6 Potential Destinations For Nuggets RFA Peyton Watson

The Denver Nuggets are struggling to find a way to keep restricted free agent Peyton Watson. But they are in peril of hitting the second apron and finding a price that they can digest while meeting Watson's needs is proving difficult. 

How difficult? Check out these figures, provided by ESPN's cap guru Bobby Marks:

According to @BobbyMarks42,
if the @nuggets simply waived Valanciunis and then signed Peyton Watson to a $25 million/year contract, they would get hit with a tax penalty of $177 million dollars.

That’s the cost of the repeater tax.

ONE HUNDRED SEVENTY SEVEN MILLION.

— Vic Lombardi (@VicLombardi) July 6, 2026

They risk a tax penalty of  $177 million dollars if they sign Watson for $25M a year (and waive Jonas Valanciunas). 

For that reason, a sign-and-trade seems like a very real possibility. Sam Quinn of CBS Sports has listed 6 potential destinations for the valuable wing:

• Brooklyn Nets
• LA Clippers
• Charlotte Hornets
• Memphis Grizzlies
• Milwaukee Bucks
• Boston Celtics 

Watson is the ultimate 3-and-D wing. An outstanding defender who shot 41.1% from three last season.

Clippers are a frontrunner for Peyton Watson, among 6 teams that could chase the RFA

The Nets and the Clippers can easily create enough cap space for Watson, writes Quinn. The Clips have seemed like a leading contender. However, they just signed Rui Hachimura, so it's unclear whether they would still pursue Watson. But if they do, there are already scenarios being floated that would allow them to pull this off:

The LA Clippers have a path to offer Peyton Watson a 4 year, $116 million deal by frontloading John Collins’ salary in the sign-and-trade with Detroit and using their $9.1M expanded trade exception, per @YossiGozlan via @ThirdApron.

Watson’s salary would start at $27 million.… pic.twitter.com/VP88zYvbIN

— APHoops (@APH00PS) July 7, 2026

As for the other teams, big trade exceptions could put them in the Peyton Watson business: Quinn notes that the Hornets ($40.8 million), Grizzlies ($28.9 million) and Bucks ($25.5 million) each have big trade exceptions they can use to create a sign-and-trade scenario with enough room to match Watson's $25M price.

Despite having a trade exception that's big enough ($27.7 million), the Celtics would have a more difficult time because they only have around $5 million in hard cap space. If they sent out a huge chunk of salary—Paul George, he suggests—then they could potentially make it work.

The Nuggets got themselves into this mess, by giving Christian Braun a massive 5-year, $125M deal ($25M AAV) last year. Now, Watson, who is the superior player, is obviously using that as a floor and is looking for at least that much from Denver.

This will continue to be one of the more intriguing situations that will be playing out in the coming days.