The NBA trade deadline passed about a month ago, but that isn’t where the midseason team-building considerations end for NBA teams. Some players are eligible to receive contract extensions throughout the entirety of a season, and even this late in the campaign, teams still consider longer deals for players who deserve one.

Indiana Pacers forward Doug McDermott is currently eligible for a contract extension. He signed a three-year, $22 million deal in the summer of 2018, and according to the collective bargaining agreement, the Creighton product is permitted to sign an extension as of the two-year anniversary of inking that deal.

That means McDermott has been extension eligible since July 6, 2020. The sweet-shooting forward is currently in the midst of his best campaign — he’s scoring more points per game than he ever has in his career and is doing so on the highest field goal percentage he’s had since entering the NBA. The 6’7 wing has evolved into a two-level scorer and has been a key part of the Pacers’ sixteenth-ranked offense.

“He’s a constant threat to come flying out of the corner or coming off a dribble hand off or staggers,” Pacers Head Coach Nate Bjorkgren said of McDermott. “He’s constantly moving, he’s constantly relocating, which makes him really hard to guard.”

McDermott is playing well, and he’s perhaps the Pacers’ best movement shooter — a skill that is extremely important in today’s NBA. Teams are always trying to acquire shooting, so it isn’t hard to imagine why the Pacers would want to keep McDermott around.

Any extension for a non-rookie contract is limited in length to five total years, including any seasons still remaining in an ongoing deal. Since McDermott has one year remaining on his current contract, an extension for him is limited to four seasons in length.

In terms of money, the first season of a veteran extension is limited to the larger value of a 120% raise over a player’s previous salary or 120% more than the league average salary. McDermott currently makes $7.33 million, so a 20% bump on that number would be just shy of $8.8 million. However, the NBA estimated the league average salary at $10 million for this season, and a 120% raise on that number is $12 million. Since $12 million is greater than $8.8 million, that’s the largest number the first-year salary in a McDermott extension could be.

His new deal could have raises anywhere from 0-8% from year one to two, and that raise amount would be the same in ensuing seasons. Put it all together, and the maximum extension Doug McDermott could receive from the Pacers looks like this.

2021-22: $12,000,000

2022-23: $12,960,000

2023-24: $13,920,000

2024-25: $14,880,000

In total, the maximum extension McDermott could receive from Indiana would be four years, $53,760,000. He could receive any amount of money up to that amount and any amount of years on an extension from one to four. As long as the extension falls within those parameters, it is legal.

Over $50 million for McDermott sounds high at a glance. But shooting in the NBA has become expensive. Perimeter sharpshooter Davis Bertans signed a deal worth $80 million over five seasons with Washington this past offseason. Joe Harris inked a deal worth $75 million over four seasons with the Brooklyn Nets. Elite three-point shooting comes at a high cost to teams these days, and McDermott is no exception — he has nailed 41% of his triples since joining the Pacers.

That said, McDermott is shooting just 37% from deep this year, and he is a weak defender. Committing to him at $13.5 million per season could be risky. But, as stated above, his extension could be for fewer seasons or for less total money. There could be a cheaper or shorter contract that makes more sense.

Beyond any shortcomings in McDermott’s skillset, there are other reasons for Indiana not to extend his deal. The Pacers already have over $113 million on the books in guaranteed money for next season, and $85 million in 2022-23. Committing more dollars to McDermott would make it more difficult for the Pacers to spend money on other players and improve the team in coming seasons.

Additionally, T.J. McConnell, T.J. Warren, and Edmond Sumner are due for pay increases in the next season or two, which makes giving McDermott an extension a shaky proposition. Any extension to McDermott that makes it impossible to retain any one of those players would not be worth it for Indiana, and a $53 million extension would certainly do that.

A less lucrative contract could make more sense for the blue and gold. But a smaller deal may not be interesting for McDermott, who likely understands that his elite shooting ability could land him a big contract in the offseason.

That’s what makes a potential extension for McDermott tricky. He has to agree to the deal — it has to be worth it for him. While the sweet-shooting forward likes Indiana, the money has to make sense for him to agree to a longer deal.

“I love it here. I hope I’m here for a long time,” McDermott said of Indiana on the day of the trade deadline. “But I understand the business side of it too.”

Any contract extension that McDermott could sign with the Pacers is also a deal that he could receive as a free agent this summer. That’s another confounding factor in any extension talks. Any new deal has to be strong enough that it entices McDermott to not enter free agency and see his options. That’s why any extension is unlikely to happen once the season officially ends — there is little reason at that point. It would make far more sense for McDermott to enter free agency and weigh his options at that point, even if he wants to return to Indiana. He could fetch a big contract thanks to his ability to knock down triples.

So far, there has not been much traction between McDermott and the Pacers on extension talks. “No, not to my knowledge. I think we’re really just focused on each game, trying to take it day-by-day,” McDermott said when asked if he knew of any extension discussions between his agent and the Pacers. “If you get caught up in that stuff, it can make things tough. I know we have a good relationship. These guys have believed in me when, my career, I was kind of bouncing around there, so I have a lot of love for this organization. For [Pacers President of Basketball Operations Kevin Pritchard] and Chad [Buchanan, Pacers General Manager] and [Pacers Owner Herb Simon]. Because they believed in me. It’s been nice to find a home in a way in Indiana.”

Clearly, McDermott likes playing for the Pacers, and he enjoys being a part of the organization. And the coaching staff and front office are fond of McDermott. It’s a solid partnership, and one that would make some sense to go on for longer. Plus, the Pacers need shooting.

But salary cap wise, giving Doug McDermott a contract extension is tricky for the Indiana Pacers. They can’t lengthen his deal without limiting their team-building options in the future, and it’s hard to find a cheap enough deal that both makes it worth it for McDermott to ink a deal before becoming a free agent and makes it smart for the Pacers long-term.

McDermott has played well for the Pacers and is worth more money than he is making right now. It is certainly possible that the two parties come to an agreement before the season ends. But given Indiana’s salary situation and the high cost of shooting in the modern NBA, it is unlikely that the two groups agree on a contract extension, and the Pacers would be wise to be passive in talks. They need to keep flexibility going forward given how much of their roster is in flux.

That doesn’t mean McDermott’s time with the Pacers will come to an end soon, but it does mean that there’s a good chance the North Dakota native becomes a free agent in a few months. The two parties can negotiate any time from now until then, and as long as they maintain a good relationship, there is always a possibility that McDermott signs another contract with the Pacers at some time. But an extension appears unlikely.