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Gallinari agrees to four-year, $42 million extension with Nuggets

Denver Nuggets small forward Danilo Gallinari has agreed to a four-year, $42 million extension that will keep him with the Nuggets through 2016, two sources told SI.com.

"I'm very happy that I'm going to be with the Nuggets for another four years," Gallinari said at the team's morning shootaround in Sacramento on Wednesday. "I've been having a great last three months after the trade, a great first half of the season now, so I'm very happy."

The fourth-year player has been a fantastic fit for Denver since being traded there as part of the Carmelo Anthony deal with New York last year. Retaining Gallinari was the latest good move by second-year general manager Masai Ujiri as he continues an accelerated rebuilding process in Denver.

Since the lockout ended in late November, Ujiri has re-signed center Nene and shooting guard Arron Afflalo to five-year deals and swapped a second-round pick with the Mavericks for key reserves Rudy Fernandez and Corey Brewer.

Gallinari, who was a favorite of Knicks coach Mike D'Antoni during his two-plus seasons there, is posting career highs in scoring (17.4 points per game), field-goal percentage (46.2), assists (2.8) and steals (1.7) while playing slightly fewer minutes than he did last season. The Nuggets are one of the surprise teams in the NBA at 12-5, having downed New York in overtime on Saturday in a game in which Gallinari's career-high 37 points said everything about the player he has become. As coach George Karl sees it, he's only going to get better.

"It's going to be [a case of], 'How good is he going to be?'" Karl said. "He has shown a great deal of improvement this year in the short time that we've had him, and I'm glad to get the opportunity to work with him for the next ... four years.

"Last year, we got him and everybody said he's a shooter. We think he's more of a basketball player than a shooter. We think he's a playmaker. He can play many positions. He learned the game as a point guard, so his playmaking is at a high level."

While the Nuggets are lacking star power, Gallinari and the balanced group around him has been on a tear since the Anthony deal. They were 18-7 after the trade was completed last season, then fell to Oklahoma City in five games in the first round of the Western Conference playoffs. Going forward, Karl said the Nuggets' system will be even more geared around Gallinari than before.

"We want to learn to use him a little bit how we used Melo from the standpoint of moving him around - using him in pick and rolls and then using him with the ball in his hands," Karl said. "He's very into it."

Gallinari admitted some surprise that life in Denver has gone so swimmingly.

"I've probably been a little [surprised], because after the trade you never know how it's going to be with a new team," Gallinari said. "But things have gone very well since last year, so it wasn't tough to say yes to this new contract."

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