No matter how the current season concludes for the Denver Nuggets, a wave of massive storylines will dominate the offseason in the Mile High City. The most critical development to monitor is Nikola Jokić’s supermax extension, which appears to be a near-certainty unless a major crisis erupts.
Among the uncertainties, however, the future of Peyton Watson stands out as the most fascinating situation. Last fall, the Nuggets had the opportunity to sign rookie-scale extensions with players entering their fourth year. They opted to lock up Christian Braun on a five-year, $125 million deal—a move that seemed reasonable at the time—but passed on reaching an agreement with Watson.
Fast-forward several months, and Watson has emerged as a budding star. He has developed into one of the Nuggets’ premier two-way players and, in the eyes of many, has become a more impactful contributor on both ends of the floor than Braun. It is now evident that P-Wat should be a foundational piece of Denver’s future. Yet, due to the team’s previous financial commitments, keeping him will be anything but straightforward.
That challenge intensified on Monday when Shams Charania of ESPN reported that the NBA’s salary cap for the 2026-27 season is now projected at $165 million—$1 million lower than earlier forecasts. The luxury tax line, first apron, and second apron have all shifted downward by the same amount. Given owner Josh Kroenke’s past statements, the Nuggets are expected to avoid the second apron next season, meaning they now have $1 million less flexibility to fill out the roster.
Nuggets Must Get Creative to Keep Watson This Summer
With Watson headed for restricted free agency, he is poised to be one of the hottest commodities on the market. Denver’s swelling payroll, however, will make it extremely difficult to match rival offers without crossing into the second apron—a line the organization has signaled it wants to stay under.
The Nuggets are already committed to more than $198 million next season in guaranteed salaries for their projected starting five: Jokić, Braun, Jamal Murray, Aaron Gordon, and Cam Johnson. They also owe Zeke Nnaji $7.46 million and hold a non-guaranteed $10 million deal for Jonas Valančiūnas.
Even if Denver sheds both of those backup-center contracts, the five starters alone will consume nearly $200 million, while the second apron is now projected around $222 million. That leaves less than $24 million to cover at least nine additional roster spots.
Basic math shows there simply isn’t enough room to make a competitive offer to Watson. The only realistic path to retaining him appears to be trading one of the current starters. This was already a tightrope situation before the latest cap reduction; the lower projections have now made it even more unavoidable.
Nuggets general manager Ben Tenzer, assistant GM Jon Wallace, and the rest of the front office face an enormously complex summer. They cannot afford to mishandle this pivotal decision.
The coming months will test Denver’s creativity and willingness to make tough choices if they hope to keep their rising two-way talent alongside Jokić and the rest of the core.