By Arthur Hill | at July 27, 2026 8:59 am
Nuggets forward Peyton Watson, whose market has been limited by his restricted free agency, is giving serious consideration to accepting the team’s $6.5MM qualifying offer and becoming unrestricted next summer, sources tell Marc Stein of The Stein Line (subscriber link).
Denver’s initial offers to Watson were believed to be around $70MM over four years, according to Stein, who notes that figure is significantly less than the five-year, $125MM extension the Nuggets gave to Christian Braun last fall. Stein reported previously that Watson entered free agency hoping to exceed Braun’s deal.
Denver’s financial position is complicated by its decision Sunday night to match the two-year, nearly $12MM offer sheet that Oklahoma City submitted to Spencer Jones. That move pushed the Nuggets into the second apron and increased their projected luxury tax bill from $36MM to $68MM.
That total would rise significantly with a new deal for Watson and could result in cost-cutting moves, either now or during the 2026/27 season. ESPN’s Bobby Marks (Twitter link) pointed out on Sunday that just by accepting his qualifying offer, Watson would push the team’s projected tax penalty into the neighborhood of $112MM.
The Nuggets have been considering sign-and-trade opportunities as a way to get value in return for Watson if they don’t believe they can re-sign him at an acceptable figure. The Bucks, Clippers and Hawks are all reportedly expressing interest.
However, Yossi Gozlan of The Third Apron (Twitter link) states that Denver can’t take back any players under contract in a Watson sign-and-trade as long as the team remains above the second apron. They would have to find a way to duck below that threshold before a sign-and-trade could be finalized.
Apart from franchise cornerstone Nikola Jokic, Denver’s top salaries for the upcoming season are held by Jamal Murray ($50.1MM), Aaron Gordon ($32MM) and Cameron Johnson ($23MM). Despite rumors heading into the offseason, the team hasn’t shown any interest so far in parting with any of its high-priced veterans.
Bennett Durando of The Denver Post notes that the Nuggets haven’t finished a season in the second apron since it was created in the current Collective Bargaining Agreement. If it happens during 2026/27, Denver’s first-round pick in 2034 will become “frozen” and won’t be permitted to be traded.
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