Penny Wise and Pound Foolish

In the movie Zoolander, Fabio wins an award for best Actor/Model. Fabio is excited about the award because the award recognizes him as an Actor "\Slash" Model and not the other way around.

This year the Denver Nuggets front office has been advertised as Title Chasers "\Slash" Cost Cutters. Is it truly possible to be both? Is it possible to do whatever it takes to win a title while at the same time cut costs any chance you get?

The Nuggets have been at a crossroads this year. The team is primed and close to contend for a title. The team is also over the luxury tax.

The Nuggets made an appearance in the last NBA Draft by trading in to get Ty Lawson. Other team moves were mostly standing pat/swapping parts: re-sign Birdman; lose Dahntay Jones replace with Aaron Afflalo, etc. Other than drafting Lawson, the team executed no concrete action to upgrade the roster.

The Nuggets did make at least some attempts to upgrade the roster through lower dollar offers to Channing Frye & Grant Hill among possibly others.

At the same time however, more dedication was made by the team towards cost cutting decisions with a goal toward lowering the luxury tax. The actions were successful in lowering salary costs; but were counter-productive in the "\Slash" goal of the team, winning a title. For example:

·         Free Agent Linas Kleiza signs overseas.

·         The Marcus Camby $9mm trade exception allowed to expire.

·         The Chucky Atkins $3.2mm trade exception allowed to expire.

·         Stephen Hunter and a 1st round pick are traded for a $3.7mm trade exception.

·         To a lesser extent, Renaldo Balkman was given a lower cost contract extension.

By choosing towards cost cutting and not "\Slash" title chasing, the Nuggets in short will have traded Marcus Camby, Chucky Atkins, Stephen Hunter and Two 1st Round picks… for Johan Petro. That’s a 4x cost-cutting win. But "\Slash" strategically that’s a multiple whammy in the bad department.

The Nuggets playoff run last year was truly glorious and was a true pleasure for those of us who have been diehard fans all the way back to the ABA days. For those like me who paid money to watch the Westhead teams you've earned your stripes!!!

The playoff run also benefitted from good fortune. The Nuggets had the 2nd seed with 54 wins; but the 2nd seed was awarded via a 3-way tie breaker with Portland and San Antonio (Houston was one game back at 53 wins). The 2nd seed via tie breaker provided a much friendlier path to the conference finals and the Nuggets were able to avoid Houston, Portland and San Antonio.

Can good luck and fortunate seating be relied on again this year?

During the trade deadline the Nuggets had been recently linked with trade discussions to acquire another big. Interesting & ironic names that came up include these two gems:

The Nuggets inquired into Hakim Warrick’s availability but talks died when Milwaukee wanted a rotation player in return. Instead of overpaying today, should the team have been more aggressive and have signed him as a free agent in the off season?

The Spurs are shopping Antonio McDyess and the Nuggets have been identified as best match for McDyess. Ironically, if I could choose only 1 player to add to the roster who I thought would give the Nuggets the best chance to win it all this year, I would choose McDyess. He’s the ideal 3rd big, defends, rebounds has offensive game and would allow Birdman to shift into the better fitting role as the all-hustle 4th big.

This is the same player the Nuggets chose to contract buy-out last year under a suspicious cloud (does he refuse to come back to Denver, did the team never have the intention of keeping him…). Ironically, if the team did acquire McDyess they’d be paying him twice; his current contract and the $3mm on the books from last year’s buyout. Wouldn’t it have been simpler to have just kept him last year? And would he have been that last little bit to have pushed the Nuggets over the top… last year?

On a side note I believe you could make the argument that McDyess may be the single greatest and most talented role player in league history. McDyess always appeared very unassuming and never felt comfortable being the team’s superstar. The times he was on a team with more flashy star players he really seemed to be the most comfortable.  But I digress.

Cost-Cutting wise, the Hunter trade made total sense. But "Slash" Title Chasing, the Hunter trade made no sense when it was done; and makes less sense today. The team gave up two very valuable trade chips, 1st Round Pick and an expiring $3.7mm contract. In return all the got was a $3.7mm trade exception (we're not counting 2nd Round Picks in this discussion). In re-trade a trade exception is limiting, you can only trade it for a player of matching value give or take 25%. For a title run, all the different players available, the Nuggets could’ve very easily built a tantalizing package of multiple expiring contracts, and even a 1st rounder if need be, to give in return for "the missing piece".

There’s been postings about all the money and big ticket shopping the Nuggets can do after the 2010/2011 season. I don’t think that’s the case for a number of reasons (follow me here):

The Salary Cap, like the polar ice caps will continue to shrink. Next year’s Salary Cap figure has already been stated to be less than this year. AND this is not even factoring Sterns CBA plan of smaller harder caps. This is strictly status quo:

2008-2009 Salary Cap figure - $58.68million

2009-2010 Salary Cap figure - $57.70million (down 1.67%)

2010-2011 Guesstimated Cap - $56.74 (if you deduct the same 1.67%)

2011-2012 Guesstimated Cap - $55.79 (is you deduct the same 1.67%)

After the 2010-2011 season only Kmart & JR’s contracts come off the books. For 2011-2012 the Nuggets already have $51million tied up in only 6 contracts (Melo, Billups, Nene, Lawson, Birdman & Balkman). Billups’ contract is a team option, but would the team really want to cut him outright? Also, Afflalo is a free agent so you need to take care of him. Next year the Nuggets are potentially $16million over the cap with just 9 contract commitments. Kmart’s $16million falling off the books doesn’t mean you’ll have $16million to sign a free agent. It just means your remaining total salaries (for 9 players) almost equal the cap.

If you are $16million over the cap (as estimated the Nuggets may be next year) you’d need to trim $32million off your roster in order to be able to sign a $16million free agent.

In the event the Nuggets sign Afflalo (let’s go with a low $3mm in anticipation of the CBA); you don’t re-sign Kmart, JR & Billups; and you sign scrubs for the rest of your roster (go with $1mm per), you end up with roughly $10mm to sign 2 top free agents. If the Nuggets can actually do that then you end up essentially exactly back where you started. You have a shallow core of players (maybe 7) and the rest are pine-riders. If you chose to resign Kmart, JR & Billups to low contracts, say $3mm, you then end up with maybe $3mm to sign a free agent.

Stern with the CBA & potential lock out may totally make all of this moot; but would it better serve the Nuggets next year to try to trade their expiring contracts (Kmart, JR for specifically) and get younger replacement talent from teams trying to trim payroll "\Slash" title chasing. Or will they be conservative, cut costs, let the contracts expire after the 2010/11 season and deal with business then?

Returning to the question: Can an organization, to take a page from Fabio as a "Slash" performer, be a Champion "\Slash" Cost Cutter?

And; Lastly & most importantly, prayers and wishes go out to Coach Karl and his family for a full and speedy recovery.