The Denver Nuggets are trading restricted free-agent forward Peyton Watson to the Cleveland Cavaliers in a multi-team deal, multiple sources told The Athletic on Wednesday. The sources spoke under condition of anonymity because the deal is not yet official.
A league source, speaking under condition of anonymity to discuss a deal that had not yet been signed, said Watson had agreed to a four-year, $88 million contract with the Cavaliers. He will also receive a player option and a trade kicker.
Other parts of the deal, first reported by ESPN, that have been confirmed so far:
- The Cavaliers send forward Max Strus to the LA Clippers.
- The Nuggets acquire an unprotected 2031 first-round pick and a 2032 Kings second-rounder (via Cleveland), plus power forward Julian Reese from Washington. The Nuggets are expected to waive Reese.
- In addition to Watson, the Cavs also receive Cam Whitmore from Washington.
- Washington receives Tre Mann and a 2027 second-round pick from Cleveland (via the Clippers), plus cash.
- The Clippers are also sending out the draft rights to Ismael Kamagate in the deal, though it is unclear what team is acquiring those rights.
- Last week’s deal in which the Cavaliers acquired Mann from Charlotte in exchange for Dennis Schröder is being roped into this trade, making it a five-team deal.
The Cavaliers have finally made their first major offseason acquisition, landing Watson after coming up short in their efforts to lure LeBron James back to Cleveland. The sign-and-trade marks the end of a nearly two-month wait for Watson, a highly coveted restricted free agent who will turn 24 in September. The likelihood of Watson staying in Denver long-term was hampered by the franchise being close to the NBA’s punitive second apron.
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Watson improved steadily over his first three seasons with the Nuggets before breaking out in 2025-26, when he averaged career highs in points (14.6) and rebounds (4.9). Watson enjoyed an expanded role in Denver’s lineups due to injuries to power forward Aaron Gordon, center Nikola Jokić and shooting guard Christian Braun. All of Watson’s 40 starts came with at least one of those three players out of the rotation.
A Grade II right hamstring strain suffered in February slowed Watson’s emergence. He missed more than six weeks with the initial injury, then aggravated it 10 days after his return, costing him the remainder of the regular season and all of Denver’s first-round playoff series loss to the Minnesota Timberwolves.
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Denver retains its starting lineup of Jokić, Gordon, Braun, Cameron Johnson and All-Star Jamal Murray for next season. But Watson’s departure is a significant blow to the Nuggets’ depth. They lose a player they developed after extending Braun last year and matching the Oklahoma City Thunder’s offer sheet to backup forward Spencer Jones this offseason. As of now, Denver’s top reserves are Jones, 2023 first-round pick Julian Strawther, 2024 first-rounder DaRon Holmes II, veteran forward Marvin Bagley III and point guard Tyus Jones.
The Watson acquisition will allow Cleveland to re-sign James Harden, who was acquired ahead of the February 2026 trade deadline in exchange for point guard Darius Garland. Watson joins a Cavs core that includes Harden, All-NBA guard Donovan Mitchell, power forward Evan Mobley and center Jarrett Allen. Watson gives the Eastern Conference finalists an upgrade at wing who doesn’t need the ball to contribute and can defend top perimeter players — a role previously entrusted to the outgoing Strus and Dean Wade.
Strus, 30, is in the last year of a four-year contract and will rejoin a familiar face in Garland, whom he played alongside for nearly three seasons in Cleveland. Strus is a competitive defender who made 36.8 percent of his 3s during the regular season and 36.3 percent in the postseason over his three years in Cleveland. He ranked fourth among all Cavaliers in total 3s during that period.
Meanwhile, the Clippers are in a holding pattern with the proposed trade of Kawhi Leonard to the Toronto Raptors, pending the NBA making a ruling on its investigation into alleged salary-cap circumvention by LA. The Clippers would receive Brandon Ingram and Gradey Dick in that deal.
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Strus joins a crowded glut of potential shooting guards and small forwards that includes Kris Dunn, Derrick Jones Jr., Jordan Miller, Kobe Sanders and the recently re-signed Bradley Beal. Unlike Beal, Strus is healthy and expected to be an early contributor. The Clippers also have the rights to restricted free agent Bennedict Mathurin. Another move may be required to move LA down to 15 standard contracts by the first week of the regular season, especially if the trade with the Raptors is finally consummated.
The last pick in the first round of the 2022 draft out of UCLA, Watson has averaged 8.7 points per game across four seasons while shooting 47.9 percent from the field. He averaged career-highs in points (14.6), rebounds (4.9) and steals (0.9) while shooting 41.1 percent from 3-point range across 54 games (40 starts) last season.
The Nuggets won the NBA championship during Watson’s rookie season of 2022-23, though he made only five appearances in the 2023 playoffs.