Peyton Watson could become giant roadblock in Nuggets offseason plans

The Peyton Watson-Denver Nuggets standoff in negotiations for the restricted free agent is entering the third week of the official offseason with no current signs of that ending anytime soon. The longer the stalemate lasts, the longer the Nuggets may have to wait before making any free-agent additions or trades to fill out the roster. Watson could end up being a giant roadblock that won't clear until the fall if last year's Golden State Warriors offer any precedent.

With the Nuggets pressed right up against the NBA's second apron tax penalty threshold, every million dollar counts, as it could lead to extra millions being paid out by the franchise via huge fines. One report showed the Nuggets facing a hefty $177 million tax bill by simply re-signing Peyton Watson to a contract in the $25 million per year range and going into the second-apron. That seems unfeasible for the Nuggets to pay.

So the Nuggets are likely looking at a potentially lengthy process to save every last million, and if last year's Warriors were any indication, it could be a while before the Nuggets complete the roster.

The Nuggets could be held up by Watson for a bit

Last year, the Golden State Warriors were in contentious negotiations with Jonathan Kuminga, and they didn't reach an agreement with the restricted free agent until September 30th. The very next day, October 1st, the Warriors completed their roster build-out. They signed Al Horford, De'Anthony Melton, and Seth Curry to a training camp contract.

It's a mirror of the Nuggets this year. The Nuggets currently have three open roster spots, plus two two-way slots available. One spot will be taken by Watson if the extension agreement is reached, and two other final roster spots can be filled.

Once Watson signs or gets traded, they'll have a much clearer vision of their tax status in 2026-27. Likely, the Nuggets will be looking to stay under that second-apron threshold, as the Oklahoma City Thunder and NBA Champion New York Knicks plan to as well. The taxes and roster construction penalties are brutal, even for billionaire owners.

The Nuggets have already signaled they're trying to minimize their tax burden by signing Alpha Diallo and Trevon Brazile to rookie-minimum contracts instead of finding a veteran at a higher price point.

It's a double-edged sword too, because the longer the Nuggets have to wait to sign anyone, the more chances they have to miss out on targets they wanted. The P-Wat roadblock could get real this summer, and Nuggets fans could be waiting for a while to see what the final roster looks like.

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This article was originally published on nugglove.com as Peyton Watson could become giant roadblock in Nuggets offseason plans.