If the Nuggets are going to escape the NBA’s second apron, they still have work to do.
But a recent under-the-radar move brought them one step closer. Denver decided late last week to stretch the guaranteed portion of Jonas Valanciunas’s salary across three seasons, a league source told The Post, confirming a report by Michael Scotto of HoopsHype.
Valanciunas signed a two-year contract with the Lithuanian team Zalgiris Kaunas after Denver waived him in July, releasing the backup center from the last year of his NBA deal. It left the Nuggets with a $2 million dead cap hit on their 2026-27 payroll — his full salary next season would’ve been $10 million if they had kept him — as Valanciunas was able to return to his home country.
The NBA’s waive-and-stretch provision allows teams to spread a waived player’s remaining salary across multiple seasons, sacrificing future cap space in exchange for immediate relief. In this case, Denver is choosing to incur a dead cap hit of $666,666 for each of the next three years, instead of signing a one-time-only $2 million check.
That means $1.3 million in direct savings against the salary cap. But it also dramatically reduces Denver’s projected luxury tax bill. As a “repeater tax” team, the Nuggets essentially will owe interest on every dollar spent above the luxury tax threshold next season. Stretching Valanciunas whittles about $9 million off their projected tax total.
Still, , the NBA’s most expensive roster remains about $800,000 above the second apron after the Valanciunas move. The Nuggets have until the mid-season trade deadline next February to shed other salary if they want to avoid that threshold, which results in not only an additional tax penalty but also roster-building restrictions. After re-signing Spencer Jones for two years and $12 million this summer, they became the only team in the league with a payroll exceeding the second apron.
By trading Peyton Watson in August and now by lowering the immediate cap hit on Valanciunas, they’ve continued to signal that getting out of second-apron territory is a priority. Currently, their five least expensive cap hits on the active roster all belong to players signed this offseason: DeMar DeRozan, Marvin Bagley III, Tyus Jones, Alpha Diallo and rookie Trevon Brazile.
The next-cheapest players Denver could theoretically trade sometime between now and February are DaRon Holmes II ($3.4 million) and Julian Strawther ($4.8 million). But as of now, any such salary-shedding transaction would require an accompanying move to satisfy NBA roster rules. The Nuggets have 14 out of 15 spots tentatively filled as the calendar flips to September. They cannot carry any fewer than 14 players for more than two consecutive weeks during the season.
Two-way contract maneuvers
Outside of that active 15-man roster, Denver has made a few valuable discoveries using two-way contracts in recent years, from Jones to Collin Gillespie (now in Phoenix).
Every team gets three two-way spots per season. Those spots are filled by players who can be assigned back and forth between the NBA and G League; their salaries don’t count against the cap, but they can play regular-season NBA minutes as if they’re part of the active roster.
The Nuggets acquired Julian Reese’s two-way contract from Washington in the Watson sign-and-trade, but they waived him last Friday, according to the NBA’s transaction log. They proceeded to sign recent draft pick Bryce Hopkins to a two-way deal instead, leaving them with two spots filled and one vacant. Hopkins was taken with the 49th overall pick in June. Former CU guard KJ Simpson currently occupies the other spot.
Veteran guard Lonnie Walker IV, who will try to make the team on a training camp invite, is no longer eligible to sign a two-way contract due to his NBA service time. If Denver keeps him around, it will have to be via a standard contract.
