Peyton Watson Trade Buzz Grows After Nuggets' Lonnie Walker Signing

The Denver Nuggets have officially signed a 14th player to their current roster.

According to Shams Charania from ESPN, the Nuggets have agreed to sign Lonnie Walker IV to a one-year, $3.3 million deal after reaching a separation agreement with Maccabi Tel Aviv in the EuroLeague.

Lonnie Walker IV has agreed to a one-year, $3.3 million deal with the Denver Nuggets, agent George S. Langberg of @GSLSportsGroup told ESPN. Walker was with Maccabi Tel Aviv in the EuroLeague after last playing in the NBA in 2024-25 and now enters his 8th season in the league. pic.twitter.com/tvxQc2RRjz
— Shams Charania (@ShamsCharania) August 6, 2026

The signing is good news for the Nuggets' roster, knowing that the team has finally filled out to 14 players, given that the team hasn't made a new signing since their Spencer Jones deal a week ago. It's another major box checked off from Denver's offseason to-do list, and now leaves their Peyton Watson situation as the top priority.

However, it seems like the Nuggets are still weighing the idea of a Watson sign-and-trade now a month deep into his restricted free agency. And the talks on that appear to only be getting louder and louder with time.

Where the Nuggets Stand in Peyton Watson Talks

Per Charania, following the report surrounding Walker, he noted that the Nuggets are currently in "active" talks for a sign-and-trade for Watson with multiple teams, including the Cleveland Cavaliers, Milwaukee Bucks, and LA Clippers.

All three teams have been linked to Watson in one way or another since his restricted free agency has been at a standstill. None of the aforementioned suitors have a route to bringing Watson on the roster via an outright signing, so they have to entertain a sign-and-trade deal if they truly want the Nuggets' wing.

Mar 25, 2026; Denver, Colorado, USA; Denver Nuggets guard Peyton Watson (8) reacts after a play in the fourth quarter against the Dallas Mavericks at Ball Arena. Mandatory Credit: Isaiah J. Downing-Imagn Images | IMAGN IMAGES via Reuters Connect

And to this point, the Nuggets have still seemed to have interest in Watson on a new deal, despite not being able to come to a new agreement just yet. He's a homegrown talent who fits their needs on both sides of the ball, and at the right price, Denver would certainly welcome him aboard on next year's roster.

The Possibility of a Watson Trade Keeps Getting More Real

But the Nuggets are in a bit of a tricky cap situation. They're the only team who's paying into the second apron and are already deep into the luxury tax without having paid a new contract for Watson, currently paying over $80 million in tax.

Adding Watson to the books will only dig the Nuggets into a deeper hole financially. They have the rights to pay Watson that contract, but as to whether or not ownership will be willing to pay such a steep cost for him remains to be seen. That's why a sign-and-trade remains in the realm of possibilities.

But for the Nuggets to truly consider a sign-and-trade with Watson, the return would have to be worthwhile. Some reports have hinted at Denver searching for first-round picks, or multiple; others have linked them to coveting a contributing player in return for him as well.

The Nuggets do have their choice of a few suitors for that sign-and-trade deal, and as to what they're offering is a bit of a mystery. But the idea of pivoting from Watson, while it may hurt the strength of their roster, would certainly tend to alleviate some of that financial pressure they're currently faced with.

Which route will the Nuggets take? It remains to be seen, and could be a slow process that continues to drag out a couple more weeks. At the very least, those trade offers for Watson are being listened to, and might be in real consideration if Denver doesn't see a realistic route to re-sign their budding two-way wing.

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