Denver Nuggets: Evaluating the cost of dumping salary
By Max Carlin
The Denver Nuggets need to cut salary with Nikola Jokic’s next contract looming, so let’s look to recent history to approximate what it’ll cost.
No team hands out a contract expecting it to be a burden. That unfortunate outcome sometimes happens, however. Teams find themselves with bloated deals for unproductive players soaking up precious salary cap space.
Often, they can simply accept their mistakes, punt on that salary cap space and wait for the deal to expire. Other times, external factors, like the luxury tax, work their ways in and impose consequences that a team cannot accept idly.
In those cases, action is necessary. The team must find a way out of some of that ill-apportioned money. In years and Collective Bargaining Agreements past, teams have had several avenues out of that money, like the Amnesty provision of the 2005 and 2011 CBAs.
Today, there are far fewer options. If a team is comfortable occupying cap space across several years, there is the Stretch provision. However, the Stretch provision is not viable when a team must clear a lot of salary, because teams cannot afford to sacrifice that much cap space for that long. The only option, therefore, is the salary dump.
This is the position in which the Denver Nuggets find themselves.
You’ll find an in-depth explanation here, but for the purposes of this post, all you have to know is that the Nuggets will have to cut roughly $12.5 million in salary by the end of next season. To ascertain what it will cost for the Nuggets to do so, let’s examine recent history.
Following the summer spending spree of 2016, cap space has been a rare commodity in the NBA. Therefore, there isn’t an abundance of recent salary dumps to consider, but there are a few.
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The most notable is probably the Los Angeles Lakers’ trade of Timofey Mozgov to the Brooklyn Nets. The Lakers sent Mozgov’s wretched three years and $48 million along with D’Angelo Russell to the Nets for Brook Lopez and the 27th pick (which became Kyle Kuzma).
Lopez and Movgov’s hefty 2017-18 salaries effectively cancel out, so the deal is best viewed as Russell and $32.7 million in dead money for the 27th overall pick. That there are real assets on both sides of this trade makes it a bit harder to evaluate, but stick with me.
Last year, the Chicago Bulls sold the 38th pick (Jordan Bell) to the Golden State Warriors for $3.5 million. According to this draft pick value chart devised by Nylon Calculus’ Nick Restifo (now of the Minnesota Timberwolves), the 27th pick is worth about 1.8 times the 38th pick, or about $6.3 million.
This math is rough, but by my estimation, Russell was the price for the Lakers to dump $39 million. Clearly, the Nets still valued Russell as the elite prospect he was coming out of the Ohio State University, because that’s a great deal of money to take on for one player.
At this year’s trade deadline, the Bulls and New Orleans Pelicans engaged in another salary dump, in the trade that sent Nikola Mirotic and a second-rounder to New Orleans for Omer Asik, Tony Allen, Jameer Nelson and a first.
The Bulls took on Asik’s $14.2 million in 2018-19 and 2019-20 salary and got a first round pick for their troubles. However, they also surrendered Mirotic, an excellent player (who proved invaluable in New Orleans’ playoff run). Here, there are simply too many variables to isolate the cost of dumping Asik’s money, but the general framework is 1.5 years of a cost-controlled contributor and $14.2 million in dead money for a first.
The only other big-money salary dump of the last year-plus was the Toronto Raptors’ trade of DeMarre Carroll, a first and a second to the Nets for Justin Hamilton, whose salary was immediately waived and stretched.
The Nets absorbed the $30.2 million remaining on the final two years of Carroll’s deal, while the Raptors swallowed Hamilton’s $3 million salary. Overall, the Nets took on $27.2 million for first and second round picks.
The key here is that the Nets probably didn’t view Carroll’s money as completely dead. Whereas the Asiks and Mozgovs of the world had no place on NBA basketball courts in 2018, Carroll did.
Carroll was a key veteran for the Nets in 2017-18, rebounding from two down years north of the border. Now, he might even be a positive asset for the Nets; Brooklyn’s gamble paid off. Ultimately, the Nets paid $27.2 million for a first, a second and a competent veteran presence.
There have been other minor salary dumps in recent history, like those of Josh McRoberts and Richard Jefferson, but nothing remotely close to what the Nuggets must undertake.
Luckily, there are several bad teams that will have cap space to burn in 2018-19, and the deadweight the Nuggets must shed pales in comparison to that which the Lakers and Raptors had to dump.
However, to clear the necessary salary (likely in the form of Kenneth Faried’s $13.8 million), the Nuggets will need to attach an asset. Judging by recent salary dumps, I would guess that the Nuggets will not have to surrender too much—something along the lines of two seconds or a recent first, like Malik Beasley, Tyler Lydon or Juan Hernangomez.
Next: 2018 NBA Mock Draft - Doncic still No. 1 in post-lottery edition
The Nuggets find themselves in an unenviable position in which no team wants or expects to find itself. However, while shedding salary is a must, Denver has ample time and assets to do so. So while the need to cut money should be on fans’ minds, it shouldn’t engender panic just yet.