Nuggets Sign Lonnie Walker IV, Spark Watson Trade Talk

The Denver Nuggets signed veteran guard Lonnie Walker IV to a one-year, $3.3 million contract on August 6, a move that has intensified speculation about the future of the team's key restricted free agent, forward Peyton Watson.

Walker, 27, returns to the NBA after spending the 2025-26 season with Maccabi Tel Aviv in Israel. A former first-round pick, he has played seven NBA seasons with the San Antonio Spurs, Los Angeles Lakers, Brooklyn Nets, and Philadelphia 76ers. The signing, reported by agent George S. Langberg, is for the veteran's minimum and is intended to add backcourt depth following the departure of Tim Hardaway Jr. to the Miami Heat.

The acquisition, however, has shifted focus to the Nuggets' precarious financial situation and Watson's unresolved status. Denver is currently projected to exceed the NBA's restrictive second luxury tax apron. The Walker signing alone increased the team's projected luxury tax bill from approximately $68 million to over $80 million, according to league analysis. Retaining Watson on his $6.5 million qualifying offer would push that tax bill past $120 million.

This financial pressure appears to be driving the Nuggets toward a sign-and-trade...