Peyton Watson’s offseason of uncertainty got even more complicated on Sunday. After the Denver Nuggets matched the Oklahoma City Thunder’s two-year, $12 million contract for Spencer Jones, Watson’s situation has become even messier than he might have predicted.
NBA insider Marc Stein has the latest on Watson following Denver’s surprising decision to keep Jones and enter the second apron.
NBA Insider Shares Latest on Peyton Watson’s Contract Impasse With Denver Nuggets
Last month, Jones ($2.6 million) and Watson ($6.5 million) received qualifying offers from the Nuggets to make them restricted free agents. From seemingly out of nowhere, the Thunder and Jones agreed to a two-year, $12 million contract, putting Denver in a bind.
Denver would lose Jones, who has become a key part of the bench, if it failed to match the offer. If the Nuggets allowed the 6-foot-7 forward to leave, they could only replace him with a player willing to choose a veteran minimum.
After the Nuggets chose the second option, there are now even more questions about Watson’s future.
Stein, on Sunday’s “The Stein Line,” shared intel about Denver’s guard who had a breakout campaign this past season.
“League sources say Watson, like Detroit’s Jalen Duren, has been weighing the unappealing prospect of playing out the 2026-27 season on a qualifying offer with the intent to become an unrestricted free agent next summer. Actually doing so, mind you, means leaving millions on the table,” Stein wrote.
“The Nuggets’ initial pitches were believed to be in the $70 million range over four years, which would be well shy of the $25 million in annual average value that Christian Braun received from Denver in a five-year, $125 million rookie scale extension last October. As The Stein Line has reported previously, Watson is hoping to exceed those figures this summer.”
This past season, Watson averaged 14.6 points, 4.9 rebounds, and 2.1 assists per game, all career-high numbers. He shot 49.1%, including a career-best 41.1% from 3-point distance. Previously relied on for his defense, he has blossomed into a two-way force.
By matching the Thunder’s offer, the Nuggets’ luxury tax reportedly rose from $36 million to $68 million. If Watson is retained at his qualifying offer price, that tax could spike to at least $112 million, according to ESPN’s Bobby Marks.
At the very minimal, their luxury tax penalty will increase to $112M with the Peyton Watson Qualifying Offer. https://t.co/TLTTXxfEZ7
— Bobby Marks (@BobbyMarks42) July 27, 2026
The Milwaukee Bucks, Los Angeles Clippers, and Atlanta Hawks are reportedly sniffing around Watson.
If Denver matches any offer from any of the said teams, its luxury tax will be even more staggering.
The clean option would have been for the Nuggets to engage in a sign-and-trade deal involving Watson. However, according to NBA insider Jake Fischer early this month, interested teams were unwilling to meet the Nuggets’ asking price of two first-round picks and two pick swaps, the same haul the Utah Jazz got for Walker Kessler.
By retaining Jones, the sign-and-trade deal has become very complicated after the Nuggets became a second-apron team.
Denver can offload Aaron Gordon ($31.9 million) or Cam Johnson ($23 million) to limit its luxury tax and give Watson what he is looking for. So far, there have reportedly been no indications that the Nuggets would do that.
With so many variables and considerations, Stein sees a potential future where Watson stays in Denver for the $6.5 million qualifying offer.
