Nuggets Must Avoid Peyton Watson Taking Qualifying Offer At All Costs

The Denver Nuggets managed to check a big box off of their offseason to-do list by bringing back Spencer Jones on a two-year, $12 million deal after matching the offer sheet that the OKC Thunder extended him earlier this weekend.

But the Nuggets' offseason work is far from over, largely because their most important free agent, Peyton Watson, is still left without a contract and on the open market.

And so far, Watson's representation and Denver appear to be pretty far apart in their ongoing negotiations.

Peyton Watson Could Take the Qualifying Offer From Nuggets

According to NBA insider Marc Stein on The Stein Line, Watson appears to be weighing the idea of playing out next season on the qualifying offer at a value significantly lower than what he could get this summer, then becoming an unrestricted free agent next summer.

"League sources say Watson, like Detroit's Jalen Duren, has been weighing the unappealing prospect of playing out the 2026-27 season on a qualifying offer with the intent to become an unrestricted free agent next summer. Actually doing so, mind you, means leaving millions on the table," Stein wrote.

"In Watson's case, specifically, that would mean playing next season for just $6.5 million. The Nuggets' initial pitches were believed to be in the $70 million range over four years, which would be well shy of the $25 million in annual average value that Christian Braun received from Denver in a five-year, $125 million rookie scale extension last October."

This possibility, if truly on the table for the Nuggets and Watson, would be an extremely slippery slope from Denver's perspective, to put it lightly.

Feb 3, 2026; Detroit, Michigan, USA; Denver Nuggets guard Peyton Watson (8) tries to drive past Detroit Pistons guard Daniss Jenkins (24) in the fourth quarter at Little Caesars Arena. Mandatory Credit: Lon Horwedel-Imagn Images | IMAGN IMAGES via Reuters Connect

While the Nuggets do have Watson's Bird Rights and his restricted free agency rights this offseason, signs to this point have indicated that Denver doesn't want to cough up the price that their two-way forward is asking. Watson wants closer to $25 million, and that reported $70 million offer would put him around a $17.5 million AAV.

But if it's between the Nuggets and Watson taking the qualifying offer route, or Denver paying a bit more on his salary than they prefer, they should take the latter–– every single time.

Because if not, it could mark the beginning of the end for Watson's time in Denver. And that would be a pretty huge gut punch for fans hoping to keep their rising forward around for the foreseeable future.

The Nuggets Can't Risk Watson Taking the QO–– Here's Why

On one hand, this approach for Watson is pretty risky from his perspective. He's effectively passing up a multi-year, multi-million contract this summer with the intention of signing an even bigger deal come next season.

Instead of making $17.5 million a year or more this summer, he'd make $6.5 million this year and hit the negotiation table again in 2027.

However, there's a case that the Nuggets are faced with even more risk for their long-term future on their side of the equation by not giving Watson his aspired contract this summer and letting him test the waters of unrestricted free agency in a year’s time.

For starters, unrestricted free agency is a totally different beast than what the restricted market holds from the team's perspective.

While a restricted tag does make it tougher for a player to net their aspired contract because of the opportunity their current team has to match any offer sheet, that all goes away when a free agent is unrestricted. The leverage that Denver has now could evaporate in a year's time, and Watson can simply walk away for nothing in return.

A No-Trade Clause Makes Things Even More Complicated

On top of that, Watson's qualifying offer would also place a no-trade clause on his one-year deal for the 2026-27 season, and that also hurts Denver's flexibility big-time.

If the Nuggets fear they're losing Watson in the summer once getting to the middle of the season, they could only trade him to a place that he prefers; likely to a destination that could guarantee his aspired contract value.

Jan 22, 2026; Washington, District of Columbia, USA; Denver Nuggets guard Peyton Watson (8) looks on during the second half against the Washington Wizards at Capital One Arena. Mandatory Credit: Daniel Kucin Jr.-Imagn Images | IMAGN IMAGES via Reuters Connect

Add in Watson's smaller contract that would be at less than $7 million, and the returning players you could get in exchange for him would be pretty bleak, especially if interested teams can just remain patient until the summer to try and get him in free agency instead of trade.

That's a much worse situation than what Denver is currently faced with. If their negotiations now weren't already tricky, things can get even worse if he's back on the roster for just one year, has a no-trade clause, and is all but certain to find a new home come next summer.

Bottom Line

So if the outcome is between overpaying Watson just slightly, or adding on the risk of losing him for nothing come next offseason, the Nuggets' decision should be easy. They need to keep their two-way wing who's young, has a high ceiling, brings much-needed defensive tenacity, and comes fresh off a career season.

Yes, the Nuggets would face some steep tax and financial penalties if adding Watson's aspired value to the books, and might have to make further roster moves in order to alleviate that pressure in terms of their cap space.

But all of that can be resolved in due time. The most important factor of this entire situation is making sure this Nuggets roster can be a true championship contender, preserve their premier assets as securely as possible, and not risk losing out on talents like Watson for nothing.

If the qualifying offer is truly in consideration for Watson, the Nuggets need to do all they can to avoid that. Because if they can't, they might just find themselves in the worst-possible outcome of this entire ordeal.

Sign up for our free Denver Nuggets On SI newsletter, and get breaking Nuggets news delivered to your inbox daily!

Add us as a preferred source on Google