Pacers Agree to $40.4 Million Surprise Extension Ahead of Season

May 13, 2025; Cleveland, Ohio, USA; Indiana Pacers forward Aaron Nesmith (23) and guard Tyrese Haliburton (0) and forward Pascal Siakam (43) celebrate during the second half of game five against the Cleveland Cavaliers in the second round for the 2025 NBA Playoffs at Rocket Arena. Mandatory Credit: Ken Blaze-Imagn Images | Ken Blaze-Imagn Images

The Indiana Pacers have signed a key veteran wing to a lucrative two-year, $40.4 million contract extension in a bit of a surprise move.

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Per Shams Charania of ESPN, Indiana has signed Nesmith to the maximum possible extension of his current deal, which will keep him with the Pacers through 2028-29. The deal also includes a trade kicker. Nesmith's agent, Mike Lindeman of Excel Sports Management, broke the news to Charania.

The Pacers lock in one of their best defenders after a playoff run in which Nesmith started all 23 games on the run to the Finals -- and shot 49.2% on 3-pointers, the best by any player in a single postseason with at least 100 3s attempted in NBA history, per ESPN Research. https://t.co/9AOSXSXaX8

— Shams Charania (@ShamsCharania) October 21, 2025

A veteran contract extension for Nesmith — who had been on the last year of his current three-year, $33 million deal — and a rookie salary extension for newly promoted starting shooting guard Bennedict Mathurin had both been possibilities this offseason.

Following some chaotic early NBA seasons with the Boston Celtics, Nesmith has firmly established himself as a key two-way contributor for Indiana.

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Charania observes that Nesmith connected on a league-record 49.2 percent on his 3-point takes during the Pacers' playoff run this spring and summer. That represents the best such conversion rate in one postseason for anyone who has launched at least 100 triple tries per.

The window for Mathurin to be extended expired on Monday at 5 p.m. ET, without a deal. Now, he'll be a restricted free agent next summer.

Nesmith and Andrew Nembhard eventually earned head coach Rick Carlisle's trust as his preferred starting 3-and-D wings last season, accenting established starters Tyrese Haliburton, Pascal Siakam and Myles Turner.

This fivesome pushed the Pacers' offense to new pace-and-space heights and speeds, en route to the franchise's first NBA Finals appearance in 25 years this past summer.

Nesmith Has Earned His New Paycheck

Last regular season, the 6-foot-6 Vanderbilt product averaged 12.0 points on .507/.431/.913 shooting splits, 4.0 rebounds, 1.2 assists, and 0.8 steals in 45 healthy games (37 starts). In the playoffs, he increased that output to 12.7 points on a .472/.492/.861 slash line, 5.7 boards, 1.1 dimes, 0.9 steals and 0.8 blocks a night.

This year, Indiana's first five is set to look pretty different. Haliburton will miss the entire season recovering from an Achilles tendon rupture and Turner abandoned the Pacers for a $108.9 million, four-year deal with the Milwaukee Bucks. Nembhard is now Indiana's fill-in starting point guard, while Mathurin has replaced Nembhard as the Pacers' new starting shooting guard. Isaiah Jackson and Jay Huff appear to be competing to replace Turner.

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