The Denver Nuggets are in active trade talks with multiple teams regarding a potential sign-and-trade for restricted free agent Peyton Watson, according to Shams Charania. The Cleveland Cavaliers, Milwaukee Bucks and Los Angeles Clippers are among the teams involved, with both player and draft-pick packages being discussed.
“They are in active trade talks with multiple teams on a Peyton Watson sign and trade,” Charania said. “That includes Cleveland, Milwaukee, and the Clippers. There are combinations of player packages, pick packages as well. So either they’re gonna trade him, or you could potentially have him back on a 1-year, $6.5 million qualifying offer.”
Watson’s future has become one of Denver’s biggest offseason decisions after the 23-year-old forward posted career-best production in 2025-26. He averaged 14.6 points, 4.9 rebounds, 2.1 assists, 0.9 steals and 1.1 blocks in 54 games while shooting 49.1% from the field and 41.1% from three-point range.
The Nuggets have reportedly offered Watson a five-year contract worth approximately $70 million, while his camp is believed to be seeking a deal closer to the five-year, $125 million extension Christian Braun received before the 2025-26 season. The gap between the two sides has created a situation in which a sign-and-trade could provide Denver with more financial flexibility.
Denver is already operating near the NBA’s second apron while maintaining a roster built around Nikola Jokic and Jamal Murray. Jokic averaged 27.7 points, 12.9 rebounds and 10.7 assists in 65 games last season, while Murray posted 25.4 points and 7.1 assists in 75 games.
Marc Stein previously reported that Denver could be forced to make a trade if it retains Watson. Stein identified Zeke Nnaji as the Nuggets’ preferred salary-clearing trade candidate, although attaching draft capital could be difficult because Denver has limited future assets.
Nnaji averaged 3.7 points and 2.6 rebounds in 52 games last season, giving him a considerably smaller role than Watson. Moving his contract could address part of Denver’s financial problem without sacrificing a young wing who became an important contributor during the 2025-26 season.
The Nuggets finished 54-28, third in the Western Conference, but their season ended in the first round with a 4-2 loss to the Minnesota Timberwolves. Watson’s development gives Denver another rotation piece around Jokic and Murray, but his contract situation now puts his future with the team directly against the franchise’s salary-cap constraints.
If Denver cannot find an acceptable sign-and-trade, Watson could return on his $6.5 million qualifying offer for the 2026-27 season. That would preserve the Nuggets’ ability to retain the forward while postponing the long-term contract decision, but it would also leave his future unresolved beyond next season.
