Next Contract Series: Jaylen Nowell and Naz Reid

Next Contract Series: Jaylen Nowell and Naz Reid

Veteran extensions in the NBA are complicated. For one set of players, those who are stars (or near-stars) but on less than maximum contracts, it often makes little sense to extend. These are players like Jaylen Brown, Domantas Sabonis, Pascal Siakam and Fred VanVleet.

On the other end, you have players on maximum deals who are established All-NBA talents. In recent years, those players have chosen to lock in another max contract via extension. This offseason, Devin Booker, Damian Lillard and Karl-Anthony Towns are good examples of that group.

In the middle, you have non-max players that don’t have star upside. For them, an extension probably makes sense. They can ink an extension and stay with a team where they’ve earned a rotation role. Recent examples of these players are Kentavious Caldwell-Pope, Gary Harris and Taurean Prince.

But there’s another group of extension-eligible players. They’re often somewhere between the non-max players and the near-star group. These players are often brimming with potential, but haven’t quite broken out. Or they’re on an undervalued deal, but not likely to truly cash in as a free agent.

For these players, what we’re going to call the “Dinwiddie Extension” makes sense.

What is the Dinwiddie Extension? As you probably guessed, we’re naming it after Spencer Dinwiddie, as he was the most recent recognizable player to sign this type of extension. When with the Brooklyn Nets, Dinwiddie got his career on track after a series of false starts. That earned Dinwiddie a three-year, $34.4 million extension.

In previous pieces about Jaylen Brown and Pascal Siakam, we wrote about how these two players extending makes little sense. That’s because of the rules limiting many players to only a modest bump in first-year salary of an extension of 120% of the final year’s salary.

However, in a Dinwiddie Extension, players who are on team-friendly (read: underpaid) contracts, they are eligible for a bigger bump in first-year salary. In this case, these players are eligible to sign an extension worth 120% of that season’s estimated average salary. In both a standard Veteran Extension and a Dinwiddie Extension, the player is also eligible for up to 8% raises off the first-year salary.

The current maximum Dinwiddie Extension looks like this:

    • 2023-24: $12,950,400
    • 2024-25: $13,986,432
    • 2025-26: $15,022,464
    • 2026-27: $16,058,496
    • Total: four years, $58,017,792

That’s 120% of the estimated average salary for 2022-23 ($10,792,000) with 8% raises.

Now, as with almost any extension, players and teams can negotiate the terms of this type of extension. They could agree to less than the maximum allowable amount in Year 1. They could do less than 8% raises. And, as always, they could add a player option or team option onto the final season.

Often, players who sign the Dinwiddie Extension are coming off a minimum contract, or they are coming off a deal that pays them less than the Non-Taxpayer MLE amount. The estimate average salary plus 120% is often in the range of what a player could get coming off a Non-Taxpayer MLE deal.

The most recent player to sign a Dinwiddie Extension was, coincidentally, Dinwiddie’s Dallas Mavericks teammate Dorian Finney-Smith. The versatile forward was completing a three-year, $12 million contract that paid him $4 million flat per season.

Before reaching free agency, Finney-Smith signed a Dinwiddie Extension that looks like this:

    • 2022-23: $12,402,000
    • 2023-24: $13,394,160
    • 2024-25: $14,386,320
    • 2025-26: $15,378,480
    • Total: four years, $55,560,960

This deal was 120% of the estimated average salary with 8% raises. Finney-Smith was also able to negotiate a player option on the final season.

With that framework in mind, let’s look forward at who might be next up for a Dinwiddie Extension.

Two players we want to cover here are Jaylen Nowell and Naz Reid of the Minnesota Timberwolves. Recently, The Athletic reported that the Wolves have begun extension negotiations for both Nowell and Reid.

Minnesota is capped out for the foreseeable future. Karl-Anthony Towns is signed for more than $294 million through 2027-28. Rudy Gobert is owed $169.6 million through 2025-26. Anthony Edwards will undoubtedly ink a five-year, maximum rookie scale extension (likely with Designated Player language) next summer. That will be three players on max deals.

That leaves the Wolves in a spot where they need to lock up talented players to long-term extensions wherever possible. Thus, the negotiations with Nowell and Reid have begun.

Jaylen Nowell

Let’s start with Jaylen Nowell, as he’s kind of a fascinating test case of projecting value within the terms of a Dinwiddie Extension.

Prior to this season, a look at Nowell’s career stat lines shows an interesting player, but not one necessarily worth $58 million over four years. But you have to look a little deeper.

Nowell’s rookie season was spent mostly with the Iowa Wolves of the G League, as he saw limited NBA action. In the G League, Nowell was pretty dominant. He scored 21 points per game on 49/44/73 shooting splits.

The next two seasons, Nowell played himself into a rotation role with Minnesota. Last season, Nowell showed real signs of what he might be. He averaged 8.5 points in 15.7 minutes per game off the Timberwolves bench. In a very crowded guard rotation, Nowell’s shooting stood out. He knocked down 47.5% of his shots overall, while hitting 39.4% of his 160 three-pointers.

In a very small sample of five games this season, Nowell has become Minnesota’s primary bench scorer. It’s early, but it’s safe to say Nowell has arrived as a bench scoring weapon. But there’s more there too.

Nowell is flashing some playmaking skills in an offense where the majority of touches are dominated by Towns, Edwards and holdover veteran point guard D’Angelo Russell. Nowell is also getting to the boards more. Both the playmaking and rebounding match his NCAA and G League profile as a better all-around player than he’s shown in his NBA career.

All that said, it’s clear that Nowell is someone the Timberwolves should be considering extending. But should Nowell take the Dinwiddie Extension?

Let’s start with the fact the Nowell is wrapping up a four-year, slightly above minimum contract that he signed with Minnesota in 2019. All told, Nowell will have made $6.6 million over his first four years in the NBA.

Next, we move onto age. Nowell will only turn 24 years old this summer, despite the fact that he’ll have four NBA years on his ledger at that point. Whoever signs Nowell will be getting him during some key years of his career. He’s young enough that continued improvement can still be projected, and by the end of his next deal, Nowell will be headed into his prime years.

Minnesota would do well to get Nowell to sign the Dinwiddie Extension. At worst, he’ll be one of the best bench guards in the league over the next four-to-five seasons. But there’s potential that Nowell could, and probably should, be starting alongside Edwards in the Wolves backcourt as soon as next season. He’s not really a point guard, but Minnesota runs so much offense through Towns and Edwards, that shooting and defense are more important at that spot than traditional playmaking.

As for Nowell, he might want to wait. On one hand, Nowell would double his career earnings in Year 1 of a Dinwiddie Extension. That’s hard to pass up. But Nowell and his reps would do well to survey the landscape this summer.

At least nine NBA teams project to have between $20 million and $66 million in cap space this summer. As more extensions are signed, the free agent class will only weaken. And shooting and scoring, with good size, are always something teams are willing to pay for.

It’s not unreasonable to project that there will be more cap space available this summer than good players to spend it on. Nowell will be an unrestricted free agent. It’s not out of the realm of possibility that a team could offer him somewhere between $15 million and $20 million in first-year salary.

A comparison here is Jalen Brunson. Brunson was in a very similar spot to Nowell in terms of career earnings. He was also in the midst of a breakout season when he was eligible for a Dinwiddie Extension. And, like Nowell, Brunson was a pending unrestricted free agent heading into last summer. He bet on himself and got over $100 million from the New York Knicks in free agency.

It’s certainly a tricky spot for a player coming off a minimum deal. The Dinwiddie Extension would offer Nowell immediate life-changing money, but there is the possibility that even more could be waiting for him this summer.

Naz Reid

As for his running mate Naz Reid, the contract situation is almost the same. Reid signed a four-year, minimum contract in the summer of 2019. He’s making the same $1.9 million as Nowell is in the final year of that deal this season. Like Nowell, Reid will also turn 24 years old this summer.

From there, the circumstances differ greatly.

First, the Minnesota Timberwolves already have two All-Star level centers on the roster in Towns and Gobert, even if Towns is spending more time than ever at the four this season. How much can Minnesota really invest in a third center?

Second, the free agent market is flush with solid options for backup centers. Teams will continue, as they have for years, pluck players from free agency to give them a serviceable 15 minutes per game for a minimum deal or slightly above.

Lastly, Reid’s play has been more inconsistent than the consistent upward climb of Nowell’s. Reid broke out during his sophomore season, when he averaged 11.2 points, 4.6 rebounds and 1.1 blocks in 19.2 minutes per game off the Wolves bench.

Last year, Reid had a rotation role from opening night and he sort of fizzled. Mostly, the 6-foot-10 big man’s shooting fell off. He didn’t finish as well in and around the paint, and his three-point shooting also dipped. And lineups featuring both Reid and Towns were messy and didn’t really work in limited regular season minutes, before disappearing in the playoffs.

Unlike Jaylen Nowell, Naz Reid isn’t worth the full Dinwiddie Extension. But that doesn’t mean Reid has no value at all. He’s an established solid backup center. For a playoff team that is built around their bigs, Minnesota needs a real player in that spot, even if for only 15 minutes per night.

Like Nowell, Reid has made comparatively little money in his NBA career. That leaves a deal less than the full Dinwiddie Extension as a still enticing possibility.

If we look around the NBA this past summer, we see backup centers signing for anything from the minimum up to $12.5 million per season. It feels like the sweet spot for Reid is somewhere in the middle of that range.

If Minnesota could get Reid on something like three-year, $22 million deal, that seems workable for both player and team. A sensible deal structure could look something like this:

  • 2023-24: $8,000,000
  • 2024-25: $7,360,000
  • 2025-26: $6,720,000

That’s a frontloaded contract that descends by 8% each season. That gives Reid more money right away, while also helping the Wolves with what will likely be an extremely expensive roster down the line. In addition, the deal is short enough that Reid can hit the market for a bigger third contract before he turns 30, should be prove worthy.

This deal would also pay Reid slightly more than the three-year, $18.5 million extension that Dean Wade recently signed with the Cleveland Cavaliers. That feels fair, as Reid is nearly three years younger than Wade, and he’s established more of a consistent role in the NBA.

Final Thoughts

The Minnesota Timberwolves have all the way until the end of the league year to sign Jaylen Nowell and Naz Reid to extensions. The Wolves should be aggressive in trying to get both players signed. The roster is only going to get more expensive, and that will limit Minnesota in adding outside talent. With Towns and Gobert signed long-term, and Edwards likely to join them soon, this isn’t the time to lose the complementary players that can keep the Timberwolves in playoff contention for years to come.