Encore? That could prove difficult

DENVER -- After two and a half months of exquisite basketball, the Nuggets were overdue for a stinker. And unfortunately, they delivered it at the worst possible time.

This was a reversion to the style of play that had made them so hard to love even as they won 50 games a season ago -- lazy defense, poor offensive decisions and periodic combustibility. Denver gave up too many wide open shots, tried too many crazy passes and picked up yet another senseless technical foul in falling to the Los Angeles Lakers 119-92 in Game 6 of the Western Conference finals.

"We tried to outscore them instead of outdefend them," said Nuggets coach George Karl, but his team ended up getting neither done.

For L.A., it's back to the NBA Finals, where the Lakers can head with confidence after their most complete outing of the postseason.

For Denver? It's an offseason full of question marks.

First, the good news. What the Nuggets accomplished this season was borderline miraculous from a financial perspective -- Denver's front-office team of Bret Bearup, Mark Warkentien and Rex Chapman not only met owner Stan Kroenke's mandate to get under the luxury tax by shedding nearly $20 million in payroll, but also moved up six spots in the conference standings and reached the conference finals. Once there, they gave a 65-win team everything it could handle for five games.

Teams are fond of saying "nobody believed in us," but in the Nuggets' case it's really true -- not one of our experts had them making the playoffs before the season, much less moving into the upper crust of the vaunted Western Conference and taking the Lakers to six games.

To a man, the Nuggets felt things might have been different with a bit more experience and a bit more composure. Denver had no answer for L.A. in the Game 6 beatdown, but goes into the offseason also ruing defeats in Games 1, 3 and 5. Denver led the first two of those meetings late in the fourth quarter, and were up late in the third in Game 5, but faltered down the stretch in all three games.

"In this game and in this series there were too many times our inexperience was exposed," said Chauncey Billups, who bizarrely found himself eliminated in Game 6 of the conference finals for a fourth straight season. "Now we know as a team what it takes in these situations. I think we learned a lot of lessons."

Getting this far again, however, could prove extremely difficult. Despite all the salary shedding they did this season, the Nuggets remain in a tight spot in terms of the salary cap and luxury-tax line, and they have several free agents to deal with this summer.

Let's start at the top. Kroenke is a real-estate billionaire whose wife is a Wal-Mart heiress -- clearly, if he decides he wants to spend a few million more, he can. Equally clearly, he's decided that fiscal restraint is desirable after he paid an enormous luxury tax bill for a team that failed to win a playoff game in 2007-08.

Kroenke also owns the NHL's Colorado Avalanche (and a majority stake in Arsenal, the English soccer team), and I'm told that until recently the success of the Avalanche helped subsidize losses by the Nuggets. Now that the Avalanche stink, that's no longer the case, which is one reason the Nuggets had to cut back this year.

Here's where it hurts the Nuggets -- despite all last year's cutting, they're likely going to be several million dollars over the luxury-tax threshold unless they trim even more. Because their player contracts have built-in raises but the salary cap is expected to go down next season, they're caught in the whipsaw.

Denver will be nearly at the tax line with the contracts of just six players -- Billups, Carmelo Anthony, J.R. Smith, Kenyon Martin, Steven Hunter, and Nene (who broke his arm in the fourth quarter of Game 6, by the way). Add in the $3 million on the books as part of Antonio McDyess' buyout and the smaller contracts of Sonny Weems and Renaldo Balkman, and they're already at $69 million -- with the luxury-tax threshold expected to fall between $69 and $71 million next year. And things get even worse a year later, when the tax level may drop again while the salaries of the Nuggets' core players once again rise.

All of that is before they attempt to re-sign Chris Andersen, Linas Kleiza, Dahntay Jones, or Anthony Carter, or add any additional players, or draft anybody.

"We want everybody back, we want our same team," Anthony said. But it's going to be extremely difficult for the Nuggets to have that.

Denver's biggest priority is bringing back Andersen, the high-flying shot-blocker who returned to the Nuggets as a fan favorite and energized the second unit. The Nuggets are hoping to sell their lone draft pick, at No. 34, and use the money to keep Andersen. Denver also will probably trade the future first-round pick it owns (via Charlotte) to any team willing to take Hunter off its hands, opening up some more wiggle room.

Of course, if Kroenke decides to open the checkbook again, it could be a very different story. The Nuggets are sitting on a huge trade exception from the Allen Iverson-Billups deal with Detroit. If they decide to exercise it, they can essentially get a high-priced player from another team for free, a possibility all the more enticing in the current economic environment as teams are looking to move out high-salaried players -- there should be lots of sellers and few buyers.

But such a move would put them back where they were in the Iverson days, with a roster that's well into the luxury tax. If the team is a genuine championship contender, it might be worth it to Kroenke to pursue that option. (While Kroenke is invisible publicly, he's a passionate fan.) But my sources consider that kind of move unlikely unless a Pau Gasol-esque trade landed in the Nuggets' laps.

The wild card in all of this, I'm told, is what happens at the box office this summer. If Denver's deep playoff run leads to a torrent of season-ticket sales, then the team might be able to pay the tax and keep the financial losses acceptable. In their current state, though, the team isn't profitable unless their player salaries are in the $55 million range, so going up to $75 million in payroll and paying the luxury tax on top of that probably isn't in the cards.

All of which takes us back to a basic, somewhat universal problem -- it's hard getting to this point in the first place, but often it's even harder getting back.

The Hornets thought they'd be back in contention when their season ended a year ago, and the Jazz thought the same thing the year before that when they made it to the Western Conference finals. The Nuggets learned a lot in this group's first venture past the first round of the playoffs, but it remains an open question whether they'll have a chance to apply what they learned next spring.

John Hollinger writes for ESPN Insider. To e-mail him, click here.