The Denver Nuggets‘ offseason has been highlighted by the Peyton Watson free agency, as he wants a new contract the team currently can’t afford.
Despite the Nuggets having hope earlier in the summer that they’d be able to bring back Watson on a team-friendly deal, that no longer seems likely, as the rising-star wing is attracting interest around the league for a price tag Denver wouldn’t be able to match.
At the same time Watson’s free agency rumors continue, and the Nuggets’ chances of retaining him look slimmer and slimmer, a potential replacement in the form of available veteran DeMar DeRozan could be in the future, according to new reports from NBA insider Brett Siegel.
Nuggets Peyton Watson Free Agency Situation Looks Bleak
GettyThe Denver Nuggets are looking for a high-value player and a future first-round pick in a trade involving restricted free agent Peyton Watson, ESPN’s Shams Charania reports.
Writing in his latest NBA free agency news and rumors roundup, Siegel offered extensive insight as to where the Nuggets and Watson are at this point of the summer.
What highlights the situation, and the likelihood of the Nuggets seeing Watson change teams, is Denver’s financial spot, which has only been made worse this summer by keeping Spencer Jones on a deal that results in $32 million more in luxury tax. Additionally, the team’s extension given to Christian Braun last summer, and the other major contracts on the salary cap, leave them with little room to find space for a new Watson deal.
“As things currently stand, Denver is roughly $17.6 million over the luxury tax threshold and $2 million over the second apron with 13 players on their roster,” Siegel wrote. “Aside from facing second-apron restrictions, which doesn’t allow them to aggregate salaries in trades or take back salary in a deal unless said move takes them out of the second apron, the Nuggets’ tax bill has hit a concerning level.”
As has been reported from other outlets and from Siegel, teams interested in a trade for Watson include the Los Angeles Clippers, Cleveland Cavaliers, and Atlanta Hawks, but it looks as though the Milwaukee Bucks are leading the race for the 23-year-old.
“Milwaukee is the team many around the league have pointed to as the most likely to land Watson in a sign-and-trade,” he added.
The Los Angeles Lakers also previously had interest, but there have been no recent or major links of them swooping in over one of the previously mentioned franchises.
But regardless of how much the Nuggets might not want to keep Watson, a sign-and-trade to move him elsewhere feels very likely. He’s a solid player with a great wing skill set, but Denver just doesn’t have the money to keep him.
Nuggets Could Land Replacements In A Trade, DeMar DeRozan Another Option
GettyPORTLAND, OREGON – APRIL 12: DeMar DeRozan #10 of the Sacramento Kings looks on during a timeout in the first half against the Portland Trail Blazers at Moda Center on April 12, 2026 in Portland, Oregon.
Reporting more in depth on the Bucks, who could be the frontrunners to land Watson, Siegel named a few players Denver could bring back if a trade were to ever happen this summer.
The Nuggets wouldn’t want to lose Watson in free agency for nothing, which is why Milwaukee offering a few players or assets to bring in his services could make the 2023 champions more interested in a deal. However, instead of a draft pick, the Bucks appear keen on sending out two players for the Denver to replace Watson with, as Siegel wrote.
“Jaime Jaquez Jr. and AJ Green are also two players that would fit Denver’s style of play, especially Green as an off-ball shooter. ClutchPoints has confirmed that the Bucks have yet to offer a first-round pick in their framework for Watson, which was first reported by The Athletic on Thursday.”
Considering his value around the league and expected next contract valued at roughly $20 million, the Nuggets could acquire Jaquez and Green, but that wouldn’t necessarily fix their salary cap issues, as picks are more likely what they are looking for.
But as it relates to a Watson replacement, another, cheaper name could be on the table: DeMar DeRozan.
DeRozan was waived by the Sacramento Kings and is currently an unrestricted free agent, with the Nuggets one of several teams linked to the veteran wing player.
“The Nuggets hold interest in signing veteran swingman DeMar DeRozan to a minimum contract, sources said,” Siegel reported.
However, the 37-year-old looks keen on earning more than the minimum $3.8 million per year, which could complicate any hopes of Denver adding his services, even if Watson is traded.
“To this point, DeRozan has been assessing the market for teams with part of or all of their mid-level exception available,” the insider added. “It doesn’t appear as if DeRozan wants to take a minimum contract after being waived by the Kings.”
Denver has put itself in a tough situation with their financial moves over the past few years, and at this point, the impending result of Watson’s free agency appears to be the latest casualty of that. His future with the Nuggets looks bleak, leaving the team now searching for the best possible sign-and-trade and adding other talent for next season.
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