Carmelo Anthony Trade Rumors: Why Melo Can't Pass Up Signing An Extension Now

Dmitriy IoselevichSenior Analyst IIIJanuary 7, 2011

LOS ANGELES, CA - JANUARY 05:  Carmelo Anthony #15 of the Denver Nuggets reacts in the game against the Los Angeles Clippers at Staples Center on January 5, 2011  in Los Angeles, California.  The Clippers won 106-93.  NOTE TO USER: User expressly acknowledges and agrees that, by downloading and or using this photograph, User is consenting to the terms and conditions of the Getty Images License Agreement.  (Photo by Stephen Dunn/Getty Images)
Stephen Dunn/Getty Images

Carmelo Anthony has all but guaranteed that his future lies with a team other than the Denver Nuggets, prompting a series of trade discussions about where he might land.

If the Nuggets don't trade Anthony before the NBA trade deadline, then they run the risk of losing their star player for nothing. But Anthony has indicated that he would only sign a contract extension with the New York Knicks, saying that he would opt out of his contract and become a free agent if dealt to another team. This has limited the number of potential suitors for the star, and left the Nuggets sorting through one-sided deals that made little sense for Denver.

But it may be to Anthony's advantage to sign an extension with whichever team acquires him, regardless of whether it's where he actually wants it to be. It may even be in his best interest to stay in Denver.

Under the current rules of the collective bargaining agreement, the most a player of Anthony's experience can earn as a free agent is $11 million, or 30 percent of the salary cap (2010-11: $17,413,200 million), whichever is greater. He could sign a six-year deal and earn a maximum raise of 10.5 percent of his first-year salary each season. The total deal would be worth over $110 million as long as the NBA's salary cap continues to rise.

However, there is one huge problem with this scenario: the current CBA is about to expire.

The league has publicly stated that it wants to cut costs by limiting maximum salaries, possibly to as low as $12 million a season. If that happens, Anthony would lose out on millions of dollars. 

There is an obvious alternative for Anthony here and that is to accept the Nuggets' three-year, $65 million extension. He would make $18.5 million next season in the final year of his current contract, and then $65 million over the next three years. That's $83.5 million in four years, versus a possible $72 million in six years.

Anthony may have winning as his No. 1 priority, but there's no way he can ignore that kind of cash. He could also, of course, accept a trade and sign a contract extension with his new team without ever becoming a free agent.

But the Nuggets hold most of the leverage here because they can stubbornly refuse to trade Anthony for below market value, forcing him to accept Denver's contract offer. 

The Nuggets aren't good enough to compete right now even with Anthony in uniform, so it's unlikely they'll hold on to him if they have a decent chance to improve the team long-term. But one thing should be for certain, and that is that Anthony will not be a free agent this summer.

He has to sign a contract extension before the current CBA runs out or he would be flushing a gigantic paycheck down the toilet. Even LeBron James couldn't ignore those dollar signs.