Peyton Watson, Aaron Gordon, Nuggets
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Peyton Watson of the Denver Nuggets celebrates with Aaron Gordon after a play against the Washington Wizards.
The Denver Nuggets could face a significant offseason challenge in retaining one of their most important breakout contributors, as a Western Conference rival prepares to enter the market.
According to NBA insider Jake Fischer, the Los Angeles Lakers are among the teams positioning themselves to pursue Nuggets forward Peyton Watson as he approaches restricted free agency this summer.
“Rival executives are increasingly curious about Denver’s likely struggles to retain Peyton Watson this summer given the fourth-year swingman’s recent breakout play amid all of the Nuggets’ health woes,” Fischer wrote Wednesday in The Stein Line.
“Sources say teams that are projected to have cap space — notably such as the Lakers — are already preparing interest.”
Lakers’ Longstanding Interest in Nuggets’ Defensive Wing
Watson’s name has been circulating in league circles well before his recent surge.
Earlier this month, ESPN’s Dave McMenamin included Watson among a wide pool of perimeter players the Lakers could target as they look to improve defensive versatility and shooting on the wing.
“They need help on the perimeter,” McMenamin wrote. “A guy like Jonathan Kuminga, maybe he could be someone the Lakers could pursue. Maybe Andrew Wiggins in Miami. Someone like Keon Ellis in Sacramento, De’Andre Hunter, Peyton Watson. The list goes on and on.”
Watson’s continued development has only strengthened his profile across the league.
Nuggets Forward Steps Up During Jokić’s Absence
One of the biggest reasons Denver stayed competitive after Nikola Jokić went down with a knee injury in late December was Watson’s emergence in an expanded role.
The 2022 first-round pick averaged 22.1 points, 5.8 rebounds, 2.8 assists and 1.1 steals over his last 15 games. During Denver’s 10–6 stretch without Jokić, Watson shot 48.6% from the field and 44.3% from three-point range, providing reliable two-way production while the rotation was stretched thin.
Watson continued that trend Thursday night, scoring 19 points on 7-of-15 shooting in a 107–103 win over the Brooklyn Nets, adding three assists and two blocks in 34 minutes.
At 6-foot-8, Watson’s length, defensive flexibility and improving perimeter shot align closely with the modern wing archetype that teams covet — particularly in Los Angeles, where lineup construction has increasingly centered around Luka Dončić.
Financial Squeeze Complicates Denver’s Outlook
Watson’s rise arrives at a difficult moment financially for Denver.
The Nuggets already have nearly $186 million committed to five players, placing them well above the projected $166 million salary cap before accounting for the rest of the roster. With additional contracts pushing projected payroll past $206 million, re-signing Watson at market value would likely move Denver into the second apron.
Crossing that threshold triggers severe roster-building penalties, including restrictions on aggregating contracts in trades — limitations the Nuggets have worked to avoid. Last offseason’s decision to trade Michael Porter Jr. was partially driven by a desire to preserve long-term flexibility.
Fischer also reported that Denver is expected to make a minor financial adjustment before the trade deadline to address its current tax position.
“League personnel anticipate that the Nuggets will soon execute a small move of some sort to evade the luxury tax,” Fischer wrote. “Sources say they’re confident they’ll be able to do so without sacrificing anyone from their preferred rotation.”
Offseason Domino Looms
Denver remains confident in its championship outlook when fully healthy, but Watson’s impending restricted free agency now looms as one of the organization’s most consequential offseason decisions.
With rival teams preparing cap space — and the Lakers already signaling interest — the Nuggets may soon be forced to balance short-term contention with long-term financial realities as one of their most valuable young contributors approaches the open market.