The Denver Nuggets shaved at least $100M off their payroll for the 2026-27 season after executing the Peyton Watson trade on Wednesday. And with it, they created a trade exception worth approximately $10.2M.
However, the Nuggets, who remain $1.3M above the second apron, are not allowed to use their newly created trade exception, per multiple insiders.
The Third Apron’s Yossi Gozlan broke down Denver’s current situation.
“The Nuggets are currently prohibited from using their newly created trade exception,” Gozlan reported via X.
“As a second apron team, they aren’t allowed to A: take back players under contract in a sign and trade or B: use a trade exception created by sign and trading a player.
“They could unlock it by getting under the second apron. Using it would then hard cap them to the second apron.
“They’re unlikely to use it this season anyway due to their payroll situation.”
Instead of a roster upwards of $400 million, they’ll have a $300 million roster after signing their 14th player.
They’ll also create a trade exception worth at least $10.2 million.
Denver Nuggets Gain Crucial Asset
All things considered, the Nuggets, who didn’t have a single tradeable first-round pick before the Peyton Watson trade, now have an asset they can use in potential deals. As reported by ESPN’s Shams Charania, they acquired an unprotected 2031 first-round pick from the Cleveland Cavaliers, which is said to have a lot of value.
ESPN’s Bobby Marks provided additional details on the Nuggets’ cap situation.
Some notes for Denver
– Denver is 1.3M over the 2nd apron and have 2 roster spots open
– They will create a trade exception for 50% of PW salary.
However, they are not allowed to use and exceed the 2nd apron because this is a s/t.
– The Nuggets had zero tradeable firsts prior to this trade.
Denver Nuggets Not Done Making Moves?
The Nuggets will fall under the second apron if they can successfully move Zeke Nnaji’s $7.4M salary. The move will also allow unlock their $10.2M trade exception to add another useful piece to surround Nikola Jokic, Jamal Murray and Aaron Gordon. However, as Gozlan noted, such a move would hard-cap them to the second apron.
Insider Marc Stein reported earlier this month that the Nuggets have shopped Nnaji around the league but haven’t found any takers. They reportedly attached a second-round pick to try and get off the big man’s contract. Now that they’ve gained additional draft compensation from the Cavaliers, could they revisit those talks?
The loss of Watson means the Nuggets are expected to stick to their starting five of Jamal Murray, Christian Braun, Cameron Johnson, Aaron Gordon and Nikola Jokic last season. The Nuggets were ousted in the first round of the playoffs by the Minnesota Timberwolves despite starting the series as heavy betting favorites.
Denver Nuggets Dealt Bad News After Peyton Watson Trade