There is no non-playoff team that enters the offseason with more pressure than the Denver Nuggets.
After finishing ninth in the Western Conference in 2016-17, they were expected to be a playoff team this season. Despite a six-game improvement, Denver finished in the lottery for a fifth consecutive year.
Let's look ahead to the free agency, draft and trade decisions facing Denver this offseason, including big contract decisions on Nikola Jokic and Will Barton.
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The Jokic contract
Why would Denver decline a $1.5 million team option on Jokic and increase his annual salary to $25 million in the same year? Blame the rules of the CBA and the Nuggets' strong scouting department.
Selected in the second round (No. 41 overall), Jokic signed a four-year contract with a team option after the third season. The option protected the Nuggets from having Jokic enter free agency in 2019 unrestricted. By Denver declining the option, Jokic would become restricted now, with the Nuggets having the right to match any offer from an opposing team. Bringing back Jokic on the $1.5 million salary carries the risk of losing him outright in 2019.
Could Denver bring back Jokic on the $1.5 million salary with an understanding that the center will be rewarded in 2019?
Perhaps, but remember that Denver is under pressure to appear in the playoffs next season. Like all teams, the Nuggets will face some type of adversity next season, and not signing Jokic to a long-term deal when they had the opportunity would be a risk that management cannot afford to let happen.
Creating flexibility for Barton
Here comes the hard part for the Nuggets' front office: Come up with a plan to bring back sixth man (and occasional starter) Will Barton and not pay a substantial luxury-tax penalty. That, of course, is if Denver sees Barton as a priority and not a luxury.
On paper, it looks like Barton will not be in a Nuggets uniform next year. A Jokic raise combined with $105 million in guaranteed salaries will see the Nuggets with $135 million committed -- $12 million above the luxury tax and a penalty of $21 million.
Signing Barton to a deal that pays $10 million in the first year (a starting number he turned down in extension talks) would cost Denver an additional $30 million in tax penalties, and the total roster cost would balloon to $198 million, a hefty figure for a team that missed the playoffs.
How the Nuggets create flexibility will come down to finding a home for one of their expiring contracts: Kenneth Faried, Wilson Chandler and Darrell Arthur (or hope that Arthur opts out of his contract for next season).
Denver will need to gauge the market from now until free agency regarding the $13.7 million expiring contract of Faried. The signing of Paul Millsap, trade for Trey Lyles and versatility of Mason Plumlee have left Faried with no role on the team.
With Chandler, Denver would be better off if the small forward opted into his $12.8 million deal and the team could use his contract to bring back assets in a trade. Chandler returning also would protect the Nuggets if they cannot sign Barton.
Don't panic about future finances
If the Nuggets manage their books the right way, 2018-19 will likely be the lone year paying a possible luxury tax.
Despite the projected $130 million-plus payroll based on a new Jokic contract, Denver has financial flexibility in 2019-20, when $34 million in salary from Chandler, Faried and Arthur expires. The Nuggets also have a $30 million team option on Millsap that year.
Here is what the future finances in Denver project to be with Jokic signed to a max contract and Barton retained at a $10 million salary.
Summer cap breakdown
Denver now shifts to a team trying to stay below the luxury tax. Since 2002-03, Denver has been in the tax only three times (2006-07, 2007-08 and 2009-10). How Denver stays below the tax threshold will depend on Chandler or Arthur opting into their contracts or the seldom-used Faried being traded. All three players are entering the last year of their deals.
The Nuggets will likely have the $5.4 million taxpayer midlevel to use.
Dates to watch
The Nuggets have until June 24 to decline the team option on Jokic. Once they do, they will tender the center a $2.9 million qualifying offer, making him a restricted free agent.
Besides Jokic, Denver will play the waiting game when it comes to the player options for Chandler ($12.8 million) and Arthur ($7.4 million). Both players are likely to opt into their contracts before the June 29 deadline.
Extension-eligible candidates
The name to watch when it comes to a possible extension is Trey Lyles.
Still only 22 and having not scratched the surface of his potential, Lyles became part of the Nuggets' rotation in late November after seeing limited minutes to start the season. More of a stretch-4, Lyles posted a career high in true shooting (59.1 percent) while playing comparable minutes from his previous two seasons in Utah.
A potential financial crunch in 2018-19 should not dissuade Denver from exploring extension talks, since the team should have more flexibility in 2019.
Faried, Arthur and Chandler are also extension-eligible, though they will not receive new deals.
The draft assets
Denver would certainly trade a fifth straight appearance in the lottery for a first-round playoff exit, especially after winning 86 games in the previous two seasons.
The Nuggets' front office has been building the team in the draft, either in the first round (Gary Harris and Jamal Murray) or second (Jokic). Denver will add another lottery pick to its young core this offseason.
Here's how ESPN's Jonathan Givony and Mike Schmitz have Denver picking in the 2018 draft:
No. 14 (own): Miles Bridges | F | Michigan State
No. 43 (from Clippers): Rawle Alkins | SG | Arizona
No. 58 (from Warriors): Kenrich Williams | PF | TCU
The Nuggets own all of their future picks.