How Aaron Gordon's $92M Contract Extension Impacts Nuggets' Salary Cap

Paul KasabianFeatured Columnist IISeptember 14, 2021

Denver Nuggets forward Aaron Gordon (50) in the second half of Game 3 of an NBA second-round playoff series Friday, June 11, 2021, in Denver. Phoenix won 116-102. (AP Photo/David Zalubowski)
AP Photo/David Zalubowski

The Denver Nuggets and forward Aaron Gordon agreed to a four-year, $92 million extension on Tuesday, per Shams Charania of Stadium and The Athletic.

Klutch Sports' Calvin Andrews, Gordon's agent, relayed the news to Charania.

The deal also includes a 2025-26 player option, per Charania. As for the yearly parameters, Yossi Gozlan of HoopsHype broke that down.

Yossi Gozlan @YossiGozlan

Gordon has $1M in unlikely incentives on his current deal, which is probably where the additional $4M comes in on the reported amount.

Entering this offseason, Gordon had one year and $16,409,091 remaining on a four-year, $84 million contract that he signed with the Orlando Magic in 2018.

The NBA salary cap for the 2021-22 season is set at $112.414 million. The latest update from HoopsHype had Denver with $134,092,669 committed to its 2021-22 cap, meaning that Denver is over the mark by $21,678,669.

Charania reported that the 2022-23 cap will be at $119 million. Denver had $103,668,890 committed to its 2022-23 cap before the Gordon deal, per HoopsHype. With Gordon's deal, they'd be at $123,368,890, or $4,368,890 over the cap.

The books look to be cleared up significantly in 2023-24. Jamal Murray ($33,833,400), Gordon ($21,300,000) and Monte Morris ($9,800,926) are the only significant commitments to Denver's cap that year. 

However, the Nuggets will assuredly want to re-sign reigning NBA MVP Nikola Jokic, whose current deal expires following the 2022-23 season. He's eligible for a massive supermax deal in 2022, per ESPN's Bobby Marks.

Bobby Marks @BobbyMarks42

The Nikola Jokic super max extension in 2022 is projected to be the largest contract in NBA history.<br><br>*2023-24: $42.6M<br>2024-25: $44.9M<br>2025-26: $48.2M<br>2026-27: $51.5M<br>2027-28: $54.8M<br><br>Total of $241M<br><br>*Based on a salary cap of $121.5M

In addition, Michael Porter Jr. enters restricted free agency after the 2021-22 season. He just averaged 19.0 points on 54.2 percent shooting and 7.3 rebounds per game as a 22-year-old for a Nuggets team that finished third in the Western Conference.

Denver will also undoubtedly try to extend him as the team builds around a core four of Jokic, Murray, Gordon and Porter.

That gives Denver zero cap room going into the mid-2020s, and as Gozlan noted, the Nuggets would go over the 2022-23 luxury tax mark ($145 million, per Charania) if Porter re-re-signs with the team.

Yossi Gozlan @YossiGozlan

Denver isn’t in the luxury tax yet in 2022-23, I’ve got them roughly $19M below with Gordon’s first-year salary. An extension for Michael Porter Jr. will put them over. <a href="https://t.co/VvUzSgaNCW">https://t.co/VvUzSgaNCW</a>

The team will be at the mercy of improving its roster through the draft and various exceptions, such as the taxpayer mid-level exception.

However, Denver appears set to contend for its first Western Conference title (and perhaps its first NBA championship in franchise history) provided this core gets locked down. The Nuggets would have a multiyear championship window led by a superstar in Jokic, a clutch guard in Murray and the sweet-shooting Porter. 

That's in addition to a fantastic fit at forward in Gordon, who significantly helped Denver down the stretch last year after Murray was lost for the year with a torn ACL.