There are significant differences in contract negotiations! Denver still plans to match all offers for Watson and does not rule out a sign-and-trade.

Multiple sources familiar with the negotiations told reporters that once the NBA's free agency freeze period concludes, Denver will match any contract offered to restricted free agent Peyton Watson by other clubs. The team is not opposed to facilitating a sign-and-trade deal either.

Sources told The Athletic that there remains a considerable gap between the Nuggets and Watson's agent, Rich Paul of Klutch Sports Group, regarding contract figures. Denver is willing to explore a sign-and-trade for the 23-year-old forward. This offseason has already shown that the rules governing restricted free agents put such players in a difficult negotiating position.

The recent contract saga of Utah's Walker Kessler is the closest parallel to Watson's situation. The Jazz initially insisted they would match any offer and had no interest in a sign-and-trade, but eventually struck a deal with the Lakers. Utah concluded that receiving two unprotected first-round picks plus two pick swaps was far more valuable than overpaying to keep Kessler, who ultimately signed a four-year, $130 million contract with Los Angeles. However, sources say the Nuggets' primary goal remains retaining Watson—the 30th pick of the 2022 draft, now entering his fourth season.

It is currently unclear how many teams are pursuing Watson. Across the entire league, only the Brooklyn Nets and the Los Angeles Clippers have enough cap space to offer the kind of contract Watson is seeking. League sources indicate that the Clippers are genuinely interested in Watson, but they also face the challenge of re-signing their own restricted free agent, Bennedict Mathurin, making a dual-track operation more complicated. Several other teams have expressed willingness to acquire Watson via a sign-and-trade.

The general consensus around the league is that the Nuggets will actively shed salary this summer to avoid the second apron. However, The Athletic reported back in June that the team's ownership had not given the front office, led by Calvin Booth and Jon Wallace, a hard mandate to cut costs. That stance has only become clearer recently, as Denver is now also in the running for free agent LeBron James—who, coincidentally, is also represented by Rich Paul.

Last season, Watson had a breakout year, establishing himself as one of the Nuggets' most valuable players: he played 54 games, started 40, averaged 29.6 minutes per game, and put up 14.6 points, 4.9 rebounds, 2.1 assists, and 1.1 blocks. After Nikola Jokić missed time in late December due to a knee hyperextension, Watson entered a career-best stretch of 17 games through February 1, averaging 22.5 points, 5.6 rebounds, 2.8 assists, 1.1 steals, and 1.4 blocks. During that period, he led the team in three-point shooting at 46.2%. The Nuggets went 10–7 in those games, staying comfortably in the upper half of the Western Conference even without the three-time MVP.

Unfortunately, in a game against the Knicks on February 5, Watson suffered a Grade 2 hamstring strain. He returned on March 23, but the injury recurred on April 2, ending his season and causing him to miss the playoffs. The Nuggets lost to the Timberwolves in the first round, and they desperately lacked his defensive presence.