The Denver Nuggets may be approaching a tough decision with Peyton Watson, and the rest of the league is paying attention. According to Bennett Durando of the Denver Post, extension talks between Watson and the Nuggets never reached a deal before the season, setting the stage for a costly offseason. Watson is now thriving in a contract year, and league sources believe his next deal will likely fall outside Denver’s financial reach.
Watson is putting together the best season of his career. He is averaging 10.5 points, 4.8 rebounds, and 1.6 assists while shooting 50.3% from the field and an impressive 39.1% from three. At just $4.3 million this season, he has been one of the best value contracts on the roster. That value is about to disappear. As a restricted free agent next summer, Watson could command an average salary between $10 and $15 million.
That is where Denver runs into trouble. The Nuggets are already over the first luxury tax apron and will have only about $2.8 million in flexibility this offseason. Extensions for Aaron Gordon and Christian Braun are kicking in, tightening the books even further. Even if Denver wants to keep the 23-year-old star, the numbers suggest they simply cannot compete with outside offers.
1. San Antonio Spurs
One team that makes sense is the San Antonio Spurs. The Spurs are trending upward as they stand 3rd in the West with a 20-7 record. They have leaned heavily into building around young, versatile players.
Watson fits that timeline perfectly. San Antonio is expected to have over a potential $10 million in cap space, and while that alone does not cover a $10 to $15 million deal, the Spurs have been known to be willing to get creative when they believe in a player. Watson’s defensive instincts, length, and improving offense would slot cleanly next to their developing core.
2. Memphis Grizzlies
Another strong option is the Memphis Grizzlies. Memphis has been searching for stability on the wing, and Watson could provide exactly that. He brings size, athleticism, and a growing confidence as a scorer without needing the ball constantly.
The Grizzlies are projected to have more than a potential $23 million in cap space this offseason, giving them the room to make a serious offer without gutting their roster. They are currently eighth in the West with a 13-14 record, and they need a solid wing option next to Ja Morant and Jaren Jackson Jr.
For a team looking to rebound and solidify its starting group, Watson checks several boxes.
3, Detroit Pistons
The Detroit Pistons are another team to watch. Detroit has taken real steps forward and continues to surround its young guards with capable two-way players. The Pistons have stunned the NBA world with their rise, as they stand first in the East with a 21-8 record.
Watson would be a natural fit alongside Cade Cunningham, bringing defense and off-ball scoring. The concern for Detroit lies in timing. Upcoming extensions for Jalen Duren and Jaden Ivey could complicate their flexibility, as they have over potential $26 million in cap space. Still, if the Pistons view Watson as a long-term piece, they could move early before those deals fully kick in.
For Denver, the situation is frustrating but familiar. They drafted and developed Watson into a reliable rotation player, only to watch him price himself out of town. For Watson, this season has been about proving he belongs in a bigger role, and he has done exactly that. The Nuggets may not be able to keep him, but they have helped shape a player who is about to get paid.
