted Free Agents. If Denver strikes out on all those players, backup plans could include DeMarcus Cousins, Kemba Walker, Kevin Love, Marc Gasol or Al Horford. Over all those guys, they could bring back Millsap on a discount from his $30,000,000 over longer years and/or restrict Trey Lyles and bring him back long term. Freeing up their cap space could provide Denver with a way to drastically improve and make a jump to the top of the Western Conference and possibly championship contention.

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