Peyton Watson
Peyton Watson was a big part of Nuggets 2023 championship run Flickr/Steve Cheng

A blockbuster sign-and-trade that sent Peyton Watson to the Cleveland Cavaliers on a four-year, $88 million deal has given the Denver Nuggets a rare chance to cut future costs and reshape their roster around Nikola Jokic's prime.

The move could free up more than $10 million in cap flexibility if followed by another trade, potentially putting free agents DeMar DeRozan or Jonathan Kuminga within reach.

Denver agreed to a sign-and-trade that sent Watson to Cleveland on a four-year, $88 million contract. In return, the Nuggets received an unprotected 2031 first-round pick from the Cavaliers and a 2032 second-round selection from Sacramento.

Watson's departure was not simply a basketball decision. The Nuggets were facing significant financial pressure under the NBA's second apron, making it difficult to retain the 23-year-old forward on the kind of contract he eventually received.

Watson Trade Gives Denver Financial Breathing Room

Watson has emerged as an important part of Denver's future after averaging 14.6 points, 4.9 rebounds, 2.1 assists and shooting 41.1 per cent from beyond the arc in 54 games last season.

Aside from being a potent offensive player, the Nuggets may miss him more because of his defensive presence at both forward spots. He is regarded as one of the league's best shot-blocking small forwards.

However, keeping Watson on an $88 million deal would have pushed the Nuggets' luxury tax from $68 million to approximately $220 million. The trade therefore gives Denver more flexibility to reshape its roster.

The Next Salary Move Could Be Crucial

The Watson trade does not solve it all for Denver because a bigger financial issue still lies ahead for the franchise.

The Nuggets already have substantial money committed to Jokic, Jamal Murray, Aaron Gordon, Christian Braun and Cameron Johnson.

Denver's 2026-27 payroll is at roughly $217.7 million, with Jokic due $59 million, Murray more than $50 million and Gordon around $33.7 million.

That leaves Johnson's $23 million expiring contract particularly significant and he is the easiest to move given he is entering the final year of his deal.

If Denver could turn Johnson's salary into a substantially cheaper rotation piece, the Nuggets could potentially create more than $10 million in financial breathing room while adding another asset or contributor.

DeRozan Is the Biggest Attraction for Denver

DeMar DeRozan remains a free agent and could fill a key gap for the Nuggets as they look to return to championship contention.

The Sacramento Kings released DeRozan in July, making him an unrestricted free agent. He averaged 18.4 points per game for Sacramento last season and entered the market after the Kings declined to keep the final year of his contract, which would have paid him $25.7 million.

The 36-year-old would give the Nuggets something Watson could not: another proven half-court scorer capable of creating his own shot when Jokic and Murray are under pressure.

Kuminga Offers a Younger Alternative

Jonathan Kuminga is another possibility, although his situation differs from DeRozan's. Atlanta declined Kuminga's $24.3 million team option, making him an unrestricted free agent. The 23-year-old averaged 12.3 points and 5.3 rebounds in 16 games for the Hawks after arriving from Golden State.

Kuminga would provide Denver with athleticism, youth and defensive versatility, while DeRozan would offer immediate scoring and playoff experience. Neither move is guaranteed, but Watson's exit gives Denver a clearer financial path.

Denver's Big Decision on Jokic's Window

The Nuggets have effectively chosen financial flexibility over keeping every member of their young core. Now they must decide how to use it.

Trading another significant salary could create $10 million or more in additional room, potentially allowing Denver to pursue a veteran such as DeRozan or explore a younger option such as Kuminga.

For a team trying to maximise the remaining years of Jokic's prime, the Watson trade may therefore be less about what Denver lost and more about what it can afford to add next.

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