The Denver Nuggets’ Summer of Worry
The 2023 offseason has been a rollercoaster ride for the Denver Nuggets. In a shocking move, the Oklahoma City Thunder signed Spencer Jones to a two-year, $12 million offer sheet. The Nuggets, fearing losing their promising young wing, matched the offer sheet to keep Jones. This decision came at a steep cost, with the team now facing a repeat taxpayer status and a tax bill that has increased from $36 million to around $68 million.
The $6 million Jones will make next season is a fraction of the cost for the Nuggets. The real concern is Peyton Watson, who averaged 18 points and six rebounds on 52-44-75 shooting across 30 games between November and January. Watson’s performance makes him a valuable asset to the team, and his potential contract is a pressing issue for the Nuggets.
The Qualifying Offer: A Game-Changer for the Nuggets
The Nuggets initially offered Watson a four-year, $70 million contract, but he is reportedly considering the one-year, $6.5 million qualifying offer. This option would make him an unrestricted free agent next offseason, giving him the freedom to sign with any team. Young wings as good as Watson are scarce commodities, and if he maintains his performance, he might double the initial Denver offer on the open market.
The qualifying offer is a risk for teams attempting to retain restricted free agents, but under Denver’s specific circumstances, it’s a huge win. The team’s current tax bill would rise from $68 million to $112 million, but this is still far cheaper than the alternative of re-signing Watson to a contract worth $25 million per year. The Nuggets could find ways to cut corners and reduce their tax bill without giving up a core player.
Watson’s options are limited, with no cap space teams left in free agency. There has been sign-and-trade interest, but the Thunder’s use of Jones to push the Nuggets above the second apron complicates these negotiations. Acquiring a player from another team by signing-and-trading one of their own creates a second-apron hard cap, which the Nuggets can’t currently abide.
The Future of the Denver Nuggets
The Nuggets are juggling a number of complicated priorities this offseason. Winning the 2027 championship is one of them, along with keeping their tax bill manageable. The contractual status of Nikola Jokić is also a pressing issue, with him expected to re-sign next summer but technically able to become a free agent. Until his signature is secured, cheaping out on the roster represents an enormous risk for the team.
The Nuggets could find ways to cut corners and reduce their tax bill without giving up a core player. They’d still be at risk of losing Watson next summer, but with Cam Johnson’s contract expiring, they’d have more money to sign him to a long-term deal. If they can’t, it probably means Watson played well enough in the 2026-27 season to warrant an enormous contract, which bodes pretty well for Denver’s immediate championship pursuit.
The Nuggets are at a crossroads, and their decision will have a significant impact on their future. They need to weigh the risks and benefits of keeping Watson on a small one-year deal versus the potential rewards of signing him to a long-term contract. The clock is ticking, and the Nuggets need to make a decision soon.
