Sources: Indiana Pacers and Aaron Nesmith agree to terms on a contract extension

Nesmith is now tied to the Pacers for the next four seasons

Aaron Nesmith has agreed to a multi-year rookie-scale contract extension with the Indiana Pacers, multiple sources have confirmed to AllPacers. The deadline for an extension was Monday afternoon.

Adrian Wojnarowski of ESPN was the first to report the agreement. Per Wojnarowski, it's a three-year, $33 million extension. A league source told AllPacers there are no options in the deal.

That brings Nesmith's total contract to four years in length — he is already under contract for the 2023-24 season, and his new extension will kick in beginning in 2024-25. If he doesn't get another extension during his current deal, he would be a free agent again in the 2027 offseason.

"Let that be what it be. Just looking forward to playing basketball," Nesmith said when asked on media day if he had any extension discussions with the Pacers. Now, he can look forward to playing with more financial security. In total, he now is under contract for the next four seasons at about $38.6 million.

For the Pacers, this deal both signals their belief in Nesmith and continues down a path that blends the long and short term. Nesmith is still just 24-years old, so locking him up for nearly a half decade is a smart long-term move. He averaged 10.1 points per game last season while being a solid defender and knocking down 36.6% of his threes.

In this short term, it's an equally smart decision. Nesmith confirmed during the preseason that he is a needed member of Indiana's rotation. He showed off new skills and was an important defensive piece for the team. "Just being a better overall basketball player. My pace. Ball handling. Being able to make better reads. Driving into the paint. Finishing," Nesmith said earlier in training camp when asked what he worked on in the summer.

During the preseason, he averaged 10.5 points per game and canned 53.8% of his shot attempts. His best game was an 18-point outing against the Houston Rockets, and Nesmith reached 18 points while only hitting one three-point shot. It was his rim attacks that got him on the scoreboard. He has never scored 18 points in a regular season game when hitting fewer than two outside shots, so the added burst is notable.

He also got to the foul line six times in an exhibition game in Memphis, something he only did seven times last season. Nesmith showed important growth during the preseason, and for a Pacers team that just paid the young wing for both present and future production, seeing improvement was important.

The Pacers now have eight players with guaranteed contracts for the 2024-25 campaign. They could be a cap space team next summer, but their approach to team building over the next year will likely depend on their record this season. Regardless of what direction the team goes in the next 12 months, having Nesmith under contract for the next four seasons is good business by the team. It's a win-win move that made sense for both sides.

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