The Denver Nuggets would face a staggering $177 million luxury tax penalty if they waive Jonas Valanciunas and sign Peyton Watson to a $25M/year extension.
The Denver Nuggets could be facing a potentially record-breaking luxury tax bill, depending on how they handle their remaining offseason decisions.
Position
C
Age
34
Height
211 cm
Weight
120 kg
Birth place
Utena, Lithuania
According to ESPN NBA front office insider Bobby Marks, the Nuggets would face a staggering $177 million luxury tax penalty if they waive Jonas Valanciunas and sign Peyton Watson to a $25 million-per-year extension.
That figure does not include the money Denver would owe in salaries, which would climb above $225 million. It represents only the luxury tax bill on top of that.
For perspective, the largest luxury tax bill ever paid by an NBA team was $176.9 million by the Golden State Warriors in the 2023-24 season, when they were still trying to extend their Stephen Curry-Klay Thompson-Draymond Green dynasty core.
Nuggets expected to match Peyton Watson offers
The Nuggets remain open to either keeping or parting ways with their talented young forward this offseason.
According to Sam Amick of The Athletic, Denver plans to match any offers Watson may receive as a restricted free agent, but the franchise is also willing to explore sign-and-trade possibilities.
“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,” Amick wrote.
“Yet as the Nuggets and Watson’s agent, Rich Paul of the Klutch Sports Group, have continued to be apart in negotiations for a new contract, sources say Denver is also very open to the prospect of a sign-and-trade for the 23-year-old forward.”
Credit AP – Scanpix
Per Amick, the Brooklyn Nets and Los Angeles Clippers are the only teams financially capable of making such a sign-and-trade deal involving Watson.
In the Clippers’ case, while they have shown “legitimate interest” in Watson, the team is facing a dilemma related to Bennedict Mathurin’s separate restricted free-agency situation.
Watson is considered one of the top players still available on the NBA free agency market.
The 23-year-old enjoyed a breakout 2025-26 season, averaging career highs across the board, though a hamstring strain cut his promising campaign short.
Watson appeared in 54 games, including 40 starts, and averaged 14.6 points, 4.9 rebounds, 2.1 assists, and 1.1 blocks in 29.6 minutes per game. He also took a major step forward in efficiency, shooting 49.1% from the field and a career-best 41.1% from three-point range.
Nuggets expected to waive Valanciunas
According to Logan Struck of Sports Illustrated, the Colorado club is leaning towards waiving Valanciunas, which would save them $8 million and allow the center to hit free agency.
Valanciunas has partially guaranteed contract with the Nuggets for next season.
If the veteran center is waived by July 8, Denver is responsible for $2 million of his $10 million salary. The Nuggets could also stretch the protected salary over three seasons.
Growing NBA interest in Jonas Valanciunas
In the wake of his looming contract deadline with the Nuggets and his pending move to Zalgiris Kaunas should he get cut by Denver, Jonas Valanciunas is reportedly drawing significant consideration now around the NBA.
Credit AP – Scanpix
This interest is deeply rooted among teams looking to add size and frontcourt presence, as reported by Marc Stein and Jake Fischer.
“NBA interest in the 34-year-old only seems to be growing given the increasing need for proven size that so many teams feel,” both insiders wrote.
Valanciunas has proven himself to be a productive big man in the NBA this past season. Across 65 appearances as Nikola Jokic’s backup, he averaged 8.7 points, 5.1 rebounds, and 1.2 assists while maintaining a highly efficient 58.2% field goal percentage for Denver.
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