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Next moves for the Nuggets: How can Denver rise?

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Though the second-round playoff loss in Game 7 is a short-term disappointment for the Denver Nuggets, this season should be remembered for earning 54 regular-season wins while cementing a roster ready for sustainable success in the future.

With the Nuggets now eliminated from the postseason, let's look ahead to the free-agency, draft and trade decisions facing Denver this offseason.

Get more team-by-team NBA offseason guides here


Addition without subtraction to the roster

It's possible for this Denver roster to improve without any offseason additions. The Nuggets -- No. 4 league-wide in average age and the youngest team in the playoffs -- will return their starting five, as well as key reserves Monte Morris, Malik Beasley, Torrey Craig and Mason Plumlee.

The team will also welcome the return of lottery pick Michael Porter Jr., who took a redshirt year while recovering from lumbar spine surgery in July. Entering his freshman year at Missouri in 2017, ESPN had projected the forward as the No. 2 pick in the draft. After missing all but three games his freshman year and having his medicals red-flagged before the draft, Porter slid to the Nuggets at No. 14.

So a team that won 50-plus games this season and was one win away from the conference semifinals now adds a high-upside lottery pick to possibly replace restricted free agent Trey Lyles.


The rookie extensions and finances in 2020

There's a reason Paul Millsap and Plumlee were signed to three-year contracts in 2017. Both players' salaries expire after the 2019-20 season, aligning with the restricted free agencies of Jamal Murray, Beasley and Juan Hernangomez. (That is also when Craig is set to become a restricted free agent.) Had Millsap and Plumlee been under contract through 2020-21, the Nuggets would have had over $100 million in committed salary before factoring in new deals for Murray, Beasley and Craig. The Nuggets would certainly have been a candidate to be in the luxury tax for the first time since 2009-10.

Now looking ahead to the summer of 2020, Denver will have $70 million tied up in six players -- Nikola Jokic, Gary Harris, Will Barton, Morris, Porter and Jarred Vanderbilt. That committed salary for 2020-21 is also $70 million below the luxury tax. Denver will need to decide this offseason if it's best to agree to new contracts for Murray and Beasley early or hold off until next July. Both players, along with Hernangomez, can be extended up until Oct. 21.

Teams such as Denver have an advantage waiting to re-sign players they selected in the 2016 draft. Because Murray, Beasley and Hernangomez were signed under the 2011 CBA, their free-agent cap holds in 2020 are significantly lower than that of a player selected last year. This minor loophole has teams taking a conservative approach when it comes to extensions. Unless Murray and Beasley can be inked to team-friendly deals -- think $15 million to $16 million for Murray, $8 million to $10 million for Beasley -- that conservative approach should apply to Denver as well.

Holding off would give the Nuggets the option of creating up to $35 million to go out and sign a power forward in 2020. In this scenario, Denver would renounce the cap holds for Millsap, Plumlee and Hernangomez and also trade Barton. Remember, the Nuggets will have a void at power forward with Millsap and Plumlee set to be free agents -- unless Porter shows he's ready to be a starter.

However, there is a danger in playing the waiting game until 2020. Though the Nuggets are protected by restricted free agency, both Murray and Beasley could see offer sheets that will be more lucrative than what they would agree to on an extension now.


Summer contract breakdown

Unlike last July, when Denver traded veterans Darrell Arthur, Wilson Chandler and Kenneth Faried as a salary dump, the lone decision this offseason required to stay under the luxury tax is the future of Lyles, a restricted free agent.

With $120.7 million in committed salary, including the $30.35 million Millsap team option, Denver is $10.5 million under the tax with three roster spots open. Count the $10 million hold for Lyles and that number shrinks to $500,000. If Lyles is not brought back, Denver will have the $9.2 million midlevel and $3.6 million biannual exceptions available. However, using both would put the team in the luxury tax.

Resources available to build the roster

  • Cash to buy draft picks

  • The health of Porter

  • Own free agents

  • Cap exceptions: tax midlevel


Dates to watch

• After Lyles appeared in only three playoff games, Denver has until June 29 to tender him a $4.6 million one-year qualifying offer. Though there is little risk in putting the restricted tag on Lyles, signing the forward or matching an offer sheet in the $8 million to $10 million range would put the Nuggets in danger of falling into the luxury tax. Denver will have until July 13 to pull the offer without the approval of Lyles.

• Don't let the 12.6 PPG and 7.2 RPG fool you when it comes to what type of impact Millsap has had on the Nuggets this season. The veteran ranks No. 3 among all power forwards (behind Giannis Antetokounmpo and Anthony Davis) in real plus-minus. The on-court value of Millsap, inconsistent play of Lyles and uncertainty with Porter should lead to Denver exercising Millsap's $30.15 million team option. Declining the option and not bringing back Lyles would leave the Nuggets with only $17.5 million in cap space to find a starting power forward in free agency.


Restrictions

• Until June 30, Denver can't send out a first-round pick sooner than that of 2021. Starting July 1, the Nuggets are free to trade a 2020 first-rounder.

• The Nuggets are restricted to signing former first-round pick Tyler Lydon to a contract that cannot exceed $2.19 million. Lydon had his 2019-20 team option declined, and the CBA prohibits the Nuggets from offering him a contract that is more than his 2019-20 salary.


Extension candidates

Outside of the three rookie-extension candidates, Plumlee also is extension-eligible. Going into his last season, Plumlee can be extended up to 120 percent of his $14 million contract.

Expect the team to pass on a new contract for Plumlee.


The draft assets

Past trades leave Denver without a draft pick in June.

For the team to get into the second round, Denver would need to buy a pick (using up to $5.2 million) or trade a future second-rounder (starting in 2023).