State of the Union
The Denver Nuggets are coming off of a 49-23 season in which they fell to the Los Angeles Lakers in the Western Conference Finals in 5 games. The Nuggets were 5th in the league in offensive rating, posting a 112.6, and 16th in the league in defensive rating, posting a 110.4, giving them a net rating of 2.2, good for 11th in the league.
The Nuggets are coming off one of the craziest and impressive non-title playoff performances in recent memory, after coming back from 3-1 down against both the Utah Jazz and Los Angeles Clippers. Nikola Jokic looked like a superstar, but the real story of the postseason was the arrival of Jamal Murray as a star. Murray put together a stretch of games against the Jazz that bordered on lunacy. From game 5 on, Murray averaged 36/5/6 on 57/54/87 shooting, averaging 14 points on 70/78/100 shooting in the fourth quarter alone. He hit some absolute dagger threes that helped pull the Nuggets through to the second round. If this is the Murray that comes into next season, there is no question he deserves the 5-year max extension that kicks in at the beginning of the season.
The Nuggets also have to be encouraged with the play of Michael Porter Jr in the restart, as he was one of the biggest surprise performances in The Bubble. He provided the team with some much-needed scoring when both Murray and Jokic were taking a breather. He left a lot to be desired on the defensive end of the floor, but with his athletic profile there’s no reason to think Porter Jr can’t improve on that side of the ball.
The team looks to be in great shape with Jokic, Murray and Porter Jr all under contract for the foreseeable future, but enters the offseason with some key rotation pieces in limbo, with Paul Millsap and Mason Plumlee hitting unrestricted free agency, Torrey Craig restricted free agency, and newly acquired Jerami Grant mulling a player option. The team doesn’t project to have any cap space, and so making smart decisions with their own free agents and exceptions will be key for Denver.
Salary Cap Analysis
-Current Cap Room: ($70,395,701)
-Max Cap Room: $6,174,892
-Projected Cap Room: ($28,032,905)
-Path to a Max: Pretty much impossible
-Best Contract on the Books: Nikola Jokic. He is a top ten player under contract for the next three years. Not many franchises can say the same.
-Worst Contract on the Books: Gary Harris. $40 million over the next two years doesn’t look too great after a lackluster performance this past season.
-Potential Offseason Targets: Kent Bazemore, Andre Roberson, E’twaun Moore, Wesley Matthews, Jeff Green
The Big Question(s)
Is Michael Porter Jr the answer as the third option on a championship level team? Do the Nuggets trust his health enough? Porter Jr was a breakout player in the bubble and flashed a polished offensive game that not a lot of big wings in this league have. Porter had shooting splits of 50/42/83 on decent volume in his first year playing in the league and can shoot off the dribble and the catch which, at 6’10”, is a lethal combination. However, there is a reason that he slipped down to 14th in the draft in 2018, as he has a very risky injury profile. The question facing the Nuggets is if they think that Porter Jr can be the third best player on a championship team, or if they should try to trade him and bring back a proven stud like Jrue Holiday, Bradley Beal etc. With two max players already under contract, it may prove financially too difficult to trade for another big contract player and still try to fill out a competent roster. It may behoove Denver to take advantage of Porter Jrs small cap hit for the next couple years and keep the current core together. On the court, Porter Jr brings a lot to the table offensively as well. He fits nicely on the wing between Murray and Jokic. Him and Jokic have built a nice chemistry, as the Joker as delivered some nifty assists MPJ’s way. The defensive end still needs work, but it will come as long as he works at it and works with Coach Malone.
Additionally, Denver faces someone difficult questions with their own free agents. Assuming Jerami Grant opts out of his player option, at what number does the team see as his ceiling in contract negotiations? His floor is the MLE, which just about every team in the league will be able to use this summer it seems, and a couple cap space teams like Phoenix, Atlanta, Charlotte or Detroit could look to shore up their defense on the wing. Does Denver balk at a multi-year deal in the mid-teens, say 4 years $56-$60 million? They have his bird rights so they can go as high as they want. Additionally, what does the team do with Paul Millsap and Mason Plumlee? Plumlee has proven a serviceable backup big behind Jokic and probably won’t command much of a market this summer. Millsap could be another MLE target around the league, as there are a number of teams looking for a backup 4 that could start in a pinch. Finally, does the team value what Torrey Craig brings to the table? They have his restricted rights and I don’t really see Craig being in demand this summer, so he might get squeezed. If the team tries to bring all four free agents back, that puts the team close to, if not over, the luxury tax line without using any exceptions.
Is ownership willing to step into tax territory after making a run to the WCF? With the playoff success in the bubble, you would have to assume yes. However, given the current financial crunch going on around the league, and for that matter the world, spending cash may be harder to come by for Denver, especially for a franchise with a history of not paying the tax.
The Offseason Playbook
The Nuggets have ultimately no cap space this offseason, which is a trend we are seeing around the league. The team has to make key decisions with 3, possibly 4, of their own free agents and have the MLE and BAE at their disposal. Let’s start with their own free agents.
-Jerami Grant: Grant has a player option at $9.3 million. My assumption is that he will opt out and try to get a better deal in the open market, as his player option is just about the same as the MLE, which he could receive from a bevy of teams this offseason. If I’m Denver, I just about have to bring Grant back as they spent a 1st rounder to bring him in and Paul Millsap is closer to 40 than 30. Now, Grant may get squeezed by the dry market, but all it takes is one team to offer a deal in the mid teens annually. If the nuggets can lock down Grant at a 4 year deal anywhere from $40-$50 million, I would consider that a win.
-Paul Millsap: At 35, 36 when next season starts, Millsap is entering the sunset of his career. He still proved his value at times in the playoffs, but who knows when the cliff is coming athletically. If I am Denver, I wouldn’t offer anything past 1 year in the $8-$10 million dollar range.
-Mason Plumlee: Plumlee has proven serviceable as a backup big for Denver, fits the system well, and shouldn’t be heavily coveted this offseason. Denver should be able to resign him around the $5-$7 million mark. If its anything more than that you wish him well on his way out of town and sign a backup big with a portion of the MLE.
-Torrey Craig: This is a brutal market for restricted free agents, and especially for restricted free agents who can’t shoot. Denver has valued Craig’s defensive talent, but I can’t see him getting an offer north of $5 million annually and could ultimately become a casualty of the current circumstances of the league, as the Nuggets try to shed salary to stay away from the luxury tax line.
In terms of potential free agents being brought into the team, the Nuggets don’t have a lot of flexibility cap wise. The team will almost certainly be over the tax and won’t be able to use the non-taxpayer MLE if they bring back all of their own free agents, even at conservative prices. There is also the issue of the team even wanting to wade into the tax, as they haven’t been known to be a franchise committed to paying top dollar to keep talent. Assuming the team operates as a tax team, some players that the team could target with the taxpayer MLE and the bi-annual exception (BAE) are: Kent Bazemore, Andre Roberson, E’twaun Moore, Jeff Green, Wesley Matthews. The team could use some wing depth, depending on what the team does with Millsap and Craig. If Plumlee walks, the team could target bigs like Tristan Thompson, Derrick Favors, or Aron Baynes.
Again, a lot of the options the Nuggets can take this offseason are dependent on the health of the finances of the franchise and the willingness to spend by ownership. This could be a critical inflection point for a young roster that just made the Western Conference Finals against Lebron, and management has to be thorough in their process to improve the team.
-22nd Pick: Tyrese Maxey, Cole Anthony, Aaron Nesmith, Josh Green
Nick Thoreson is a young professional working in finance who is passionate about the NBA and especially all things salary cap related.