NBA Roundtable

2010 Tax Concerns: Denver Nuggets

In Free Agency, General NBA, Trade Talk on April 19, 2010 at 7:21 pm

Denver Nuggets Salaries

Contracts Above $5 Million

  • Carmelo Anthony – $17.15 million
  • Kenyon Martin – $16.8 million
  • Chauncey Billups – $13.15 million
  • Nene – $11.36 million
  • JR Smith – $6.76 million

A sub-total of $65.22 million for five players. Kenyon Martin and JR Smith will both be entering the final year of their deals. Carmelo Anthony, Chauncey Billups and Nene each have two seasons left on their contracts. Both Melo and Nene have opt out clauses prior to their final seasons. Billups’ final year is partially guaranteed ($3.7 million of $14.2 million).

Rest Of Team’s Salaries

  • Chris Andersen – $3.94 million
  • Arron Afflalo – $1.96 million
  • Renaldo Balkman – $1.67 million
  • Ty Lawson – $1.55 million

A sub-total of $9.12 million for four players. Chris Andersen has four years left on his contract. Balkman has three years left on his deal — I missed that contract, appearantly Balkman signed a five million three year contract extension late last summer — while Afflalo and Lawson are both on their rookie scale contracts. Afflalo’s deal is up after the following summer (2011) and he will be due for a pay increase (probably $3-4 million per annum).

Other Costs

  • No Draft Pick — sent to Memphis (Steven Hunter trade) + Bobcats protected pick sent to Minnesota (Ty Lawson trade)
  • Minimum Roster Size — League mandates say that a team must have a minimum of 13 bodies on their roster. Denver only has nine players so they’ll need to sign at least four more players. Let’s say they are all veterans and come with a total cost of $3.4 million.

A sub-total of $3.4 million.

Which gives us an overall total of $77.74 million.

Luxury Tax Threshold

David Stern recently announced

NBA commissioner David Stern said on Friday that the league is projecting the cap to come in at about $56.1 million. The actual number won’t be determined until early July, before teams can begin officially signing players.

Though that figure would still be lower than this season’s $57.7 million cap, it’s far better than estimates from last summer, when the league sent a memo to teams warning them of a potential sharp drop to between $50.4 million to $53.6 million.

The luxury tax threshold for a $56.1 million cap is $68 million.

Nuggets vs Luxury Tax Line

That puts the Nuggets over the luxury tax threshold hold by $9.75 million.

Summer Options

Denver Nuggets’ owner Stan Kroenke has been reluctant to spend money on the Nuggets in recent seasons after a bad (financial + lack of success) experience after acquiring Allen Iverson. That stance is likely to continue this summer.

The Nuggets are unlikely to spend their MLE this summer given their financial situation. They will rely on minimum contract players to flesh out their roster.

The nine Nuggets players already on their books could compromise their first choice rotation next season. Add another wing (like Joey Graham), a third string point guard (like Anthony Carter), another backup big men (Johan Petro) or two (Malik Allen) and they’ll be ready to go. In other words, we’ll see an almost identical roster to this season’s Nuggets.

So, no significant free agent additions + no draft picks + a lack of trade assets.

Denver’s only hope for progress is internal development, player development, and when we talk about about we are really only talking about one player – JR Smith – without JR Smith taking a large leap forward it is hard to take the Nuggets seriously as a contender next season.

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