Report: Nuggets pull Trey Lyles’ qualifying offer

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The Nuggets traded a protected first-round pick to the Thunder for Jerami Grant.

We’re learning more about about how much that deal will cost Denver.

Zach Lowe of ESPN:

Shams Charania of The Athletic:

The protections on that pick look favorable to Oklahoma City. The Nuggets will likely send a low first-rounder, but in a deep Western Conference, there’s a chance Denver slips to the high end of that conveyable range. The Nuggets at least avoid massive downside risk in the unlikely event they get a high lottery pick.

Trading for Grant put the Nuggets’ team salary just $1,877,076 below the luxury-tax line. Lyles accepting his $4,485,665 qualifying offer would have put them into the tax. Denver, which hasn’t paid the luxury tax in nine years, apparently wouldn’t risk that. This is another indicator the Nuggets won’t use their mid-level exception to upgrade the roster either.

Lyles had a breakout season a couple years ago but regressed last season. The main reason: His 3-point percentage dropped from 38% to 26%.

The 23-year-old former lottery pick still has some potential as a stretch four. He belongs in the NBA. But he’s likely looking at minimum contracts, though maybe he gets offered slightly more somewhere.

He could still return to Denver. The Nuggets could sign him to a minimum contract, stay under out of the luxury tax and preserve his Bird Rights into next season. With a bounce-back year, Lyles would have a clearer path to a bigger contract in Denver than anywhere else.

But the Nuggets’ forward rotation is getting crowded with Paul Millsap, Grant, Juan Hernangomez and maybe eventually Michael Porter Jr. Denver also likes to use two-center lineups with Nikola Jokic and Mason Plumlee.

So, Lyles will likely get squeezed out.

We’ll see how he does as in unrestricted free agency. Restricted status could have cooled his market. But he might regret not accepting that qualifying offer while he had the chance. His minimum salary is just $1,737,145 – $ 2,748,520 less than the qualifying offer.