One Big Reason Emerges Why Nuggets Might Not Re-Sign Peyton Watson

With the 2026-27 NBA schedule release and many teams around the league completing their rosters, excitement is building for the new season. However, the Denver Nuggets cannot get too excited yet, with plenty of work left to do.

Peyton Watson is still a restricted free agent in mid-August, and there is growing concern about his future with the Nuggets. The two sides are seemingly still far apart in contract negotiations, and the likelihood of a sign-and-trade continues to increase.

While Watson is an incredible, improving player and a versatile two-way threat, there might be a clear reason why the Nuggets do not want to give him as much money as he is asking for. ESPN's Anthony Slater recently joined Brian Windhorst's The Hoop Collective podcast and mentioned how there is some belief that Watson sat out of the first round of the playoffs because of his looming free agency.

"I covered the Nuggets-Timberwolves first-round series, and they kept calling him day-to-day, you know, maybe he'll play at some point in the series and he never did. Part of the belief was this looming restricted free agency," Slater said. "You had Aaron Gordon at the time dragging himself onto the floor dealing with a calf strain and Watson was never able to get out there. Leading into this restricted free agency that will just generate this natural sour feeling."

If there is any truth to the idea that Watson sat out of the playoffs because of his free agency, then the Nuggets should be hesitant to re-sign him at any price.

Why this is a bad look for Watson

Of course, Watson was dealing with a hamstring strain that caused him to miss 25 of the final 30 games of the regular season. After returning to action for about a week, Watson re-aggravated the injury, and it makes sense that there was simply not enough time to recover.

However, most players at this level would play through an injury if capable once they reach the playoffs. Even if the Nuggets had Watson at 80% health, he would've been a huge help against the Minnesota Timberwolves before losing to them in six games.

As a business decision, it makes sense for Watson not to risk further injury before he becomes a free agent. However, if he were able to play and chose not to for this reason, he likely lost the trust of his teammates and the coaching staff.

The Peyton Watson situation in Denver may be getting messier. 👀

Anthony Slater reports there is a belief Watson sat out the entire playoff series vs. Minnesota to protect his restricted free agency.

That could now become part of the contract standoff. pic.twitter.com/8MqK77YwVj
— Nuggets Nation (@NuggetsNationCP) August 13, 2026

For all we know, this could already be playing a factor in Watson's free agency. The Nuggets seem stern on not giving Watson the money he wants, and it could be because of what they saw in the playoffs.

This situation will likely drag into September as neither side gives in to the other's demands, but it feels like things are trending toward a scenario where Watson is no longer a Nugget. His contract demands, some production uncertainty, and this whole playoff situation are causing a rift, and there might not be as easy a way to solve it as initially expected.

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