Success as captain-coach

In his first year as captain-coach, Nicholls led the Blues to the minor premiership with 18 wins and a draw, followed by Richmond with 18 wins. 1972 was the first season in which the McIntyre "Final Five" system was used, and so because Carlton finished on top of the ladder, this meant that they had a week's break before facing Richmond in the Second Semi-final. The match was drawn, which in those days meant that a replay was required the following week, thus shifting every other match back another week. Richmond won the replay by 41 points, but in the post-match interviews Nicholls refused to panic:

Carlton has not hit a form slump. We just had a dismal day – our worst for the season. [...] There'll be no panic just because we went down by 41 points. There won't be more than one or two changes. [...] We will be sticking to the same players because it was they who put us where we finished at the end of the home-and-away games. [...] I know the players will redeem themselves next week. We just won't beat St. Kilda – we will win well. And if we team together as I know we can I know we are good enough to take the premiership.^[6]

Robert Walls, who was serving as vice-captain, recalled that the day after the semi-final defeat, the players arrived at training feeling flat, but Nicholls revealed to them the outline of his plan to win the premiership with all-out attacking football.^[7] But first, Carlton had to defeat St Kilda in the Preliminary Final. The Saints had played in the previous year's Grand Final and still boasted a strong team. Nicholls chose not to implement his plan, trusting that his players would get the job done.^[8] The Blues prevailed by 16 points and earned the right to redeem themselves against their arch-rival.
Richmond went into the Grand Final as clear favourites, but this would be the day when Nicholls established once and for all his reputation as one of the greats of the game. The element of surprise in Nicholls' plan lay in his team selection; he handed the rucking responsibilities to "Percy" Jones, whilst stationing himself in the forward pocket with the intent of kicking goals.^[9] He also deployed Barry Armstrong in the centre while Vin Waite was given the task of minding Barry Richardson.^[9] Finally, in the lead-up to the match, Nicholls had given his players three simple instructions: get to the ball first, kick long into attack and contest for 100 minutes.^[9]
The plan succeeded in the most spectacular fashion possible. In an enthralling spectacle of attacking football from both teams, Carlton piled on the goals to lead at half time with an incredible score of 18.6 (114) to 10.9 (69). The shell-shocked Tigers tried to claw their way back into the game, but every goal they scored was met with a Carlton reply. When the final siren sounded, Carlton had registered a record score of 28.9 (177) while Richmond's score of 22.18 (150), enough to win most games, remains the highest losing score in a Grand Final. While every Carlton player contributed, Nicholls himself had a field day, kicking six goals on Ray Boyanich. He said afterwards that had he not kicked six, he felt he would have failed in the position.^[9] Walls, who also kicked six goals, was nominated best on ground.

Stung by their defeat, Richmond didn't have to wait long to avenge their humiliation as the two rivals squared off again in the following season's Grand Final. On a hot and blustery day, Richmond prevailed in a match that would be remembered for two major incidents. The first occurred at the three-minute mark of the first quarter, when Nicholls was sensationally felled by Richmond back pocket Laurie Fowler while juggling a mark. Both players had their eyes on the ball and didn't see each other until it was too late. Fowler, who was airborne, hit Nicholls with his shoulder^[10] and emerged from the collision unscathed, but Nicholls went to ground and had to be helped to his feet by the club trainers. The sight of their fallen leader stunned the Carlton players; Robert Walls recalled that "[t]here was a bit of disbelief when Nicholls went down because we'd never seen the big bloke hurt like that before."^[11] Nicholls was awarded a 15-metre penalty, and goaled from the free kick, but suffered double vision from the collision, and had little further impact on the game.
The second incident came in the second quarter, when Ian Stewart kicked the ball deep into Richmond's attacking zone to a contest involving Carlton full-back Geoff Southby and Richmond forward Neil Balme. What happened next would sour Carlton's already bitter relations with Richmond for many years.^[12] Going for the ball after it spilled off a pack contest, Southby was floored by a round-arm punch from Balme. The hit broke Southby's jaw, and he would not return to the field after half time. Just moments later, Balme would lash out again, this time at Vin Waite. Reflecting on the incident many years later, Nicholls angrily labelled Balme a "cheat":

I didn't respect him as a player because I reckon he was a cheat. He used to dwell on players and with his big, strong frame, he should have been doing more courageous things. People over the years say Balmey knocked a couple out, but he basically king-hit people.^[12]

Controversies

While playing for Carlton, Nicholls served a three-month jail term at Pentridge Prison in 1960, having been found guilty of embezzling £5,558 (equivalent to A$92,488 in 2022) from the Collins Street Branch of the ES&A Bank and larceny as a servant. He was sentenced to twelve months' imprisonment (with an eligibility for parole after three months);^[13] he missed the first eleven games of the 1960 season, returning to play against Richmond on 16 July 1960.^[14]

Retirement

Nicholls retired with a Victorian elite football and Carlton club record of 328 games. Some publications list Nicholls as playing 331 games, by reason of a VFL/AFL ruling from 1969 that added three games for Carlton that Nicholls missed while playing interstate football for Victoria to his total: this ruling was rescinded by the VFL/AFL in 1996.

Nicholls' Victorian elite football games record of 328 was broken by Kevin Murray in Round 18 of 1974 — Murray retired at the end of the 1974 season with 333 VFL/AFL games — while his Carlton club record remained until it was broken by Bruce Doull in Round 1 of 1985.

Coaching

Following his retirement, he served as non-playing coach at Carlton in 1975, but then resigned three days before the start of the 1976 VFL season, citing mental and physical exhaustion.^[15] Nicholls then went to South Australia, where he coached Glenelg from 1977 to 1978, and then returned to Melbourne to coach Coburg in the VFA in 1981.