There’s a number that explains exactly how the Denver Nuggets value marginal shooting right now, and it isn’t Spencer Jones’ 69.2 percent clip from three in the playoffs. It’s $32 million, the gap between the roughly $36 million tax bill Denver was already carrying and the roughly $68 million one it just signed up for by matching a two-year, roughly $12 million offer sheet from the Oklahoma City Thunder. The Denver Nuggets are now the only team in the NBA’s second apron, and they got there defending an undrafted free agent almost nobody outside Denver had strong opinions about a year ago.
That decision is the whole story here. Oklahoma City extended Jones a fully guaranteed offer sheet, reported by ESPN at roughly $12 million over two seasons, and Denver matched with about an hour to spare before today’s deadline. It tells you almost exactly what happens when Peyton Watson’s much bigger free agency decision lands.
What Did Denver Actually Give Up to Keep Spencer Jones?
Denver matched a fully guaranteed two-year, roughly $12 million offer sheet from Oklahoma City with about an hour left before today’s deadline, retaining Jones as a restricted free agent. The match alone didn’t create the tax problem, since Denver was already operating near the second apron, but it converted a soft, avoidable number into a locked-in one.
That’s the part that gets lost in offer-sheet coverage. Denver could have let Jones walk to Oklahoma City and paid nothing beyond a bruised feeling about losing a useful role player. Instead, the front office chose the full financial consequence. Per NBC Sports, that consequence is a projected luxury tax bill jumping from around $36 million to around $68 million. ESPN’s Bobby Marks has Denver sitting roughly $8 million above the second apron line now, the only team in the league positioned there.
Why Is an Undrafted Role Player Worth $32 Million in Tax?
Jones shot 69.2 percent from three in the 2026 playoffs, the best mark in the league in a small sample, which is a real signal but not the reason Denver paid. The reason is what that shooting represented in a specific stretch: a hittable, low-usage floor spacer who didn’t need touches to matter when Denver’s rotation got thin.
Strip the small sample away and the 2025-26 regular-season version of Jones looks a lot more ordinary. He averaged 5.5 points and 3.3 rebounds across 64 games (37 starts) on 50.4 percent shooting overall and 39.6 percent from three, solid efficiency for a low-usage role player, not a star line by any measure. That gap between the season-long profile and the 69.2 percent playoff number is exactly the kind of split that should make you skeptical of small samples. Denver isn’t paying $32 million in extra tax because Jones is secretly a star. It’s paying because it saw the ceiling that number represents and decided the downside, an undrafted wing on a two-year deal, was cheap relative to the upside.
The moment that sold it happened in Game 5 of the first-round series against Minnesota, a 125-113 Nuggets win. Starting in place of the injured Aaron Gordon, Jones scored 20 points on 7-for-9 shooting, punctuated by a 3-for-3 third quarter that broke the game open, while adding three steals and three blocks as Denver’s de facto defensive stopper. That’s a two-way role player filling a real hole in a playoff rotation, not a specialist getting hot in garbage time. Undrafted free agents, signed off the open market out of Stanford back in 2024, don’t usually get $12 million guaranteed off one performance. They get it off a body of evidence, and Denver had enough of it.
What Does the Second Apron Actually Restrict?
The second apron caps out at $221.686 million for 2026-27, set $17.5 million above the luxury tax line, and it isn’t just an expensive place to be. It’s a place where roster-building tools disappear. Teams above it can’t aggregate salaries in trades, can’t use the taxpayer mid-level exception, and can’t attach cash to outgoing deals.
The no-aggregation rule is the one that actually hurts. A team above the second apron has to match salaries one-for-one in trades instead of combining two smaller contracts to absorb a bigger one, which is how most mid-tier trades get built in the first place. Denver also has its own first-round pick seven years out frozen, a penalty that can slide the pick to the end of the round if the team stays in the second apron across consecutive seasons. Salary-cap analyst Yossi Gozlan broke down what that means for Denver specifically, right down to how it complicates re-signing Bird-rights players like Watson:
https://x.com/YossiGozlan/status/2081576527234507158
None of those restrictions kill a front office outright. They just remove the tools most teams use to fix mistakes quietly, mid-season, through trades. Denver signed up for a version of team-building where the roster mostly has to work as constructed, because the exits are narrower now.
What Happens When Peyton Watson’s Decision Lands?
Watson is a restricted free agent holding a $6.5 million qualifying offer, and he’s reportedly seeking a new deal in the range of $25 million a year. If Denver signs him instead of routing him elsewhere, the same reporting behind the Jones situation puts Denver’s projected tax bill at $112 million or higher.
That’s not a hypothetical stacked on a hypothetical. It’s the same math Denver just ran on Jones, applied to a player who’s a full rotation piece rather than a specialist off the bench. Denver has reportedly stayed open to a sign-and-trade path for Watson as an alternative to eating the full number, which tells you the front office knows $112 million is a real outcome it might not want, not a bluff it’s willing to call on itself. The Jones decision alone pushed the tax bill up $32 million. Actually paying Watson market rate on top of that would add roughly $44 million more.
Denver already showed its hand on the cheaper decision. Whichever way ownership leans on Watson, the evidence says it won’t be a surprise. Denver just spent $68 million proving it.
