After weeks of negotiations that were heading nowhere, the Denver Nuggets have finally traded away their restricted free agent, Peyton Watson, in a move that sends him to the Cleveland Cavaliers, and they receive a 2031 unprotected first-round pick (Cavaliers) combined with a 2032 second-round pick (Kings).
Because of the looming tax bill and the restrictions imposed by the second apron, the Nuggets did not land any players in return (they only took on Julian Reese’s contract, which is expected to be waived). Therefore, with only 13 players on their roster, the Nuggets need to find a replacement to fill the mandatory 14th spot.
According to Chris B. Haynes, the senior NBA insider with NBA on Prime and NBATV, the Nuggets’ focus has now shifted to landing DeMar DeRozan on a minimum contract, as they look for ways to stay under the second apron.
“The Denver Nuggets are pivoting and have their eyes directed on six-time All-Star DeMar DeRozan, who remains a free agent in demand for contenders, league sources tell me,” Haynes wrote on X.
The 37-year-old became a free agent this summer after the Kings waived his contract. He ended the 2025-26 season averaging 18.4 points, 4.1 assists, and 2.9 rebounds while shooting 49.7% from the field and 32.0% from behind the three-point line.
This shows that the 37-year-old still has what it takes to contribute to a title-contending team like the Nuggets. But Denver’s biggest hurdle is its finances. DeRozan’s veteran minimum contract would be valued at over $3.9 million.
But sources suggest the 37-year-old expects exception money, which ranges from $6 million (taxpayer) to about $15 million (non-taxpayer). Meanwhile, the Nuggets, who are in the second apron, don’t have access to any of these exceptions. Hence, the pursuit of DeRozan can get a lot more complicated than it seems unless he agrees to take a pay cut.
The Nuggets have been interested in landing the veteran star ever since his breakup with the Kings, but the hanging sword over their heads is the second apron. They would have to compete with the Heat to land DeRozan potentially, but even with the Heat, they seem unlikely to give him the exception money they have saved for Klay Thompson.
According to Barry Jackson of the Miami Herald, the Heat prefers to use their $8 million midlevel exception on Thompson over DeRozan.
“Miami could pay Thompson $8 million of its midlevel exception to supplement whatever potential buyout he takes from Dallas… The Heat has 12 players on standard deals; the 13th would go to Thompson if Dallas buys him out and he agrees to terms.”
“The 14th could go to a center, with small forward Demar DeRozan and guard Gabe Vincent among others who have received consideration. But DeRozan wants exception money, and the Heat is holding that for Thompson,” wrote Jackson in his latest report.
Considering that the Heat are looking to space the floor around Giannis Antetokounmpo and Bam Adebayo, signing DeRozan seems like a risk of clogging the paint for Miami. Therefore, the Nuggets seem to have some chance of landing the 37-year-old in free agency, but money is not on their side.
