Following the Cleveland Cavaliers‘ swift and painful Eastern Conference finals exit at the hands of the eventual champion New York Knicks, an awkward offseason cloud hung eerily in the atmosphere. Not only was there a strong sense of doubt as to whether that iteration of the team could return to that stage from a basketball standpoint, but its future altogether was in question.
Three months later, at least one of those questions has been answered. Donovan Mitchell committed his future to the franchise, signing a four-year, $273 million extension. His running mate, James Harden, agreed to a three-year, $97 million fully guaranteed contract Thursday, sources told Yahoo Sports. And as of Wednesday night, another reinforcement arrived.
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In the latest installment of the “Anything but the Knicks” campaign, the Cavaliers reportedly acquired restricted free-agent wing Peyton Watson in a sign-and-trade deal involving the Nuggets and Clippers. Sharpshooter Max Strus was sent to LA and a 2031 unprotected first along with a 2032 second-rounder headed to Denver. Upon joining Cleveland, Watson will sign a four-year, $88 million contract.
(According to sources close to Harden, the veteran, having seen how rival teams in the conference had beefed up, is fully onboard with Watson’s arrival and decided to delay his negotiations to give Cleveland the opportunity to upgrade its scoring and defense — while also keen to avoid a previous situation with the Clippers with non-guaranteed money on just a two-year deal.)
We’ll get into what this all means for Cleveland shortly, but I can’t quite grasp how fascinating this is from a Nuggets perspective. Typically, restricted free agents don’t hold much leverage over their incumbent teams when it comes to negotiations (see Jalen Duren, Bennedict Mathurin, Tari Eason, the list goes on). But how and why Watson’s situation played out differently is worth mentioning. The whispers of the 23-year-old’s unhappiness with how Denver valued him, believing he should have been on par with teammate Christian Braun (earning $25 million annually) grew louder as the offseason dragged on, as well as the list of suitors eagerly waiting in the wings for an opportunity to capitalize. This, in conjunction with the Nuggets’ limits on their financial flexibility and desire to generate some breathing room — thanks in large part to oddly matching a $12 million offer sheet for Spencer Jones and a realization of their own ceiling — created an environment in which Watson could land in a desired spot.
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(There’s a possible Windhorst-level, Charlie Day whiteboard-type conspiracy afoot, one that ties franchise cornerstone Nikola Jokić, his upcoming 2027 free agency, unwavering European interest, the Nuggets’ internal destruction of contention status and preparation for a rebuild, all while shaving $100 million off their books and collecting a first-round pick in the process.)
Shifting back to the Cavs and Watson, a handful of execs believed the Clippers, with a hoard of future firsts — one of the Nuggets’ goals in any deal — had the upper hand to acquire Watson and he could have ended up there. But Cleveland has now quietly assembled one of the more balanced rosters in the NBA. I think. We’ve seen this story before to some degree, the organization’s never-ending quest for the right complementary piece alongside Mitchell, Harden, Evan Mobley and Jarrett Allen — De’Andre Hunter, Dean Wade, Strus all didn’t pan out for one reason or another.
Teams that have committed hundreds of millions toward a core of players, the ones that are hell-bent on chasing championships, make a number of decisions based on postseason outcomes and observations. And it was painstakingly obvious watching those four games against the Knicks that the Cavs had no answer on the wing for New York’s flurry of offensive talent. Adding Watson, a 6-foot-8 physical wing with a 7-foot wingspan, is at least a conscious effort to course-correct a glaring weakness.
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According to Basketball Index, Watson finished the 2025-26 regular season in the 99th percentile in defensive positional versatility, 98th percentile in isolation defense and 97th in matchup difficulty. In layman’s terms, Watson is expected to shoulder quite the perimeter burden at that end of the floor, with Mitchell and Harden’s limitations well-known and head coach Kenny Atkinson’s preference of keeping Mobley and Allen near the rim. Dive a bit deeper into the analytical world, and Watson’s defensive value persists. ESPN’s Net Wins Above Replacement metric grades Watson as the third-most-impactful defender last season, behind Bruce Brown and the Joker. Per NBA RAPM, Watson is in the 96th percentile in shot-contest rate, 66th in contest differential, 91st percentile in rim-contest rate and, more importantly, does all of this while keeping his fouling down. Considering the fact that Cleveland finished the year 15th in defensive rating and 12th in the playoffs (all while posting a top-10 deflection rate and top-half recovery rate), Watson’s presence should solidify the Cavs standing at that end of the floor. (For what it’s worth, Bball-Index’s cool lineup projection tool actually has the biggest impact on the offensive end with Watson plus the core four.)
Whether this is a true needle-mover remains to be seen, however. Yes, Watson is a proficient floor spacer that has improved in volume and efficiency in each of the last three seasons, shooting 41% from deep on nearly four attempts per game this past year. But his true value as a complementary piece requires much more than spot-up shooting. One of the worst-kept secrets and a huge issue with the Cavs’ offensive approach is how much usage is funneled to Mitchell, with the expectation that his creation doesn’t solely help himself. I find myself thinking about this more often than I should.
Another potential issue, aside from Mitchell’s high turnover rate, Harden’s postseason woes, Mobley’s somewhat stunted development and Allen’s limitations as a traditional big, is whether Watson can truly be the connective tissue they need. Watson’s usage this past season was the highest it’s been since being drafted, but there hasn’t been much improvement as a tertiary playmaker. Now, if the argument is how many opportunities would one truly have alongside the likes of Jokić and Jamal Murray, that’s a fair rebuttal. But that umbrella of comfort is no longer applicable now, and Watson will be expected to contribute in that department.
(Screenshot from nbarapm.com)
(Screenshot from nbarapm.com)
(To Watson’s credit, he’s shown an ability to use his functional athleticism in transition and can cut and finish at the rim effectively. Atkinson should be able to find the sweet spot between continuing his offensive development as an isolation talent and creator while maintaining optimal gravity — 98th percentile in Denver, per Bball-Index.)
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Whether this is the right move for Watson and Cleveland remains to be seen over the next few months. It’s clear, however, that the Cavaliers aren’t willing to simply sit on their hands while the Knicks reign supreme and the 76ers, Pacers, Heat, Raptors and others continue to make aggressive offseason moves to position themselves for a fight. This is the group, for better or worse, and Watson is the latest reason why.
