The Denver Nuggets decided Spencer Jones was worth keeping around. The price tag for that conviction just doubled.
By matching the offer sheet Jones signed elsewhere, the Nuggets triggered a $32 million spike in their luxury tax bill — from $36 million to $68 million — and crossed into the NBA’s second apron, according to Shams Charania. That’s the league’s most restrictive financial territory, where contracts can’t be aggregated in trades, draft picks get frozen, and the margin for roster error shrinks to the width of a sideline chalk line.
The Nuggets are now buried in tax penalties but aren’t trapped. Charania noted the front office could shed salary through in-season trades, giving them a valve to release pressure if the numbers get ugly enough. Whether they’ll actually pull the trigger is a different conversation — this is an organization that has historically treated the luxury tax like a furnace bill in July: something to be acknowledged and then ignored until it becomes an emergency.
The Jones match was the appetizer. The main course is Peyton Watson.
Denver’s next order of business, per Charania, is navigating the restricted free agency of the 23-year-old forward while the Atlanta Hawks, Milwaukee Bucks, and Los Angeles Clippers circle. The Athletic reported that Milwaukee has emerged as a potential sign-and-trade suitor, joining the Clippers — who are in a holding pattern after the Kawhi Leonard trade with Toronto was paused by the NBA’s ongoing investigation — and the Hawks, who recently declined Jonathan Kuminga’s team option.
Watson is the kind of player every front office says it wants and few actually develop. A 6-foot-8 wing who broke out last season averaging nearly 15 points per game, he dropped a career-high 35 on Washington and went for 30 and six rebounds in a January win over Boston that Nikola Jokić sat out. He also showed a scoring package that hadn’t been visible in his earlier years — the kind of two-way wing archetype that doesn’t grow on trees, as The Athletic put it.
Then the hamstring grabbed him. A recurring strain first shelved Watson in February and ended his season in April. Without him, Denver’s lack of athleticism got exposed in a first-round playoff loss to Minnesota.
The Nuggets value Watson significantly, league sources told The Athletic, and believe they’re positioned to retain him. But the math is unforgiving. Denver is already over the tax threshold and could approach or exceed the $222 million second apron if Watson commands an eight-figure annual salary. The roster around him carries its own weight: Christian Braun’s five-year, $125 million extension hasn’t delivered to expectations yet, the Cam Johnson trade that sent Michael Porter Jr. to Brooklyn hasn’t panned out as hoped, and Tim Hardaway Jr. departed for Miami this summer.
Three teams pursuing Watson will almost certainly need the sign-and-trade route, which layers complications on top of complications. Denver’s conundrum is finding a number that works for the player without gutting the payroll — a balancing act that makes a nose tackle’s two-gap assignment look like a walk in the park.
The Nuggets bet on Jones. Now they have to figure out whether they can afford to bet on Watson too — or whether the second apron eats them alive before the trade deadline gives them a way out.
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