Trade Grade: Nuggets Send Peyton Watson to Cavaliers in Three-Team Deal

The Peyton Watson saga is over. After spending the entire 2026 offseason wondering what the Denver Nuggets had in store for their restricted free agent, they have finally found a solution, and it is not what fans wanted.

Per ESPN's Shams Charania, the Nuggets have completed a three-team sign-and-trade that sends Watson to the Cleveland Cavaliers, Max Strus to the L.A. Clippers, and a 2031 unprotected first-round pick (via CLE) and a 2032 second-round pick to Denver.

With the Cavaliers, Watson will sign a four-year, $88 million deal to secure his future and help All-Stars Donovan Mitchell and Evan Mobley as they hope to get over the hump in the Eastern Conference.

BREAKING: Cleveland, Denver and the Clippers have agreed on a trade sending Peyton Watson to the Cavaliers, Max Strus to LA, and an unprotected 2031 Cavs first-round pick and a 2032 Kings second-rounder to the Nuggets, sources tell ESPN.

Watson will sign a new four-year, $88… pic.twitter.com/hXqL3JvsU4
— Shams Charania (@ShamsCharania) August 19, 2026

So, in short, the Nuggets are letting Watson go for a first-round pick and a second-round pick. If fans were not already upset with this entire situation, they certainly will not be pleased with the result.

Trade Grade: D-

Let's start with the positives. One, the Nuggets save money. End of list.

Watson signed to the Cavaliers on a four-year, $88 million deal ($22 million AAV). The Nuggets weren't willing to cough up $22 million per year for their only promising young player? The 23-year-old wing is coming off a breakout season and was one of the only players on last year's roster who was able to make a legitimate difference on both sides of the ball.

When Christian Braun had a breakout year, they handed him a five-year, $125 million contract with no questions asked. Sure, now that his contract is coming back to bite them, they might have had to think twice about making the same "mistake" with Watson, but this is a team trying to compete for a championship while three-time MVP Nikola Jokic is still in his prime.

Please, go further into the second apron, pay a hefty luxury tax, dump salaries if you have to. But why are they letting Watson go for scarce draft capital?

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. | IMAGN IMAGES via Reuters Connect

This would have a much different outlook if the Nuggets got a better return for Watson. Instead, this was treated as nothing more than a money-saver. The Nuggets are already over the second apron, and if they re-signed Watson to this contract, they would have a historic luxury tax bill to pay.

This trade signals that the ownership was not willing to pay the tax, and that the front office did not feel confident enough in their other players' trade values to choose Watson over someone like Cameron Johnson.

Now, the Nuggets have a concerning bench unit of Tyus Jones, Julian Strawther, Spencer Jones, DaRon Holmes, and Marvin Bagley III, with deeper guys like Lonnie Walker IV (on a training camp deal), Alpha Diallo, Zeke Nnaji, and Trevon Brazile available to turn to as well. With Watson, that group is much more promising. But until they find a way to actually replace Watson, there might be too many concerns to take this team seriously this season.

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