It’s widely assumed that the Denver Nuggets will deal Kenneth Faried to avoid the luxury tax in 2018-19, but the team actually has more options than it seems.
The Denver Nuggets have a problem. After star center Nikola Jokic re-signs this offseason, the team will be well over the NBA’s salary cap and into the murky waters of the league’s luxury tax.
The long-running assumption has been that the Nuggets would avoid the tax by offloading Kenneth Faried and his bloated $13.8 million salary in 2018-19.
That assumption makes sense. Faried was out of the rotation for most of last season. He’s massively overcompensated, completely unneeded and has just one year remaining on his deal (far more palatable to acquiring teams than the likes of Mason Plumlee).
But what if that assumption is wrong?
Nuggets president Josh Kroenke says team not afraid to pay luxury tax - https://t.co/UI3pIPaATC pic.twitter.com/hwvNUG573m
— DNVR Sports (@DNVR_Sports) June 7, 2018
The first possibility for Denver would be to suck it up and pay the tax. Nuggets president Josh Kroenke claims the team would be willing to do that.
Maybe Kroenke’s telling the truth, but this screams leverage play. Kroenke is announcing to the world, “We’ll do it. I swear we’ll do it. We don’t really need to trade Faried.”
Consider me dubious. If the Nuggets are a championship contender in three years, I’m sure ownership would be willing to pay the tax, but for this team, which will be lucky to grab home-court advantage in the first round of playoffs? I have my doubts.
Crazy cap thing I found about the #Nuggets:
— T.J. McBride (@TJMcBrideNBA) June 6, 2018
If Arthur & Chandler opt in & Jokic gets his max, Denver would be $9,124,842 into the tax.
If Faried is stretched & waived, the savings for next year would be $9,176,030.
That would put Denver $51,118 under the tax.
This suggestion, from T.J. McBride of Mile High Sports, seems more plausible. Though this math does not include the salary of Denver’s first round pick in the 2018 NBA Draft, it demonstrates that the Nuggets could avoid (or at least massively shrink) luxury tax payment without sacrificing assets to dump Faried.
The drawback of waiving and stretching Faried would be the cap hit Denver would incur for each of the next three years. Roughly $4.5 million of Denver’s cap would be tied up in dead money. Should Denver need to remove that money a year or two down the line, the team would have no recourse.
The flip side of that is that Denver’s cap sheet is relatively clean going forward. After 2018-19, dodging the luxury tax will not be a concern again for several years. The practical impact of Faried’s stretched money would likely be negligible.
More from Denver Nuggets
- This overlooked skill proves that Nikola Jokic is underrated defensively
- Why the loss of impact players won’t damage Denver’s repeat title hopes
- Has Denver’s risky offseason hurt their repeat title hopes?
- The Nuggets’ sneaky great draft bolsters their championship roster
- Despite a short series, the Denver Nuggets and Miami Heat saved the NBA
Denver’s final option would be to trade someone else. There’s Plumlee, whose deal is too long and would be too costly to move. There’s Paul Millsap and Gary Harris, who are too essential to deal. Then there’s Wilson Chandler.
Chandler’s good and important, but not too good or too important. Chandler has just one year remaining on his current contract, a $12.8 million player option for 2018-19. Assuming Chandler opts in (if he opts out, those tax concerns are alleviated by letting him walk), the Nuggets should consider trading him.
Chandler is currently the team’s starting (and only) small forward, but he won’t be on the next great Nuggets team. They are building that team now, and Chandler can help in his own way.
A trade of Chandler would not bring back some mind-blowing haul, but it’d bring something. Maybe that something helps the Nuggets trade up in the 2018 NBA Draft for a long-term answer on the wing. If it doesn’t, if the return for Chandler is minimal, trading him could still be worthwhile.
Simply by avoiding sacrificing the assets it would take to offload Faried, the Nuggets would be bettering the franchise’s outlook. Meanwhile, a Chandler trade would eliminate the drawbacks of paying the tax or spreading Faried’s cap hit across three years.
Next: 2018 NBA Mock Draft - Final edition
At this stage, the most likely outcome in the tax-avoidance saga seems to be the Nuggets dealing Faried. However, the assumption that the Nuggets will trade Faried is unfounded.