If the reports are true, Tom Crean's contract, which was to be eight years long, will be ten years long when ultimately signed. While some outlets are describing this as an extension, apparently Crean has not yet signed anything but the memorandum of understanding (via Hoosier Scoop) that he signed soon after accepting the position in April.
This will, of course, lead to lots of hand-wringing, but it's not all that big a deal. Crean will never see the end of his contract. If he excels, he and IU will renegotiate long before 2018. If he doesn't do well, IU will buy him out long before then. As many others have noted, this almost certainly is a response to the deterioration of the program since Crean took over (because of circumstances beyond his control, of course). It's hard to remember than on April 1, while Armon Bassett and Jamurcus Ellis has been thrown off the team, it was widely expected that they would have a chance to return, while Deandre Thomas, Eli Holman, Jordan Crawford, and Brandon McGee theoretically were in good standing. On top of that, Crean will not be working for the AD who hired him.
Adding two years to the contract likely will result in an increased amount that IU would have to pay to buy Crean out of the contract. It will be interesting to see what other terms change. I would hope that the liquidated damages that Crean must pay to IU if he leaves would increase as well. Ultimately, it will become clear when Crean signs his contract and it is released publicly.