INDIANAPOLIS — The Indiana Pacers pulled off one of their most significant moves of the offseason last week as they extended guard Andrew Nembhard’s contract.

The new, longer deal for the 24-year old was announced last Friday, and reports have detailed that it’s a three-year, $58.6 million extension. For a player that hasn’t made more than $2.4 million in a given season, it’s a major contract.

It’s also a huge win for the Indiana Pacers. Nembhard is a terrific player and still young at 24. He only has been in the league for two years, so he has room to grow despite being experienced already — he helped the blue and gold reach the Eastern Conference Finals last year.

Starting guards are not cheap in the NBA, and neither are young players. Malik Monk and Kentavious Caldwell-Pope both signed multi-year deals with an average annual value of $19.5 million or more this offseason, and they play Nembhard’s position. Patrick Williams, a young yet unproven player, inked a deal worth $18 million per year.

Nembhard, after his extension, is now under contract for four years and $60.7 million in total. That’s just over $15 million per season for a proven, young two-way guard.

“During the course of Andrew’s career, he has proven that there is no moment too big for him and he continually rises to every challenge presented to him and our team,” Pacers President of Basketball Operations said in a statement.

Nembhard’s deal, at least by the high-level numbers, is slightly misleading. In order to get the extension in motion, Indiana declined a team option that previously existed in Nembhard’s contract. Said option covered the 2025-26 season, and it was for just $2.2 million. By declining that option and then extending Nembhard’s contract, he gets a roughly $16 million pay bump next season.

That’s why the length of the deal made sense. If Nembhard was only willing to add two years to his contract, that may not have been worth it for Indiana. They already had that team option in their favor. A four-year extension would have required declining that team option, and that may have been too long of a commitment for Nembhard. Three years was the perfect middle ground.

That resolution means four more seasons under contract in total, which will keep Nembhard in Indy through 2028 barring a trade. He’s been a great piece for the franchise since being drafted 31st overall in 2022. By the final season of the contract, the Gonzaga product will make just a few million more then the Non-Taxpayer Mid-Level Exception.

That’s an inexpensive deal for a starter, and there were reasons to keep Nembhard beyond a great contract. He’s an impactful player — the Pacers were more than four points per 100 possessions better on defense with Nembhard on the floor. On offense, they stumbled from best-ever levels to merely elite when Nembhard was playing.

In the postseason, the former second-round pick averaged 14.9 points and 5.5 assists per game. When star guard Tyrese Haliburton was injured for the final two playoff outings, he torched the Boston Celtics.

If the Canadian guard built off the postseason success and had a great third season, he may have gotten a huge contract as a restricted free agent next summer. San Antonio, Brooklyn, and Washington all need a point guard and project to have cap space in 2025.

Instead, Nembhard is staying with Indiana. “His hard work and focus on developing all aspects of his game have made him an instrumental part of our success — and he has only started to scratch the surface of his potential — so we are excited to have him with us for years to come,” Pritchard said.

Nembhard averaged 9.2 points and 4.1 assists per game last season. He’s going to improve while playing for Team Canada in the Olympics this offseason. “How to draw fouls. And rebounding,” Nembhard said of what he’s working on this summer.

After the Olympic games, he’ll return to the Pacers. Once he’s back, he can grow over the life of his new contract and become the player this deal says he can be. He might already be that player, and that’s why the Pacers have to be beaming that Nembhard signed this extension.