DeMar DeRozan, Nuggets Reportedly Agree to Contract After Peyton Watson Trade, Updated Salary Cap

After two years with the Sacramento Kings, DeMar DeRozan has found a new home.

The veteran will reportedly sign a new contract with the Denver Nuggets, per Chris Haynes of NBA on Prime. The one-year deal will be worth $3.9 million per Shams Charania of ESPN.

This move continues a tight salary cap crunch for the Nuggets.

They were already $1.3 million over the second apron before the deal, per Bobby Marks of ESPN.

The Kings waived DeRozan and the remainder of his expiring contract on July 6. DeRozan would have counted for $25.7 million against the cap had he stayed in Sacramento.

As soon as DeRozan hit free agency, it was clear a number of contenders were going to try to get him on their roster. After the Nuggets traded Peyton Watson to the Cleveland Cavaliers, their focus reportedly shifted to DeRozan.

While DeRozan is 36 years old, he's remained consistent as he's gotten older. Last year, he put up 18.4 points, 4.1 assists and 2.9 rebounds per game while starting 77 contests. He's also avoided injury throughout his career and has played 70 or more games in each of the last five seasons.

He might not have the same athleticism and explosiveness that he had in his youth, but he should be able to serve as a valuable option alongside Nikola Jokić and Jamal Murray.

The signing also gives DeRozan the chance to play for a contender rather than the Kings, who are likely on their way to another rough season. Whether the 2026-27 campaign will see DeRozan win his first title remains to be seen.

The Nuggets didn't have a huge budget to work with this offseason, but picking up DeRozan is a valuable signing that could be the difference for them this postseason.