The Denver Nuggets are currently the only team in the NBA that is still operating in the second apron this summer. As a result, they lost a promising young talent in Peyton Watson this offseason because the second-apron restrictions severely handcuffed the offers they could make.

Consequently, the Nuggets were expected to look for trade destinations for Cameron Johnson and Christian Braun to create the salary cap space to retain Peyton Watson.

But reports now suggest that the rest of the league was also aware of the financial woes looming over the Nuggets, and some teams apparently tried to take advantage of it.

“Rival teams eyed Denver’s cap sheet and tried to take advantage of it. Hoping the Nuggets were desperate to avoid the second apron, those teams asked Denver to give up draft picks along with Johnson, multiple sources said,” wrote Bennett Durando of the Denver Post.

“It wasn’t necessarily because Johnson’s contract genuinely has negative value. He ranked eighth in the NBA with a 43% 3-point clip last season. It was a matter of leverage and opportunism. The Nuggets rebuffed any such efforts.”

“They also received at least one legitimately good offer for the 30-year-old wing, according to a league source. They still turned it down, viewing Johnson as an impactful starter,” he further added.

So despite being on an expiring $23 million contract, Cameron Johnson wasn’t highly in demand in the trade market for the Nuggets.

Their only other hope was to pray for a miracle that Watson accepts a discounted deal to stay with the team instead of being adamant about his initial demands. They offered him a five-year, $70 million deal.

Durando reports that Watson’s representation viewed this as disrespectful (since he thought he was more valuable than Christian Braun) and created uncertainty over Watson’s future in Denver, as it strained the relationship between the two sides.

“Claiming that organizational trust in Watson had taken a hit, the Nuggets drew a line in the sand at the beginning of free agency. They offered a four-year contract with an ascending salary in the range of $18 million per year, with a team option, multiple league sources said.”

“Whatever reservations the team had, it still thought highly enough of Watson to pursue an extension with him — for the right price. But dependability and maturity were concerns on Denver’s end, while Watson’s side viewed any such assertion as disrespectful, casting a shadow over the negotiation.”

“The initial offer was turned down immediately. The Nuggets kept it on the table but never returned with a new one,” Durando further added.

The second apron not only imposes a hefty luxury tax bill on a team, but also comes with financial restrictions like temporarily blocking their 2034 first-round pick from being tradable, losing access to trade exceptions, cash-usage limitations, and an inability to aggregate multiple players to match a salary for a single player in a trade.

Watson had a blowout season in 2025-26, averaging 14.6 points, 4.9 rebounds, and 2.1 assists while shooting 49.1% from the field and 41.1% from beyond the arc.

But he aggravated a hamstring injury in April that he had been recovering from since February, and that arguably became the beginning of the end of Watson’s time in Denver.

Denver had already extended Christian Braun last summer, and near the playoffs, uncertainty remained about whether Peyton Watson would return from his hamstring injury.

The Nuggets were reportedly pressuring Watson to return. But apparently, Rich Paul intentionally asked Peyton Watson not to play in the playoffs. A level of mistrust seemingly grew between Watson and the front office, which led to difficult and awkward negotiations.

“Meanwhile, the Nuggets and Watson were nowhere close to a contract agreement. Watson’s side had asked for north of $25 million annually at the outset, believing him to be worth more than Braun, who was coming off his worst season.”

“Both sides began to explore sign-and-trade options. Denver took calls from the Clippers, Bucks, Hawks and Trail Blazers. Nothing gained much traction,” Durando wrote.

“Sixth Man of the Year runner-up Jaime Jaquez was floated in preliminary talks with Milwaukee, but those conversations were entirely conceptual — the Bucks never made an official sign-and-trade offer, league sources said. Denver would’ve been intrigued by the possibility of adding him if an offer had materialized.”

“Kris Dunn was another potential player brought up in conversations with the Clippers, but Denver wouldn’t have agreed to a deal involving the 32-year-old guard without also getting draft capital back from Los Angeles, a source said.”

“Pulling that off would’ve been difficult because for the Nuggets, taking back any salary in a sign-and-trade would hard-cap them at the second apron by rule, meaning they would need to send out another player in addition to Watson.”

“Zeke Nnaji’s $7.5 million salary would’ve made the most sense within the CBA framework, but he has been viewed as a negative-value contract around the league for years at this point; asking a team to give up draft picks, an attractive player, and to take on Nnaji’s contract was always going to be an obstacle.”

“The conversations with Los Angeles and Milwaukee were also in awkward positions from the beginning because of league investigations into cap circumvention involving both teams. The uncertainty of their situations made it difficult for talks to advance past the conceptual stage,” Durando added.

“Then along came the Cavs. They were the last team to get involved, a surprise late entry to the Watson sweepstakes. In the end, they were also the only team to offer Denver an unprotected first-round pick — a coveted asset with high-lottery potential, if Cleveland’s championship window is closed five years from now.”

“No teams had offered an unprotected first-rounder for the older Johnson when he was available earlier in the summer, league sources said. Watson’s camp grew increasingly frustrated by how Denver was navigating the summer, especially the team’s perspective on his injury,” he further wrote.

“By the time Cleveland made the $88 million offer, the sense was that Watson’s side would’ve been unlikely to agree to that same offer if it had hypothetically come from the Nuggets, sources connected to both sides told The Post. A change of scenery was preferred at that point.”

“There was also a question of on-court role that Denver would’ve needed to address if it had increased its offer, two league sources said. Was Watson going to be a starter next season, or did the Nuggets still see him as a bench player behind the same five as last year?” Durando concluded.

With so many questions revolving around Watson’s future, it had become more a question of when than if in terms of the 23-year-old’s exit from Denver.

With the addition of DeMar DeRozan, the Nuggets have completed the 14-man minimum requirement for their roster. But the Nuggets are still $3.1 million over the second apron threshold.

This means they are still expected to pay $75 million in luxury tax unless they find a way to shed more salary, among other undesirable outcomes like further restrictions on their team in what they consider a championship window.

Therefore, it will be interesting to see how the Nuggets navigate the second-apron woes from here.