Nuggets Trade Peyton Watson to Cavs, Sign DeMar DeRozan to One-Year Deal

After winning 54 games in 2025-26, the Denver Nuggets traded Peyton Watson to the Cavaliers and signed veteran DeMar DeRozan.

The Denver Nuggets concluded a pivotal week of transactions by trading forward Peyton Watson to the Cleveland Cavaliers on Wednesday and signing veteran guard DeMar DeRozan to a one-year contract on Friday. These moves follow a 2025-26 campaign where Denver secured the No. 3 seed in the Western Conference with 54 victories before suffering a first-round playoff exit against the Minnesota Timberwolves. The franchise now enters the 2026-27 season ranked No. 18 in post-free agency Power Rankings and No. 7 in the Basketball Power Index, with an opening regular-season win total set at 49.5.

DeRozan joins the roster as a career 21.1 points per game scorer, though his arrival impacts Denver's perimeter spacing. During the 2025-26 season with the Sacramento Kings, DeRozan recorded a plus-0.3 Net Point rating while shooting significantly less from deep than his predecessor. Watson, the 30th overall pick who developed into a two-way wing, shot 41.1% from 3-point range last season on nearly double the volume of DeRozan’s attempts. The trade to Cleveland allowed the Cavaliers to dip below the salary cap's second apron, leaving Denver as the only team in the NBA currently positioned above that financial threshold.

Roster Changes and Rationale

Denver’s offseason focused on resolving Watson's restricted free agency, a saga that ended with the Nuggets receiving an unprotected first-round draft pick from Cleveland. This compensation provides the front office with its only tradeable first-round asset. The departure of Watson follows a period where the team struggled to find success with draft picks in the 25-40 range, including Jalen Pickett, Julian Strawther, Hunter Tyson, and Bones Hyland. Alongside Watson, the Nuggets lost Tim Hardaway Jr. and Jonas Valanciunas this summer. To fill these gaps, the team added Marvin Bagley III and Lonnie Walker IV, while retaining Spencer Jones and Tyus Jones.

Internal development remains centered on Cameron Johnson, who finished last season 8th among qualified players in 3-point percentage and 24th in true shooting percentage. Despite these efficiency marks, Johnson recorded a career-low 15% usage rate and attempted only 4.7 3-pointers per game. The Nuggets led the league in offensive rating last year even with Johnson’s limited volume. Meanwhile, Michael Porter Jr. has moved to the Brooklyn Nets, where he maintained his efficiency and increased his possession usage despite no longer playing alongside three-time MVP Nikola Jokic.

The Jokic Extension and Western Conference Landscape

Nikola Jokic enters the season with one year of team control remaining on his current contract, having not yet signed a four-year, $278 million extension. The superstar center has indicated his desire to remain in Denver for his entire career, suggesting the delay is a financial strategy to maximize earnings next summer. His presence continues to elevate teammates; since the 2022-23 championship season, players including Christian Braun, Jamal Murray, Bruce Brown, and Aaron Gordon have all produced higher offensive ratings when sharing the floor with the Serbian center.

Denver’s path through the Western Conference involves facing reshaped contenders. The Oklahoma City Thunder moved Luguentz Dort, Isaiah Joe, and Aaron Wiggins. The Minnesota Timberwolves acquired LaMelo Ball by trading Julius Randle and Naz Reid. Additionally, the Los Angeles Lakers lost LeBron James, Rui Hachimura, and Deandre Ayton. Denver has opted for continuity with its core trade chips, Jamal Murray and Aaron Gordon, rather than pursuing a major acquisition.

Statistical Outlook for 2026-27

Expert analysis from Zach Kram gave the Watson sign-and-trade a 'D' grade, citing the loss of a developed wing defender. However, betting insights from Eric Moody suggest taking the over on 49.5 wins (-110), noting that Denver has achieved at least 50 wins in four consecutive seasons. The Nuggets' offensive success will depend on whether Johnson can increase his involvement and how the team integrates DeRozan’s scoring punch into a system that previously relied on Watson’s floor spacing. The front office remains focused on navigating the luxury tax while maintaining a roster that won 54 games just one year ago.