Late Monday night, Jaden McDaniels and the Minnesota Timberwolves agreed to a one-year, $40 million contract extension. McDaniels was already under contract through the 2028-29 season, and this deal adds one more year on top of the three years and $84 million McDaniels had remaining.
While the extension only added a single year, the move is still incredibly intriguing from both sides. Since hiring Tim Connelly as the team's President of Basketball Operations, the Wolves have been one of the best teams at navigating their salary cap around the NBA's second apron, and this deal with McDaniels is another example of that.
How the extension impacts the Timberwolves
McDaniels has had a sensational preseason for the Timberwolves this fall. He has ramped up his offensive production in the Wolves' new starting lineup while continuing to provide All-NBA-caliber defense.
From the Wolves' perspective, this extension is an expression of support in McDaniels as a player. They believe he will continue to get better, possibly to an All-Star level, and is a core part of what Connelly and the rest of the organization are building.
Given that context, the Timberwolves adding any extra years to McDaniels' contract has to be viewed as a win for the organization. McDaniels seems primed for the best season of his career, and Minnesota gets to lock in their core player for another season before that projected level-up.
The $40 million contract amount is also incredibly reasonable. That number for the 2029-30 season will represent around 20-21 percent of that year's salary cap, depending on how much league revenue grows in that time. For comparison, the same percentage of this season's salary cap is roughly $34 million.
The deal becomes even more advantageous for the Wolves when you consider that McDaniels will be three years older than he is now. McDaniels will be 29 for the 2029-30 season, smack dab in the middle of his prime. Minnesota securing any of McDaniels' peak seasons for any contract number resembling a sensible number is a home run for the organization.
The added perk is that the end of McDaniels' contract is now staggered a season away from when the current deals for Anthony Edwards and LaMelo expire in the summer of 2029. Edwards, who also has sizable expectations this season, will be eligible to sign a 35 percent of the salary cap supermax next summer if he makes All-NBA this season, with Ball also becoming extension-eligible.
If and when the Wolves look to do another extension with McDaniels as soon as two years from now, they will have a better sense of how much room they have under the second apron or the luxury tax to fit McDaniels' potential long-term extension.
How the extension impacts Jaden McDaniels
Locking McDaniels in for another year at that contract amount makes perfect sense for the Timberwolves. The natural next question is: why did the Wolves extend McDaniels for only one more season?
Minnesota likely would have been willing to give McDaniels a second or third year at that amount (plus the allowed eight percent yearly raise), but a deal has to make sense for both sides, and there is value for McDaniels in just adding the season year.
This week's contract extension gives McDaniels an extra $40 million of guaranteed money that he did not have before, but it also allows him to maintain maximum flexibility for either another extension down the road or if he hits free agency in 2030.
Two years from now, McDaniels will become extension-eligible again. The NBA allows teams to extend players at 140 percent of the final year of the contract, meaning McDaniels could sign an extension that begins at $56 million for the 2030-31 season and goes up eight percent each season.
As a reminder, $56 million looks a lot when converted into today's market. In 2030-31, $56 million will represent about 27.5 percent of the salary cap. For reference, 26 percent of today's salary cap number is roughly $45.5 million
If McDaniels does reach free agency in 2031, he will have earned a total of ten years of NBA service time, making him eligible for the 35 percent of the cap supermax, the same one Edwards is potentially going to get a year from now.
While it is unlikely that McDaniels will be worth that large of a share of any team's salary cap (few players in the entire NBA are), it shows the extra leverage McDaniels gains by adding an extra year to his current contract.
Verdict
The extension between McDaniels and the Timberwolves on Monday is a positive outcome for both sides. The Wolves lock in one of their core players for another year in the future, and McDaniels receives $40 million he didn't have before and is in a perfect situation for either another contract extension in 2028 or to hit free agency in 2030.
The NBA salary cap and all of the contracts can be confusing for the average NBA viewer and even for many who cover the league. What is obvious is that Tim Connelly understands what he is doing. Every move appears to be thought out ahead of time, as very few knee-jerk reactions are made by the Wolves' current front office.
Now, with all of the contract talk out of the way, the real fun can begin. For the Timberwolves, it all starts Wednesday against Giannis Antetokounmpo and the Miami Heat.
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