On Friday, NBA insider Jake Fischer reported that the Denver Nuggets are "unlikely to come to terms on a rookie-scale extension with Peyton Watson." Fischer cited the Nuggets' "tricky luxury tax situation" as a reason why (subscription required). Christian Braun is also eligible to sign an extension, and he's the team's priority.
At Denver's media day, Jon Tenzer expressed his hope that Braun and Watson are around for a long time, so the news from Fischer doesn't mean that the Nuggets are willing to let Watson go next summer. He'll become a restricted free agent, so Denver can match any offer sheet.