Did the Denver Nuggets overpay Aaron Gordon? Examining the implications of his $92 million contract extension

Aaron Gordon has signed a four-year, $92 million contract extension to Denver Nuggets. Gordon was acquired by the Nuggets from the Orlando Magic in March earlier this year to boost their roster for the 2020-21 season.

The Denver Nuggets suffered a disappointing loss to the Phoenix Suns in the 2021 NBA Playoffs. With many teams looking to redeem themselves in the 2021-22 season, franchises have taken to fortifying their lineups.

Aaron Gordon was expected to play a huge part for the Nuggets in the playoffs. In the 25 regular-season games he played with the team, he recorded 10.2 points and 4.7 rebounds per game. He improved upon these numbers in the playoffs, averaging 11.1 points and 5.5 rebounds.

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Why Aaron Gordon?

Aaron Gordon is a gifted finisher at the rim

Aaron Gordon emerged as a franchise player during his time with the Orlando Magic. Having been a viral sensation since his high school days for his athleticism, Gordon showed great potential as he transitioned into the NBA.

Standing at 6'8", Gordon is a prototype in terms of build for the forward position. His length allows him to be a strong finisher at the rim when paired with his jumping ability. His overall offensive package makes him a reliable and efficient scorer in full-court setting.

Aaron Gordon presents himself as a great fit for the Nuggets. Although he isn't necessarily the best option as a three-point threat, shooting only 32.1% for his career, he has a lot more to offer as a cutting option playing alongside Nikola Jokic.

Much like the young, rising star in Denver, Michael Porter Jr., Gordon is great at moving without the ball and has a real sense for chasing rebounds. These traits make him an ideal fit alongside point-center Jokic and marksman Jamal Murray.

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But did the Nuggets overpay?

This is a question that can raise some eyebrows. Looking at the way the team is constructed on paper, Aaron Gordon is the perfect fit. He gives them everything the team needs. He is a versatile scorer, efficient rebounder and he is equally effective on the other end of the floor.

However, the issue is the salary cap. With the amount of money promised to Jokic and Murray going into the 2021-22 season, the Nuggets use up almost 44% of the cap on their star duo.

With the addition of Gordon's contract extension, the Nuggets owe Gordon $16 million this season and then $19.6 million next season. They will also owe close to $65 million to Murray and Jokic combined in 2022-23.

This presents a host of problems.

Michael Porter Jr. is eligible for his rookie extension this summer itself. If the Nuggets do offer him the five-year max deal worth $173 million as expected, it would put them in a bad financial position with regards to their salary cap.

Will Barton is owed $15 million this season and $14 million next season before he becomes a free agent in 2023. Nikola Jokic also becomes a free agent in 2023 while coming off with $33 million in his final contract season with the Nuggets.

Given the current makeup for the 2020-21 season, the Denver Nuggets are already $28 million over the cap while being barely $1.4 million under the luxury tax threshold. With the addition of Gordon's extension, the Nuggets will have a difficult time retaining a lot of their pieces.

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Aaron Gordon contract extension: Win or loss?

Aaron Gordon provides a lot of versatility to the Nuggets

With Aaron Gordon contracted through to the summer of 2026, the Nuggets seem to be moving towards a largely stable future. With a foursome of Jokic, Murray, Gordon and Porter Jr. on the floor, the Nuggets have tremendous potential on both ends of the floor.

With a potential offensive rating of 135.1 and a defensive rating of 102.3 per 100 possessions as a team, Denver presents itself as a genuine threat against any team.

The possibilities with Aaron Gordon in the lineup are endless. Paired with versatile passers like Jokic, scorers such as Barton and Porter Jr., and reliable outside shooters like Murray, the Nuggets' top five can give any opposing defense nightmares. It's a legitimate "pick your poison" scenario when everyone is a capable scorer on the team.

Aaron Gordon signing an extension is an overall win for the Nuggets. A big part of the Nuggets' failure in the 2021 playoffs lay in the absence of Jamal Murray. His return could signal big things and changes for the team. Gordon getting used to the team and developing chemistry will also aid his functioning in the offense.

The short-term issue that is prominent is the depth the Nuggets have. The Nuggets are potentially 10 deep with Monte Morris, JaMychal Green, Jeff Green, Facundo Campazzo and PJ Dozier in the mix.

The Nuggets' big man replacements for Jokic are currently either Zeke Nnaji or Bol Bol, both of whom are quite inexperienced. With very limited cap space to work with, the Nuggets front office will have to get creative with how they choose to spot their star in the center position.

With the Denver Nuggets expected to sign the likes of Michael Porter Jr. and Nikola Jokic to long-term deals soon, cap flexibility (or lack thereof) will be the franchise's biggest issue in the years to come.