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Where the Denver Nuggets stand heading into free agency

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A deeper look at Denver’s roster crunch following two first round draft selections

2020 NBA Draft Photo by Nathaniel S. Butler/NBAE via Getty Images

The Denver Nuggets are in a good place, but the finances are tight.

As the 2020 NBA Draft came to a close, the Nuggets made two first round selections, a surprising move for a roster in the middle of contending for their first championship in franchise history. The expectation was for the Nuggets to add players ready-made to help them achieve their goal. Instead, the Nuggets walked away with two 19-year-olds: Arizona big man Zeke Nnaji and New Zealand Breakers combo guard RJ Hampton.

It’s important to expect the unexpected from the Nuggets on draft night. Usually things work out for Tim Connelly, Calvin Booth, and the rest of the front office, but that doesn’t mean they shy away from taking chances. Nnaji and Hampton represent big swings in a draft filled with rotation caliber players with lower ceilings like Michigan State big man Xavier Tillman or TCU combo guard Desmond Bane.

The Nuggets like to live dangerously. They took a chance on Michael Porter Jr. and Bol Bol despite scary injury reports. They took a chance in 2017 by trading the opportunity to select good prospects in the lottery like Donovan Mitchell and Bam Adebayo and instead shooting the moon for OG Anunoby, only to miss out and select Tyler Lydon. In 2016, a year where the Nuggets had three first round selections and most believed they would offload at least one of those, they selected a prospect with all three picks, knowing that only one player had to pan out to make the decision worth it. It’s safe to say Jamal Murray panned out too.

So, it wasn’t a surprise that Nnaji and Hampton were the picks for the Nuggets at 22 and 24 respectively. The Nuggets were tied to Nnaji relatively early in the draft process as a player they had brought in for a workout. Hampton at 24 was more tricky because the Nuggets didn’t start with that pick, but they found a partner in the New Orleans Pelicans who would accept a 2023 lottery protected first round pick as compensation. The Nuggets happily selected Hampton, an elite high school prospect who fell down draft boards for one reason or another, similarly to Porter and Bol in previous drafts.

The two most interesting factors in Denver’s decision making are the age of the players selected and how those players affect the Nuggets approaching free agency.

Here’s where the Nuggets’ salary cap sheet stands heading into 2020 free agency:

2020-21 Denver Nuggets salary cap sheet

Visualizing Denver’s finances is made pretty easy using this format. Nnaji and Hampton each received the estimated salary projection for the 22nd and 24th draft selection respectively based on the NBA rookie scale contract system for 2020-21. Those are inexact but are right around that range.

As can be seen, Denver’s projected salary heading into the 2020 free agency period is roughly $103.8 million (highlighted in purple) which is technically below the salary cap. The Nuggets have to fill four roster spots to complete their full roster, and they have just under $29 million in luxury tax room to accomplish just that. It’s unclear whether Josh Kroenke and his family will be willing to pay the luxury tax following a pandemic, so let’s assume they would prefer not to do that.

After the 2019-20 season finished up in the bubble, a few things became clear to the Nuggets:

  • Jerami Grant became important to the future and needed to be re-signed after strong performances defending premiere wing players in Kawhi Leonard and LeBron James.
  • Michael Porter Jr. is ready to step into a starting role to help become the best player he can possibly be and give the Nuggets an extra dimension offensively.
  • The Nuggets have holes in their frontcourt to fill in order to compete with big teams like the Los Angeles Lakers.

The Nuggets will have a number of avenues to satisfy those requirements. Paul Millsap and Mason Plumlee remain competent pieces who can help the Nuggets win games going forward. Torrey Craig, a restricted free agent after the Nuggets extended a qualifying offer, has been a useful bench piece for three seasons and might still have a role in Denver if certain moves were to occur.

But beyond everything, the top priority in free agency will be to re-sign Jerami Grant.

The Nuggets understand just how important the 26-year-old has been and will be to the Nuggets going forward. While Porter, Jamal Murray, and Nikola Jokić grow accustomed to each other offensively, it’s important to bridge the gap between those three players defensively with length, athleticism, versatility, and defensive IQ. There is no player on the open market who blends those traits together while also being a useful offensive option.

The market for Grant is expected to be in the $12 million to $15 million range depending on the number of suitors and Denver’s willingness to sign the athletic forward to a big contract. For the sake of the conversation, let’s say the Nuggets settle on a four year, $54 million contract that pays Grant $14 million annually. That leaves the Nuggets with just under $15 million remaining to sign three players.

2020-21 Denver Nuggets salary cap sheet w/Grant signing

Barring a trade in the backcourt, that move solidifies Denver’s starting lineup, and it solidifies a seven rotation players: Murray, Harris, Porter, Grant, Jokić, Morris, and Barton. That leaves a backup forward spot, backup big man spot, and a wildcard spot open in my eyes. That last piece may or may not be a rotation piece.

The Nuggets could fill those three roster spots in a variety of ways. They could re-sign all three of Millsap, Plumlee, and Craig, solidifying the rotation with pieces the Nuggets are familiar with and feel good about their chances of being successful again. Denver could choose to re-sign just one or two of those players to fill out the rotation and keep the other piece or two cheap.

Or, the Nuggets could get creative with some free agents on the market.

The great thing about draft prospects is the fact that they possess relatively cheap contracts. Nnaji and Hampton will earn an estimated $3.8 million combined during the 2020-21 season. The bi-annual exception this year is worth $3.6 million, and though it can be split into pieces for multiple players, it usually yields lesser players than a draft pick ever could. The fact that Denver added two cost-controlled contracts to their salary cap for the next four years is the best thing the Nuggets could have possibly done to stay cost conscious as the rest of the team becomes expensive. It’s why paying Jerami Grant is viable and why the Jamal Murray extensive kicking in isn’t going to automatically push the Nuggets into the luxury tax.

If they Nuggets decide to bring back all three of Millsap, Plumlee, and Craig, they can probably do that.

2020-21 Denver Nuggets salary cap sheet w/everyone re-signing

In the above scenario, Denver’s projected luxury tax space would shrink closer to zero, but the Nuggets still wouldn’t be over the tax line and would actually have room to spare.

The Nuggets don’t have to bring everyone back though. If there’s a free agent or two that the Nuggets would prefer to add that could impact their roster in a positive way, then maybe the Nuggets decide to go that route. With Denver having both the mid-level exception (MLE) and bi-annual exception (BAE) at their disposal, the Nuggets can get creative in adding different pieces to the rotation if they so chose.

For example, the Nuggets could split the MLE between two players, add a third using the BAE, and stay below the tax just the same.

2020-21 Denver Nuggets salary cap sheet w/multiple free agent signings

Whatever the Nuggets decide to do, it’s important to note that they’re in a good position. They have difficult decisions if they want to make sweeping changes to their rotation or trade for a new starter at shooting guard. If the Nuggets just want to add pieces to the back end of their rotation and run out the same top seven rotation members that were mentioned above, then it’s easy to come up with scenarios where they do so effectively.

If the Nuggets decide to bring in a player for the full MLE, then things change. For now though, the Nuggets are in the exciting position of adding pieces to a championship contender that they might believe will help them increase their chances for a ring this season.

The additions of both Nnaji and Hampton changed the calculus for what Nuggets fans might expect in free agency. The Nuggets have additional money to offer one or more players because of the nature of the rookie scale, and this is the perfect time for the Nuggets to take advantage of their situation. There are free agents the Nuggets could add that would help them inch closer to a championship.

All that’s needed now is to pay the correct players.