Indiana Pacers And Aaron Nesmith Agree To Two-Year Contract Extension

INDIANAPOLIS – Indiana Pacers wing Aaron Nesmith has agreed to a two-year, $40.5 million extension that will put Nesmith on a contract which now totals four years in length.

Nesmith, who turned 26 last Friday, is about to enter the second season of a three-year, $33 million dollar contract he signed in 2023. That deal was a safe bet to make by the Pacers, and the emerging wing has drastically outperformed that agreement in recent seasons. He is a terrific three-and-D player who averaged 12 points per game last season while shooting over 43% from long range.

Those numbers carried into the postseason as Indiana reached the NBA Finals and was one game away from a title. Now, with just a few hours until the deadline to reach an agreement, Nesmith has agreed to an extension. He was eligible to add as many as three seasons on to his contract but opted for two years at the maximum value he was permitted to get based on the NBA’s average annual salary.

“Yeah, we’ll look at all those kinds of things… They both had good years,” Pacers President of Basketball Operations Kevin Pritchard said when asked about possible contract extensions for Nesmith and Bennedict Mathurin earlier in the offseason. “Those guys, in my opinion, still have levels to move up. And that’s what I like about this team… Our players developed this incredible culture. And I will not bring an over-talented guy that doesn’t feel like he fits the culture. We’d rather have guys like that that can grow into our culture. And so that’s our job now.”

What the Pacers extension of Aaron Nesmith means for the team

The added years bring Nesmith’s contract to four years and about $62 million in total value. It runs through the 2028-29 season – the same year that Pacers star Tyrese Haliburton’s contract expires.

Now, the Vanderbilt product can become a free agent with nine years of service at age 29. That could be a good time for Nesmith to get back on the market, though he will be eligible for another contract extension in October of 2027.

“He’s a strong, athletic wing that shoots the ball and moves and runs and can defend. He rebounds pretty well at his position,” Pacers head coach Rick Carlisle said of Nesmith last season. Later in the night after Carlisle said this, the young wing returned from injury and instantly reminded everyone why he is valuable to Indiana’s roster.

He has continuously improved with the blue and gold, growing from a bench player to a key starter for one of the NBA’s best teams. Last season, he would have qualified for the 50/40/90 efficiency club had he played in enough games to be eligible for league leaderboards.

In total with the Pacers, Nesmith has averaged 11.7 points per game across the last three seasons while 40.2% from deep. He came to the team in a trade from the Boston Celtics in the summer of 2022.

From a salary cap perspective, it’s hard to pinpoint exactly what this extension for Nesmith does to the Pacers. Since it doesn’t kick in for two years, an incalculable number of things could happen from a transaction perspective between now and then. As of now, the Pacers have committed about $169 million in salaries for the 2027-28 season and could be under the salary cap in the summer of 2027, but there are two NBA Drafts and numerous extension eligible players who will be heard from between now and then.

But this extension does give the Pacers clarity, which makes planning other moves far easier. Myles Turner has departed the franchise, but the team’s other four starters from their NBA Finals run are all under contract for the next three seasons.

“He’s Aaron Nesmith. He’s going to defend at a high level, make open shots, play the right way… he can fit anywhere,” Haliburton said of Nesmith last season.

Mathurin was also extension eligible with a Monday deadline, but both he and the Pacers had good reason to wait when it comes to his contractual future and no agreement was reached. Now that Nesmith is locked up for a few years, the only remaining item on Indiana’s offseason checklist is what to do with rookie-scale team options for Jarace Walker and Ben Sheppard.

The Pacers and Nesmith begin the regular season on Thursday when they host the Oklahoma City Thunder in a Finals rematch.