How Much More Can the Denver Nuggets Spend?

It is frustrating to see the other teams in the Western Conference add player after player while the Denver Nuggets appear to be doing nothing, but I think we can expect Denver to jump into the fray at some point and reel in their own big fish.

Let’s start off with some more NBA accounting. Henry Abbott at TrueHoop has reported that each team will receive a payment from the league escrow account.

What is the escrow account you ask?

A percentage of each player’s salary (for 2008-09 it was nine percent according to Larry Coon’s Salary Cap FAQ page) is deposited into an escrow account. At the end of the season that money is either returned to the players or disbursed to the teams. The determining factor of who gets the money is the ratio of player salaries and benefits to Basketball Related Income. Typically the escrow money is returned to the players, but this season the ratio dictated that the money will go to the owners.

As a result every team will receive a cash payment of $6,467,847 out of the escrow account. That is a significant chunk of change.

Keep in mind the luxury tax money that is collected from the big salary teams gets redistributed amongst the non tax paying teams. The result is another $2,911,756 payout. That means that a non tax paying team like Denver will receive a grand total of $9,379,603 in cash by the end of July. Now add in the Nuggets’ nine home playoff games as opposed to the regular two and the bottom line for 2008-09 gets much better for Stan Kroenke.

The question then becomes what is Kroenke willing to spend?

Let us allow history to be our guide.

In 2007-08 Denver paid out $81,437,079 million in team salary and at that time the luxury tax limit was $68,865,000. The result was that between their payroll and $13,572,079 in tax payments the Nuggets shelled out a grand total of $95,009,158 on players.

Can we assume that Kroenke is willing to spend $95 million again? What we as fans have going in our favor is the 2007-08 team was completely unproven where this team was able to knock on the door to the NBA Finals. I believe Kroenke will open up his pocketbook again to improve this team.

Using the $95 million expenditure in salary and tax payments from 2007-08 as an example we can surmise that the Nuggets payroll could be allowed to get as high as $82.46 million (at that salary level the tax payment would equal $12.54 million and thus a total outlay of $95 million). Right now the Nuggets are sitting at a team salary of $76.7 million (including Linas Kleiza’s $2.7 million qualifying offer. That leaves room for almost another $6 million in salary to be added in our $95 million scenario.

Now add in that extra $9.4 million the league is handing out as discussed above and perhaps it is possible Kroenke will green light a team payroll even higher than the $82.46 million from our example.

With only $2.1 million of the mid level exception left over after signing Chris Andersen and the biannual exception starting at $1.99 million remaining to be spent on free agents it would appear that if Denver wants to make a splash, they will probably have to use their trade exception(s).

It is certainly possible that the Nuggets sign a couple of minimum salary guys and call it good, but from what I know about Stan Kroenke, we should expect Denver to bring in at least one more solid player in order to hang with the Lakers, Spurs and Mavericks.

  • TheseNuggs

    Great follow up article sounds every bit of what I had brought up in my comments in roundballs last article. I agree completely I had also mentioned that nugget fans need to look at the recent past of what management has done and my prediction also leads to one maybe two free agents at a pretty low cost still pulling for channing frye and then maybe a guard of some sort marquis daniels was brought up earlier as well as von wafer id like either one of them. im just afraid with von wafer Karl wouldnt give him the opprtunity to play much judging by his last stint in denver but i do think hed be a great addition. also a paul millsap or preferably david lee still are my bids for a great young talent to fill a hole but those are lofty goals. Keep the articles coming! Love reading about the future of this promising nugget team thats been at an all time high.

  • TheseNuggs

    also nugget fans need to calm down i mean realy everyone getting all upset about all these free agents going to other teams but honestly most of these people i would not have wanted on denver either because it would not be a good fit or just too much money for players well into there 30′s. Just throwing it out there.

  • runningdonut

    Nuggets are fine. Not signing Birdman at 12:01 wednesday would have been cause for concern, but that didn’t happen and our guys know what they are doing. Dahntay is not in the long term plans and if you watch the WCF isn’t a next level piece. Glad he cashed in though, good for him. Sonny will at least get a fair shot now and like Jeremy said, we can go get a guy like Ime Udoka for near the minimum to provide depth at SG.

    The next move I would love to see is to try to land Channing Frye with that remaining MLE. For that price his shooting would compliment Kenyon’s inability to shoot nicely. Melo and Nene would benefit greatly for anymore spacing he could create. I also think Leon Powe is worth taking a flier on as he will be back strong form injury. Still, the $2.1 mil left over is not a lot and when you consider what Jones just got, we’ll need to find someone who wants to come here for more than the money (winning and/or playing time).

  • TheseNuggs

    anyone but Ime Udoka seriously iv had enough of that guy he thinks he can shoot threes and he cant is defense is overrated. and hes not athletic enough to play the 3 or the 2 and too small for the 4 essentialy your getting someone a little better defensively then klieza and alot worst offensively.

  • nugdog

    honestly the Nuggets don’t need anymore talent on their team. They are still one of the most talented rosters in the league, they don’t need to complicate things. They didn’t lose the WCF because they weren’t stacked enough, they lost it because they were outcoached and a lack of mental toughness. I would be happy to see them stand pat with their roster and contend again next year. Obviously they won’t fire Karl, and they can’t because they are so close to being a serious contender and that would set them back, but he is the biggest problem here.

  • KC Gunner

    This story is likely relevant, one way or another, to how much Kroenke might spend on the Nuggets this year:

    “Arsenal issued a statement saying Kroenke, who joined the club’s board last year and became the largest shareholder in May, paid £1.5m ($2.44 million) for another 160 shares at £5,200 ($8,500) each.”
    http://www.guardian.co.uk/football/2009/jul/10/stan-kroenke-increases-arsenal-stake

    Either that roughly $2.5M he pumped into Arsenal indicates he’s flush with cash and happy to spend at the moment, despite the general economy being in the toilet, or that $2.5M into Arsenal will depress his further spending on the Nuggets. Time will tell, but I suspect it is perhaps the former.

  • TheseNuggs

    Depressing Nugget News today according to yahoo! sports is that both grant hill and channing frye have signed with the Suns. With frye only taking in 3.8 million over two years come on now. thats a huge steal for the suns. These two players were really the only people nugget fans had actually heard about being on the nuggets radar and we lose them both today.
    hmm… one must begin to wonder where the management is lately. Especially since from what i heard I woulda said that the likely hood of getting frye was particularly high.

  • TheseNuggs

    I had also forgot to mention that it appears the same teams once again are making pushes to get better with the Orlando Magic signing Brandon Bass to a 4 year 18 million dollar deal.

  • drollins92

    First off I don’t believe the Nuggets issue in the Western Finals were coaching. I truly believe it was Nene he played soft and cried to much. Nuggets need to make something happen before next season. All the top teams in the west have made there teams better and we didn’t. I like the re-signing of The Bird Man. But we need more way more. Nene is weak and has no heart, for his size he should be a monster and thats far from what he is.. I would trade his soft self and try and get someone with size and heart.. He let the Lakers big miss use him and to be honest he really didn’t have a good playoff series granted he had a couple ok games but that’s it. If we don’t strive to make something happen this off season we will be back to a 8th seed or less. The coach can’t make a player play with heart so don’t blame Karl. We got a center that has no tuff ness in his bones and his heart pumps kool aid. The Spurs and Dallas made there teams better and the Lakers were already tuff now there even better with artest. What did we do lose our best defender off the ball to the Pacers. Yet to even make a push at someone who can help us get over the top. The owner better get off his high horse and try to make his hot NBA team better and less focus on that soccer team.. The fans of Denver deserve that.

  • bolvbball

    I think the Nuggets should focus on trading KMart first chance they get for a younger less thuggish-minded player.As long as KMart is a starter the Nuggets will never win a championship.