Nuggets plan to match offers for Peyton Watson, but open to sign-and-trade: Sources

The Denver Nuggets intend to match any offers for restricted free agent Peyton Watson when the NBA’s moratorium lifts on Monday, said league sources who were granted anonymity to discuss the ongoing negotiations.

However, the Nuggets and Watson’s agent, Rich Paul of Klutch Sports Group, remain apart in contract negotiations, the sources told The Athletic, and Denver is open to a sign-and-trade for the 23-year-old forward. As we’ve seen several times this offseason, the rules relating to restricted free agency have created a challenging landscape for players in that position.

The recently resolved Walker Kessler situation with the Utah Jazz is perhaps the best recent comparison to Watson’s, as Utah consistently signaled a desire to match offers for the center — and a preference to avoid a sign-and-trade — only to arrange a deal with the Lakers in the end. In that instance, the Jazz decided that the chance to land two unprotected first-round picks and two first-round swaps was better than possibly overpaying Kessler, who signed with the Lakers on a four-year, $130 million deal. But the Nuggets’ primary hope, the sources said, is to retain Watson, the fourth-year player who was taken 30th in the 2022 draft.

While it’s unclear how many teams are pursuing Watson, only the Brooklyn Nets and LA Clippers have the salary-cap space to submit the offer sheet he wants. The Clippers, league sources said, have shown legitimate interest in Watson but are also navigating their own restricted free agency situation with Bennedict Mathurin, which complicates matters. Several teams are known to have registered interest in a sign-and-trade for Watson.

Around the league, there has been a widespread belief that the Nuggets would be motivated to avoid the second apron by shedding salary this summer. But as The Athletic reported in June, Denver’s ownership has not given its front office, which is led by Ben Tenzer and Jon Wallace, a mandate to cut costs. That messaging has become even more meaningful in recent days, as the Nuggets are considered to be among the teams still in the running for unrestricted free agent LeBron James (who, coincidentally, is also represented by Paul).

Watson proved to be one of Denver’s most valuable players last season, when he averaged 14.6 points, 4.9 rebounds, 2.1 assists, 1.1 blocks and 29.6 minutes in 54 games (he started in 40) during a breakout campaign. After Nikola Jokić hyperextended his knee in late December, Watson enjoyed the best 17-game stretch of his career, norming 22.5 points, 5.6 rebounds, 2.8 assists, 1.1 steals and 1.4 blocks between then and Feb. 1. He shot a team-best 46.2 percent on 3s during this stretch, during which Denver went 10-7 and remained near the top of the Western Conference standings despite missing the three-time MVP.

But Watson suffered a Grade 2 hamstring strain during a Feb. 4 game against the New York Knicks, returned on March 22, and then re-aggravated the injury on April 1 en route to missing the playoffs. His defense, in particular, was sorely missed as Denver fell to the Minnesota Timberwolves in the first round.