2013 NBA Free Agency: How much money can the Nuggets spend in free agency?

It seems everyone is hot for the Nuggets to sign a few of the guys they have targeted for the team. I've heard suggestions of Al Jefferson, Josh Smith, and J.J. Redick. How could the Nuggets go about inking any of them? It'd be a very difficult financial process and here is an article on why ...

We don't yet know the firm salary cap numbers for the 2013-14 season, but we have a pretty good idea: $58.5 million and the luxury tax line is supposed to come in at a small increase from the $70.307 million from the 2012-13 season.

Early projections given to NBA teams in May have the salary cap rising to just $58.5 million for the 2013-14 season, according to ESPN's Marc Stein. Grantland's Zach Lowe confirmed Stein's report.

According to Hoopsworld the Nuggets project to have $5.55 million in maximum cap space.

The team has a total of $51.9 million in guaranteed deals for the 2013-14 season and $56.6 million if you factor in Timofey Mozgov's qualifying offer (just used as a space filler as he could sign for more or less) and Quincy Miller's $788K non-guaranteed deal (Q is guaranteed $150K and his deal becomes fully guaranteed if he's on the roster opening night, according to Storytellers Contracts).

So, how can the Nuggets sign Andre Iguodala, Corey Brewer, and Julyan Stone (Early Bird) with just $5.55 in max cap room? Bird Rights.

Bird Rights: players eligible to sign a maximum-salary contract for up to five years when he becomes a free agent. The maximum salary will vary depending on how long the player has been in the league, but regardless of the amount, a team can exceed the salary cap to complete the deal.

Early Bird: allows team to spend up to the league's average salary in the first season of a new contract.

One reason the Nuggets traded for Iguodala is so they could acquire his Bird Rights - which a player gains by playing a minimum of three seasons for one team. Bird Rights can be acquired via trade when a player such as Iguodala goes from the 76ers (eight seasons) to the Nuggets (one season).

The Nuggets had to trade for Iguodala rather than wait for him to become a free agent because Denver can now offer him, up to, a max contract, exceeding the salary cap. If you want the other side of it, look at the Houston Rockets clearing cap room to be able to offer Dwight Howard a max deal because they were unable to procure a trade for him when he was with the Orlando Magic. Had the Rockets been able to make a trade for Howard, they would not have had to release Carlos Delfino and Aaron Brooks and trade away rookie Thomas Robinson for cap space.

What other ways can the Nuggets sign players?

According to Hoopsworld the Nuggets can use the following exceptions on free agents:

The definition's to each exception, according to Larry Coon's FAQ:

Non-Tax payer Mid-Level Exception: This exception may be split and given to multiple players. It may be used for contracts up to four years in length. Signing a player to a multi-year contract does not affect a team's ability to use this exception every year -- for example, a team can use this exception to sign a player to a four-year contract, and use it again the following year to sign another player.

Bi-Annual Exception: It cannot be used if the team has already used the Taxpayer Mid-Level Exception or the Room Mid-Level exception (the Nuggets are neither). The exception may not be used two years in a row. It may be split and given to more than one player, and can be used to sign players for up to two years.

What about sign-and-trades?

Now, the number one item I've heard Nuggets fans talking about is "sign-and-trade" - can the Nuggets do a sign-and-trade? Yes. Check this out from Larry Coon aka Salary Cap Guru:

Question: Coon, love your work. Lakers above luxury tax, can't sign and trade Dwight anymore right? So, what is the rumbling of Dwight interested with Warriors, Dwight as to accept mid level with them?

• Larry Coon

  Teams above the apron (the point $4 million above the luxury tax line) can't RECEIVE a player who is signed-and-traded, but they can send a player away in a sign-and-trade. So the Lakers CAN do a sign-and-trade with Dwight if they (and Dwight, and the other team) want to.

  I'm not hearing anything from Dwight's end saying that he has any interest in the Warriors. I may be wrong (Dwight certainly hasn't divulged his plans to me), but this could just be speculation. But there's no way that Dwight will accept a mid-level salary next year.

The Nuggets can also use the veteran's minimum to sign free agents, but again with such limited roster room - I don't see the Nuggets needing to add a Melvin Ely or Malik "Tacos" Allen.

So, with the information above - it would be very difficult for the Nuggets to sign guys like Al Jefferson, Josh Smith, Monta Ellis, Jarrett Jack, or J.J. Redick - even if Andre Iguodala is not re-signed. The reason the Nuggets can throw big money at Iguodala is because they have his Bird Rights.

The Nuggets could perhaps get a player to sign for the MLE, but the guys on the paragraph above will likely command more on the open market than $5.15 million per season. In order to obtain any of the guys above, the Nuggets would likely have to complete a sign-and-trade with the former team agreeing to take back some of what the Nuggets would be willing to part with.

Happy free agent hunting ...

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