The 22-year-old was due to become a restricted free agent following the 2020-21 NBA season. He also had the option of signing a qualifying offer approaching $16 million, which would have allowed him to become an unrestricted free agent in 2022.
Rookie-scale extensions are typically straightforward when involving a player selected first overall. But Fultz's journey to this point hasn't been typical of a No. 1 pick.
The Washington product was widely viewed as the best player in the 2017 draft class. The Philadelphia 76ers traded up to get him, as he looked like the final piece for a young roster that included Joel Embiid, Ben Simmons and Dario Saric.
What happened after that has been analyzed ad nauseam. Fultz picked up a shoulder injury early in his rookie year. Upon returning later in the 2017-18 season, he looked like a shadow of the player who averaged 23.2 points and shot 41.3 percent on three-pointers as a freshman with the Huskies.
That led to a level of discourse that wasn't helpful for anybody, as speculation constantly focused on whether Fultz was injured or dealing with a mental block that wrecked his self-confidence.
His trade to the Magic in February 2019 represented a fresh start and an opportunity to escape the constant scrutiny that followed him in Philadelphia.
After sitting out the second half of 2018-19, Fultz made encouraging strides in his first full season in Orlando. He averaged 12.1 points and 5.1 rebounds while shooting 46.5 percent from the field. His free-throw percentage also climbed from 56.8 to 73.0.
His 26.7 percent clip from beyond the arc showed his shooting problems remain, and his defensive metrics were a mixed bag. Fultz finished 20th in defensive real-plus minus among point guards (plus-0.63), per ESPN.com. However, he also allowed opponents to shoot 41.7 percent from beyond the arc, per NBA.com.
It was impossible not to read something into the Magic's decision to select Cole Anthony in the first round of the 2020 draft, but his and Fultz's skill sets differed enough that they could share the court together for stretches.
Head coach Steve Clifford explained the fit after the draft, per The Athletic's Josh Robbins and Sam Vecenie:
"It would give us two pick-and-roll players on the floor at one time. I could see that eventually as (Anthony) becomes more comfortable and they're comfortable together. Look at the great success Toronto has playing (Fred) VanVleet and (Kyle) Lowry together. So I think that we can definitely do it. They're big enough to do (it), and they're both physical enough to guard bigger players."
With this contract, Orlando is committing to Fultz as a long-term solution at point guard—or at the very least giving him time to continue growing into the role.