Nuggets Could Have More Trouble Re-Signing Peyton Watson Than Expected

Coming off a first-round playoff exit, the Denver Nuggets are using the 2026 offseason to retool and hope for better success next year. Of course, injuries derailed what could have been a much more successful 2025-26 season, but they still have some key roster changes needed to get back to title contention.

One of their biggest decisions of the offseason will be with restricted free agent Peyton Watson, who is coming off a breakout year but could demand a huge pay increase on the market. Fortunately, the Nuggets will have the chance to match any offer that Watson receives, but that does not mean they will have their way with re-signing him.

NBA insiders Jake Fischer and Marc Stein of The Stein Line reported that a few notable teams could try to steal Watson from Denver, and they could reach a contract offer of around $30 million AAV to convince the Nuggets to let him walk.

"The Nuggets have been signaling for months that they plan to match any offer sheet for Watson … to the point that sources say it would take an offer sheet in the $30 million range in order for Denver to balk at re-signing him," Fischer and Stein reported. "The Lakers and Bulls are two teams that have been mentioned as potential Watson suitors. ... Sources with knowledge of the situation have this week added that the Clippers are also weighing whether to pursue Watson."

𝑵𝑬𝑾𝑺: Clippers are weighing a pursuit of Peyton Watson in free agency if they operate as a cap-room team, per @TheSteinLine

"It would take an offer sheet in the $30M range in order for Denver to balk at re-signing him."

🔗 Full report from Stein: https://t.co/e4WcZd3BbE pic.twitter.com/7G7MmQXwN7
— DNVR Nuggets (@DNVR_Nuggets) June 27, 2026

Rightfully so, if Watson receives an offer of $30 million on the free agency market, the Nuggets would likely let him walk.

What will happen with Watson?

The most likely scenario for Watson this offseason is that he receives an offer worth around $25 million per year, and the Nuggets match it to retain him. The $30 million figure coming out is likely smoke from Watson's representatives trying to inflate his price tag, but it is far too high for a still-unproven player.

ClutchPoints' Brett Siegel also reported that the Nuggets are expected to offer Watson a deal in the $28-30 million AAV range. Still, the Nuggets would likely not reach that number unless another team is willing to cough up more money, and the Nuggets are simply matching his best offer.

ClutchPoints’ @BrettSiegelNBA says the Nuggets are expected to offer Peyton Watson ‘somewhere north of $28-30 million per year’ to try and keep him in Denver 😳💰

“He’s a guy that a lot of these teams with cap room, the Lakers, the Bulls, the Nets, have been linked to. There’s… https://t.co/2Tzsz7jxv3 pic.twitter.com/h1JE4gLahN
— ClutchPoints (@ClutchPoints) June 25, 2026

Regardless, the Nuggets should want to keep Watson, as it feels like he is just scratching the surface as a two-way star, but only at the right price. Last season, he averaged 17.3 points, 5.3 rebounds, 2.2 assists, 1.0 steals, and 1.1 blocks per game through 40 starts, while shooting 49.9% from the field and 43.0% from three-point range.

There is no denying that Watson had an impressive season and stepped up big time when the Nuggets caught the injury bug, but he still seems fairly unproven to earn a contract worth around $120 million over four years or $150 over five years. If the Nuggets can retain him on a deal worth about $22-26 million per year, then they will do it. However, the closer it gets to that $30 million mark, the more likely they are to let him walk.

The money-saving moves

Apr 23, 2026; Minneapolis, Minnesota, USA; Denver Nuggets forward Cameron Johnson (23) goes after the ball against the Minnesota Timberwolves in the third quarter at Target Center. | Bruce Kluckhohn-Imagn Images

If the Nuggets re-sign Watson without making any other moves, they would be well over the luxury tax and into the second apron. To avoid paying the extra tax or dealing with second-apron restrictions, they are expected to make other moves to clear up space for Watson's deal.

There are two obvious moves the Nuggets have up their sleeve this offseason: trading Cameron Johnson and waiving Jonas Valanciunas. Johnson is on an expiring $23 million contract, and they will likely do what they can to dump that salary. As for Valanciunas, only $2 million of his expiring $10 million contract is guaranteed, so they can waive him to clear $8 million off their books.

There have also been talks about the Nuggets shopping Christian Braun and Aaron Gordon, although it remains unclear if those moves will actually happen. Braun's trade value is in the gutter as his five-year, $125 million contract kicks in next season, while the Nuggets should think twice about shopping Gordon, who has arguably been their second-most important player behind Nikola Jokic.

Keep in mind, though, the Nuggets can re-sign Watson at any price, even without clearing up cap space. However, they seem unwilling to pay that extra tax to keep everyone on their roster. There is no doubt that the Nuggets will try to retain Watson, and it will be interesting to see how it shakes out.

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