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The Denver Nuggets salary cap and upcoming foray into NBA free agency

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Three first round picks give the Nuggets a sizeable amount of flexibility in the draft, but they'll have the cap space to be players in free agency as well.

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As the NBA playoffs hurtle towards the inevitable match up of LeBron James versus some team LeBron James has lost to in the Finals before, I find myself looking towards the Denver Nuggets upcoming offseason. They look to be big time players in the NBA draft, currently holding three first round picks, but sometimes forgotten is the Nuggets also will have a large amount of cap flexibility. Free agency is an avenue that has been seldom used in Tim Connelly's tenure with the Nuggets. After a horrid start that saw the signings of Nate Robinson, J.J. Hickson and Randy Foye, the Nuggets have generally built their team via trade and the draft, choosing only to retain their own players in the free agent market. This coming offseason however, they have the room to make a significant change to the roster if they choose.

Side note: As always, for any cap discussion I encourage you to research at Larry Coon's CBA FAQ. It the most comprehensive resource out there and one I use on a regular basis.

Denver has just two potential free agents of note (with apologies to Mike Miller): D.J. Augustin and Darrell Arthur. In most years this would mean the team would be fairly cash strapped, given the large amount of roster spots already eating away at cap space, but the Nuggets collection of rookie deals, bargain contracts and league minimums coupled with the continuous rapid rise of the salary cap thanks to the new TV deal leave them with ample space to make moves in free agency or easily secure their two potential free agents. In fact, it's completely feasible for the Nuggets to re-sign both Arthur and Augustin and still sign another solid rotation player. They could also elect to let both players walk (neither is irreplaceable after all) and go big game hunting with a max contract. Also intriguing is Denver will be in danger of missing the cap floor if they sit free agency out, though the penalties for such are relatively insignificant.

Sign no one, bring on three rookies!

If the salary cap lands at the anticipated $90 million mark for next season, the Nuggets will have around $33 million to play with, depending on what Arthur does that could drop to anywhere from $30 million to $28 million, but more on that later. The least likely scenario to occur would be Denver filling it's three empty roster spots with their three first round picks. For starters, the Nuggets already feature four players (Emmanuel Mudiay, Nikola Jokic, Gary Harris and Jusuf Nurkic) that are under the age of twenty-two, but also if the Nuggets stay where they are currently projected to be in the draft the sum of the rookie contracts is $5.7 million for next season, leaving the Nuggets well short of the anticipated cap floor. Again, the penalty for missing the floor is relatively insignificant, but it amounts to giving away free money to players currently on the roster when you could have spent it on getting more and/or better talent.  Coach Michael Malone certainly didn't think it was likely the roster would stay virtually the same this offseason when he discussed it in this season's exit interview either. Simply put, not happening, let's move on.

Bring back DA and D.J., maybe sign another veteran

This is a much more likely scenario. In fact it's probably the most likely. The Nuggets have three roster spots instantly available if (and for the purpose of this discussion we'll just assume when) Arthur opts out of his contract. Both DA and D.J. have voiced a desire to return to Denver and the Nuggets certainly have the cap room to do so. They also have the flexibility to make two additional roster spots available if they need to by waiving Jakarr Sampson or/and Axel Toupane, both of whom are on non-guaranteed deals. This is potentially significant with the possibility of as many as three first round draft picks also being added to the roster. Arthur and Augustin plus the $5.7 million worth of rookie deals could get the Nuggets pretty close to the cap floor as well, potentially even right at it.

Arthur is likely to cash in on his solid season. With the cap rising and the deal he signed last season, he's in line to more than double his salary if he opts out (he's hinted toward going that direction). DA was a vital part of the Nuggets rotation last season, though with the influx of young bigs and draft picks, minutes and wins could be hard to come by in the coming season. In our Year in Review series I made a comparison to what Brandan Wright signed for last season and what DA could potentially get this offseason, which worked out to about $7.5 million a season, or a $4.7 million raise in Arthur's case. Whether it's Wright or Ed Davis or Aron Baynes, $6 million per, which works out to about $7.5 million per after adjusting for the anticipated cap inflation, was the going rate for serviceable back up bigs in the Association last season and there's no reason to think that will change.

Augustin is a bit tougher to peg down. Teams were kind of all over the board last season with their back up point guards. There's the Pacers, who threw out $7 million a season for Rodney Stuckey, but also the Cavaliers, who brought back Mo Williams at a meager $1.2 million per season. Perhaps the best parallel to draw would be what the Nuggets did themselves, as they handed out $4.5 million a year to Jameer Nelson, but Nelson was also a few years older than Augustin when he signed. If you split the difference between Stuckey and Nelson's contract you get $5.8 million, which if you adjust for cap inflation comes to right around $7 million. When it's all said and done, it's not out of the realm of possibility for Augustin to end up getting a three year $21 million deal just like Stuckey. If Denver were to sign him for that, plus Arthur at $7.5 million per season plus three rookies they would have a full roster and just barely sneak in above the cap floor.

However, let's say they unload one of those 1st rounders for rights to some Spanish guy and a 1st round pick that's 1-29 protected until the apocalypse. It would leave the Nuggets with an open roster spot and probably somewhere in the range of $10 million to play with, which is basically borderline starter/very solid bench player money next season. There's some intriguing wing possibilities you could fit in that cap space (not necessarily using all $10 million) guys like Evan Turner or Courtney Lee and some bigs like Joakim Noah and Al Jefferson you could kick the tires on, the entirety of the Washington Wizards and Miami Heat will be available too. There's several ways the Nuggets could go when it comes to adding a veteran piece, but bringing back their own guys, as they've been shown to do, and adding a rotational player on a short term deal makes a lot of sense.

Go BIG!!!

The Nuggets could of course try to dip their toes into the max deal department this offseason as well. If they renounced Arthur's bird rights, and Augustin's early bird rights and cut Sampson and Toupane, the Nuggets would be well within the max salary range. Even Kevin Durant could get the same deal from the Nuggets that every other team with the requisite cap space not named the Thunder can offer him. However, the story is long told and played out about the difficulty of luring free agents to the Rocky Mountains. Durant's not coming, and likely neither are the other guys who can get max offers from any other team in the Association, guys like Hassan Whiteside, Al Horford, DeMar DeRozan or Mike Conley.

If the Nuggets wanted to make a big free agent splash they'd likely have to overpay. They'd need to chase one of those players who's just outside the guaranteed max talent, which can be a rather risky situation that ends up with a decent player at best riding along for years on an albatross of a contract just because Kiki Vandewheghe wanted to make a splash and thought three first round picks and more money than he could fit in a Brinks truck was a good idea to give up for Kenyon Martin...but I digress. Dwight Howard, Rajon Rondo maybe even Jordan Clarkson, those are the types of guys the Nuggets would have to look at giving max or near max deals to lure to Denver, not exactly the blueprint for championship team building. If they were going to go in the big free agent direction, Nicolas Batum could be a target. He had a nice bounce back year for the Charlotte Hornets and his combination of shooting and defense is something Denver has been sorely lacking.

Ultimately, it's extremely difficult to predict how Denver will approach free agency because there is so much potential for the roster to be altered through the draft process. Whether that means the Nuggets landing a top three pick in the lottery, moving up by combining their picks into a deal on draft night or using a combination of picks and current players to acquire veteran talent, it's likely that their cap situation will change somehow before the free agency period begins. Still, the rapid cap expansion alone will almost certainly guarantee them to be players in some way in the free agent market. Without a doubt, the decision makers over at the Pepsi Center are considering this now as the free agency period promises to be unlike any other the Nuggets have seen for a very long time.