The Denver Nuggets didn't extend Peyton Watson before October's deadline, choosing instead to extend Christian Braun on a five-year, $125 million deal. Watson told The Denver Post that part of the reason his contract negotiations stalled was that the team wanted to avoid the second luxury tax apron (subscription required). He will hit restricted free agency next summer, so if the Nuggets want to keep him, it will complicate their finances even more.
Fans heard a lot about how Watson improved during the summer at media day and training camp. Through the first quarter of the season, those improvements were evident. He's averaging a career-high 10.3 points, 5.1 rebounds, 1.7 assists, and 0.9 steals in 27.2 minutes across 23 games (13 starts), shooting 49.2% from the field and 37.5% from three.
At media day, Ben Tenzer said he hoped that Watson and Braun would be in Denver for "a long time." The CBA says otherwise.
The Nuggets are currently $2.85 million below the first tax apron and $14.7 million below the second apron. Next season, Denver is projected to be only $1.25 million below the second apron, and that doesn't factor in a Watson extension. Spoiler alert: his salary next season won't be less than that.
Nuggets will be over the second tax apron if they pay Peyton Watson
Nikola Jokić ($59 million), Jamal Murray ($50.1 million), and Aaron Gordon ($31.98 million) sit atop Denver's payroll for the 2026-27 season. Cam Johnson, who will make $23 million, is behind Gordon, and that's the final season of his current deal. Denver could extend him next summer.
Where does that leave Watson?
That's a good question. Watson switched representation a few weeks ago, joining Klutch Sports, so his agent, Rich Paul, is one of the best in the game, if not the best. You best believe that Klutch will do everything in their power to give Watson the payday he deserves. There will be no discount.
The odds are that Denver will extend Watson a qualifying offer. The Nuggets will have the chance to match any offer sheet, but if the organization wants to continue to avoid the second tax apron, he may end up on a new team.
They could try to clear some salary before then, as Jonas Valančiūnas' $10 million salary for next season is non-guaranteed. However, even if that happened, it still probably wouldn't be enough.
Fans knew as soon as the deadline passed without a Watson extension that it meant the 2025-26 season could be his last in Denver. A few months later, the odds of that coming true have only increased.