The Denver Nuggets are already staring at a brutal financial setup, and Peyton Watson could push it into territory the NBA has never seen.
Denver’s offseason started with a heavy hit after re-signing Spencer Jones to a two-year, $12 million deal. That move sent the Nuggets into the second apron and left them with a projected $68 million luxury tax penalty, the biggest in franchise history. And that was before the roster was even full, with two spots still open.
Watson remains in restricted free agency, and the expectation is that he lands a new Nuggets deal in the range of $18-25 million per year. If Denver brings him back without making other cost-cutting moves, the bill gets wild in a hurry.
Even if Watson only signs his qualifying offer of $6.5 million, the Nuggets would still be projected to owe $112 million in tax penalties. If he lands a deal worth $23 million per year, Denver’s tax bill would jump to $231 million, which would be the largest in NBA history by a wide margin. Add that to a payroll sitting around $240 million, and the roster would cost roughly $470 million.
There have only been six cases in league history where a team has paid more than $100 million in luxury tax penalties. The current high-water mark belongs to the 2023-24 Golden State Warriors at $176.9 million, followed by the 2021-22 Warriors at $170.3 million, a team that also won the NBA Finals. If the Nuggets are operating anywhere near half a billion dollars for one roster, the expectation would be clear.
That kind of spending is not exactly a badge Denver is chasing. It would make any playoff failure feel even heavier. Still, if the Nuggets believe this is the path that gives them the best chance to contend for a title in 2027, and ownership is willing to absorb the cost, that is the road they may take.
The Watson decision is the one that changes everything. Denver has already found some cheaper ways to fill out the roster, signing Marvin Bagley III to a veteran minimum and adding rookie Trevon Brazile and EuroLeague standout Alpha Diallo on deals worth less than the veteran minimum. But those savings do not erase the pressure created by Watson’s next contract.
There is also the Cameron Johnson piece to this. The Nuggets are reportedly firm about keeping his expiring $23.1 million contract, which only adds another layer to the financial squeeze.
Even so, Denver does have some time to work the numbers. The team can wait until the NBA trade deadline in February to settle its financial picture, which leaves open the possibility of moving Johnson during the regular season if it needs relief.
For now, the priority is obvious: keep Watson, then sort out the rest later. The 23-year-old wing is coming off a breakout season, and Denver needs that kind of production back in the fold. Just don’t expect the Nuggets to be thrilled about the idea of a luxury tax bill north of $200 million.
Still, the organization is clearly willing to take on real financial risk to keep itself in the title mix. Some fans wanted bigger changes, but a mostly intact roster with a few depth tweaks may end up being Denver’s best shot.
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Nuggets May Face A Brutal Choice On One Promising Young Wing
Jonathan Kumingas restricted free agency is already drawing plenty of attention, with the Cavaliers and Lakers both in the mix and Cleveland planning a meeting to explore a sign-and-trade. Kuminga is reportedly looking for a deal that tops $20 million annually, which has pushed the market into territory where teams are weighing not just talent, but fit, cost and the ripple effects of any move they make.
For Denver, the more uncomfortable part is that Watsons name has started to surface in the same kind of trade chatter. The young wing is expected to command an $80 million contract, and while that kind of commitment reflects real belief in his upside, it also puts the Nuggets in the middle of a decision that could force them to choose between keeping a promising piece and navigating the realities of a pricey roster. [Read more 🡒]
Christian Braun Is Suddenly Caught In Denvers Biggest Wing Debate
Christian Braun was supposed to be part of Denvers wing solution, not the latest reason the position feels unsettled. He signed a five-year extension last October, a move that signaled real confidence in his long-term fit, but his play has dipped since then and the scrutiny around him has only grown as the Nuggets sort through the rest of their wing rotation.
Peyton Watsons contract situation has only sharpened the focus on Braun, because Denver may be forced to make a call on how it wants to build that part of the roster. For Braun, the timing is awkward and the pressure is obvious: the money is in place, the expectations are higher, and the Nuggets need more from him if he is going to quiet the debate that has suddenly landed on his shoulders. [Read more 🡒]
Nuggets May Have Finally Found An Answer To Their Biggest Defensive Flaw
The Nuggets have spent the past two seasons trying to patch a defensive rating problem that showed up again in the playoffs, and this summer they added a player whose value is supposed to come on the less glamorous end of the floor. The hope is that a rookie free agent with a reputation for perimeter defense can give Denver a different kind of lineup option, one that helps the team survive against quicker guards, bigger wings and the constant pick-and-roll stress that has made life difficult.
His track record overseas suggests there is real reason to believe in the fit, even if the offensive side of the equation is still a work in progress. Denver is betting that Nikola Jokic can smooth over those limitations by creating easy looks, while the real test will be whether this new defensive piece can handle the kind of assignments the Nuggets have lacked when games tighten and matchups start to dictate everything. [Read more 🡒]