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The $4M contract that almost bankrupted the Nuggets in the early 80s

The Nuggets made David Thompson the highest-paid player in the NBA in 1978. Thompson reportedly had to pay back some of the money two years later "to keep the franchise afloat."
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Posted at 8:45 PM, May 31, 2023

DENVER — The Denver Nuggets haven’t always experienced the financial prosperity they have today under owner and sports mogul Stan Kroenke.

In fact, unstable ownership is as much part of the story of the franchise as the ABA success, the iconic jerseys of the 1980s or the Hall-of-Fame players to play in the Mile High City, according to Jeff Morton, who hosts the CSG podcast – the longest-running Nuggets podcast in Denver.

“It's just part of this history, stemming from ownership [...] I guess the best you could say is that, until Kroenke bought the team in 2000, they never had an ownership that was either financially able or 100% backed the team,” said Morton, who’s followed the team since the 1980s.

According to Forbes, the Nuggets last reported an annual operating income of $67 million. The value of the team – $1.93 billion – has quadrupled in the last decade and is tenfold what it was when Kroenke bought the team.

But that’s a far cry from the financial instability that plagued the franchise for decades.

In the early 80s, the Nuggets were close to getting the ax from the NBA altogether.

The $4M contract that nearly bankrupted the Nuggets in the early 80s

“They were in deep financial trouble,” Morton said. “The consortium that Carl Scheer had brought on to kind of financially help the Nuggets was hemorrhaging money, largely due to a contract that they signed for David Thompson in 1978 that they really couldn't afford.”

That’s future Hall-of-Famer David Thompson, of course, one of the original high-flying dunkers in the league and a star for Denver in its early NBA days.

The Nuggets had given Thompson a five-year, $4 million contract in 1978 that made him the highest-paid player in the NBA, according to Colorado Public Radio, only worsening the team’s financial peril. Morton said the Nuggets agreed to the megadeal to keep Thompson from signing with New York.

For perspective, current-day Nuggets superstar Nikola Jokic is playing on a five-year, $272 million contract that will pay him nearly $62 million in 2027-28 alone, according to Spotrac. But, more than 40 years ago, $4 million was enough to nearly break the bank.

Both the Nuggets and Utah Jazz were close to folding, Morton said.

According to a November 17, 1980 Sports Illustrated article, the Nuggets actually asked Thompson to pay back some of the $800,000-per-year contract "to keep the franchise afloat."

Thompson and his agent orchestrated a deal in which Thompson paid back about $200,000 of the contract as a loan payable in 1983.

Wow.

Red McCombs, the former owner of the San Antonio Spurs, rescued the team in 1982 and righted the financial ship, but unstable ownership would again rear its ugly head.

McCombs sold the team to fellow Texan Sidney Shlenker in 1985 and would again purchase the Spurs with the proceeds.

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Shlenker would sell the team to the satellite cable provider Comsat, who would also buy the Avalanche before divesting its sports teams into its entertainment branch called Ascent Entertainment Group. Ascent, which was able to build the Pepsi Center thanks in part to the box office success of the 1997 movie Air Force One, was later acquired by Liberty Media Group, who immediately dealt the Nuggets to Kroenke.

That last transaction has worked out pretty well. With the Nuggets in the NBA Finals, they could become the fifth Kroenke-owned franchise to win a championship since 2022.

In that time, the Los Angeles Rams have won a Super Bowl, the Avalanche won a Stanley Cup, and the Colorado Mammoth won the National Lacrosse League title.

The Los Angeles Guerillas, a Kroenke-owned esports team, also won a title in the Call of Duty League.