NUGGETS

Kroenkes green light going into NBA luxury tax for a contender

May 2, 2022, 2:43 PM
Nikola Jokic and Stan Kroenke...
Photo by AAron Ontiveroz/MediaNews Group/The Denver Post via Getty Images

The Denver Nuggets are about to get a lot more expensive next season, running into the luxury tax for the first time in over a decade.

Michael Porter Jr.’s max contract extension will kick in next fall, and the following fall, Nikola Jokic will sign a super-max contract extension, which he said he would sign once the Nuggets offer it to him. What that means for Kroenke Sports & Entertainment, the owner of the team, is a lot of money.

On top of the money, KSE commits to players if they go over a specific marker, projected to be $149 million, they have to pay a tax that gets distributed to all the teams who remain below that threshold.

The Nuggets already have $155 million committed to 10 players for 2022-23, meaning unless they start dumping assets to get under the cap, they’ll be paying a penalty between $1.50 and $4.75 per dollar above the threshold, depending on how much they spend.

“I think ownership has been consistent. If the team is good enough, they’ll pay accordingly,” President of Basketball Operations Tim Connelly said. “I don’t think that’ll be an issue moving forward. We’re getting expensive. It’s a blessing and a curse and you get expensive because you’re paying really, really good players but these numbers elevate pretty quickly. They’re only going to elevate more as we move forward. So I think ownership is firmly aware of financial where we might be and how that could impact our team.”

Connelly is eluding to the tax compounding for repeat offenders. If the Nuggets continue to spend above the threshold, which is likely with three max contract players, one of which is a super-max, the Nuggets will have to pay a higher tax in the future.

We’ll see what the Nuggets spend. Most teams will pay for a contender, but what is a contender? The Nuggets have won five playoff games in the past two seasons, but when fully healthy, they have one of the strongest cores. Porter and Jamal Murray are expected to be back for opening night in 2022-23.

“We have an ownership group that understands what it takes to achieve that level of success,” Connelly said about titles.

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