In July, the Nuggets signed Danilo Gallinari to a three-year, $45 million extension. It was unusual because it wasn’t just a few more years on his current deal, it included a restructuring of the final year of that contract. The move came as something of a surprise to a lot of people, including Gallinari himself.
“I was very fast in saying yes to this extension,” Gallinari said. “I’m very happy to stay in Denver. This extension came because of the people in Denver, the fact that I’ve been in Denver for awhile now and the fact that I love the city.”
Gallinari said he’s been pleased with the moves the team has made this summer. He’s talked extensively with new coach Michael Malone on the phone and expects to get his first face-to-face chat with the coach when Malone travels to see Gallinari play for Italy in the upcoming European Championships.
“I’m very confident in the choices they made this summer in changing the coach and everything,” Gallinari said. “They are doing everything possible in their capacity to win. And I think that they made the right choices, and hopefully we can start winning again starting this season.”
Under the current CBA, it rarely makes sense for veterans to sign contract extensions, even if they plan to stay with their current team. They’re limited to a three-year deal, and limited in the size of the raise they can get. It’s simply possible to make more money as a free agent than it is under an extension.
But the Nuggets are in a unique position with Gallinari and Wilson Chandler, who also signed a restructured extension. Because the Nuggets are under the cap, they can renegotiate the existing portion of Gallinari’s deal (which is normally prohibited) and give him a raise, as long as it fits under their cap space, and then base the yearly raises in subsequent years of his extension on that number. Gallinari was slated to make $11.5 million in 2015-16, but the Nuggets bumped that number up to $14 million and tacked two more years onto the end, including a player option in 2017-18.
For Gallinari, taking the extra guaranteed money now makes sense given his injury history, and the Nuggets get to lock him up for a price that will seem reasonable in the coming years when the salary cap jumps.