The Minnesota Timberwolves made some news on Monday night when they agreed to a one-year, $40 million contract extension with Jaden McDaniels. The deal will keep McDaniels in Minnesota through the 2029-30 season, but the contract may also have given fans some sticker shock due to the price of the deal.
As a player who's viewed as a secondary threat to Anthony Edwards and LaMelo Ball, investing in McDaniels feels like a gamble. But Timberwolves podcaster Dane Moore suggested that it may be a worthy one based on the trajectory of the NBA’s salary cap.
“In 2029-30, $40 million will be 21 percent of the salary cap,” Moore explained in a post on X. “21 percent of the cap in this year’s dollars is $34.6 million. …The wager the Wolves are making from a salary cap standpoint is that McDaniels will be worth more than 21 percent of the cap by 2029-30. Also, these days players don’t really wait until free agency to sign a new deal. Extensions are very common in this current salary cap environment.”
Jaden McDaniels’ contract extension is about what comes next
Looking at the contract, you can make the argument that the Wolves overpaid to keep McDaniels. While he has been an excellent defender since coming to Minnesota in a draft-day trade with the Los Angeles Lakers in 2020, his offense hasn’t been at the same level, despite setting career highs in points per game (14.8) and 3-point percentage (.412) last season.
The Wolves are also hoping to get more out of McDaniels offensively this year. But if that doesn’t happen, there’s a good chance that $40 million will become an overpay by the time it kicks in. McDaniels’ contract isn’t a bet on what he is right now, however. It is a gamble on what he could be by the 2029-30 season.
Moore listed several players in his analysis to make his point. While accounting for current-day salaries, McDaniels fits in with similar role players across the league, including Rudy Gobert ($36.5 million), Jalen Green of the Phoenix Suns ($36.2 million), and Alperen Sengun of the Houston Rockets ($35.6 million).
If McDaniels reaches another level, his contract could look like a steal in a few years.
Timberwolves financial situation has a big piece of the puzzle with Jaden McDaniels’ extension
Pressing against the NBA’s second apron now, the Wolves have to be careful they don’t fall into a similar trap in the future. Anthony Edwards could be eligible for a supermax extension next summer, and if he makes an All-NBA team or wins an individual award this season, that deal could be a four-year, $345 million pact with an average value of $82 million per season.
Gobert could also need a new deal, as he has a player option for next season. While that may not be necessary if Joan Beringer fulfills his expectations this year, the Wolves could look to bring him back if he falls short, which would require one more financial commitment.
The acquisition of Ball this summer could bring another financial hurdle to the Timberwolves. While he’s under contract through the 2028-29 season, he could be eligible for an extension that starts at 30 percent of the salary cap. This also assumes that Ball has the intended impact after being acquired in a summer trade with the Charlotte Hornets, but it seems possible given the way he’s rejuvenated the team as they prepare for this season.
With all of this in mind, the Wolves can have a major win if McDaniels fulfills his potential by the time the extension kicks in. It’s also made possible that McDaniels was willing to meet them halfway as he could have negotiated a longer, more lucrative contract if he has a breakout this season.
In the end, both sides can declare victory. But it’s a gamble that's more logical given the NBA’s rising cap and McDaniels’ upward trajectory.
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