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John Schuhmann

Chanucey Billups, Carmelo Anthony
Chauncey Billups (left) and Carmelo Anthony could be teammates in a different uniform soon.
Fernando Medina/NBAE via Getty Images

The 'Melo Deal: How it might work, why it makes sense


Posted Jan 13 2011 11:47AM

A Carmelo Anthony timeline

When Carmelo Anthony chose not to sign a three-year contract extension last summer, he put the Denver Nuggets in a tough position. Not only do the Nuggets want to avoid losing Anthony for nothing, but, without their star, they know they have to completely restructure their roster.

That's easier said than done, because the Nuggets' roster is made up mostly of veterans with big contracts. And that is one of the reasons why a trade between the Nuggets and New Jersey Nets is taking so long to put together.

When a team decides to trade its star player, it almost always wants three things out of the deal: A young player with potential, Draft picks and salary flexibility. Enter the Nets, who have what the Nuggets want and want what the Nuggets have.

When the Nets and Nuggets explored trade options before the season, New Jersey made rookie big man Derrick Favors, Devin Harris and the expiring contract of Troy Murphy available. And holding three first round picks over the next two Drafts, they have the ability to trade two of them.

The four-team trade that was worked out with the Charlotte Bobcats and Utah Jazz in late September had the Nets sending Harris to Charlotte and the Nuggets receiving Andrei Kirilenko from Utah, along with Favors and two picks from the Nets. That deal fell apart, but since then, the Nets have had a standing offer of Favors, Murphy and picks.

That deal satisfies the want for a young player and picks. And since Murphy's contract is expiring, it doesn't hurt the Nuggets long-term. But it doesn't help them much either.

Trading Anthony takes the Nuggets out of contention in the Western Conference, of course. That's not necessarily a bad thing -- one step back to take to steps forward -- but when you're looking to restructure your roster, you don't want to have the fourth highest payroll in the league.

Currently, the Nuggets are about $13 million over the luxury tax. So if they were to make no trades, they'd be paying out an extra $13 million at the end of the season. And because the combined salaries of Murphy and Favors are only a million less than Anthony's, the Nuggets wouldn't be saving much money this season with a simple two-team deal.

So the Nuggets would like to add players to the trade, to shed both long and short-term salary. But because the Nets are also over the salary cap, they are not allowed to absorb more than 25 percent over what they're sending out, plus $100,000.

Example: If the Nets send out a player with a contract of $1 million, the most they can take back is $1.35 million.

That's where a third team comes in. And that's part of the reason the Nets traded Terrence Williams to Houston last month in a three-team deal that yielded them two more first round picks. Those picks weren't acquired to be sent to Denver. They were acquired to possibly be sent to a third team, to encourage that team to help make the deal happen.

The easiest solution would be to bring a team with cap space or a trade exception (Cleveland was a candidates at one point or another) into the deal, because they could absorb a contract (perhaps that of Devin Harris) and allow New Jersey to send out more salary then Denver is receiving.

But there's another objective, and that's for New Jersey to upgrade its roster at more than just the small forward position, so that Anthony feels better about signing the contract extension to play for the Nets. And ultimately, the Nets and Nuggets found a way to save Denver a lot of money and upgrade the Nets' backcourt with the help of the Detroit Pistons, who could use a little help themselves.

With the Pistons up for sale and struggling on the court, they'd like to rid themselves of Richard Hamilton, who is owed at least $21.5 million over the next two seasons. That's not an easy contract for the Nets to take on, but Hamilton still has some game left, and the Nets could use a proven winner.

The Nuggets are willing to send Chauncey Billups, who has a hefty $13.1 million salary this season, to the Nets in the package as well. Anthony, Billups and Hamilton would be a nice haul for the Nets, but it's a haul that is getting paid $43 million this season. Mikhail Prokhorov may be the richest owner in the league, but he's not allowed to take on that much salary without sending out at least $34 million.

That's why both Harris and Murphy have to be part of the deal, and why the Nets must also get rid of mid-range salaries like Johan Petro and Anthony Morrow. As it stood earlier this week, the deal was looking something like this according to multiple reports:

To Denver: Favors, Stephen Graham, Harris, Morrow, Ben Uzoh and Quinton Ross

To Detroit: Murphy and Petro

To New Jersey: Anthony, Billups, Anthony Carter, Hamilton and Shelden Williams

It's really an amazing trade, because the Nuggets are shedding more than $12 million in salary this season without the help of a trade exception or a team under the cap. It works because the more salaries that are included, the greater that allowable extra 25 percent that the Nets can take on becomes.

Think of it this way: If the Nuggets are sending out only Anthony's $17.1 million contract, they can only shed about $4.4 million in a trade with another team over the cap. But by sending out Billups, Carter and Williams as well, and also involving a third team that can take on an extra 25 percent, they're able to shed much more.

But why stop there? If the Nuggets are truly rebuilding, they could do without the contract of Al Harrington, who's owed almost $28 million over the next few seasons. They would also like to get rid of Renaldo Balkman's contract, even though it's much smaller than Harrington's.

Further, Harris is clearly not a great fit for the Nuggets, who already have Ty Lawson ready to take over at the point. So if they can, Denver would like to get another asset from a fourth team that wants Harris.

And that's how a complicated deal gets even more complicated. Anthony put the Nuggets in a tough position by not signing the contract extension, but the Nuggets have also buried themselves a bit with the contracts they've handed out. So not only are they looking to acquire a young player and Draft picks with this deal, they're also trying to use it as a way to dig out of a big payroll hole.

John Schuhmann is a staff writer for NBA.com. You can e-mail him here and follow him on twitter.

The views on this page do not necessarily reflect the views of the NBA, its clubs or Turner Broadcasting.

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