Offseason Primer: Indiana Pacers
This is a pivotal offseason for an organization looking to take the next step towards contention
Current Roster Outlook (*Excluding two-way contracts*)
Cap Outlook: (*All cap projections courtesy of Spotrac*)
2024-2025 NBA Salary Cap Projection: $141M
Luxury Tax Line: $171M
Luxury Tax 1st Apron Maximum: $178M
Luxury Tax 2nd Apron Maximum: $189M
Indiana’s Total Cap Allocations (Active Roster Salary Commitments + Cap Holds): $216M
Practical Cap Space: $-73M
Maximum Possible Cap Space (All options declined, cap holds renounced and exceptions waived): $35M
Possible Financial Avenues:
The Pacers could theoretically open up a somewhat sizable amount of cap space this summer, but doing so would mean walking away from Pascal Siakam and Obi Toppin, as well as waiving T.J. McConnell. Since cutting ties with their second-best player and two key bench pieces seems highly unlikely, Indiana is a near lock to operate above the salary cap, and depending on how expensive retaining their own impending free agents gets, they may even be bumping up against the $171M tax line. Pacers’ owner Herb Simon has traditionally been notoriously thrifty when it comes to making luxury tax payments, but it’s possible that could change given the team’s success this past season.
Bottom Line:
Depending on how expensive the first year of Pascal Siakam’s new contract is, and Indiana’s willingness to push towards the 1st apron of the luxury tax, Indiana may be forced to make a choice between either retaining Obi Toppin in restricted free agency, or utilizing the full Non-Taxpayer Mid-Level Exception.
Organizational Direction:
The Pacers front office is probably riding high after the team’s surprise run to the Eastern Conference Finals, as well they should be. They have one of the best young point guards in the league in Tyrese Haliburton, and trade deadline acquisition Pascal Siakam proved to be a seamless fit with the team’s run-and-gun style. Indiana has firmly shifted into win-now mode, and there is a ton of reason for excitement among both the organization and the fan base.
However, it’s also imperative that Indiana takes genuine stock of their team, and acknowledges the realities of their ‘23-24 success. The Pacers path to the Conference Finals included wins over two completely injury-ravaged teams in Milwaukee and New York, and they were swept by the first true contender they faced in Boston (although they had a pretty big injury of their own in that series). We’ve seen teams built around star point guards, such as the 2021 Atlanta Hawks and the 2019 Portland Trail Blazers, double down on their rosters following (somewhat) fluky playoff success, and almost immediately be burned by those decisions. Indiana has a core that should make them a perennial playoff team and a threat to win a round or two, but is a foundation of Haliburton, Siakam and Myles Turner/Andrew Nembhard enough to form a true title contender? In my view, Indiana needs to push for at least one more impact piece, and they should do their best to keep as many avenues to that acquisition open as possible.
Offseason Checklist:
1) Re-sign Pascal Siakam…but maybe not for the max
If the history of the NBA is any indication, Indiana likely had a good idea from Pascal Siakam’s representation exactly what it would take to re-sign him this summer before they traded for him this past January. Siakam is eligible for a 5-year deal that would start at 30% of the salary cap, which translates to about $42.3M in the first year of the deal, and well over $200M over the life of the contract. My best guess is that Indiana is willing to give Siakam his max, and that he signs relatively quickly once free agency opens: If there’s any negotiation, it may come over the length of the deal, as I could see Siakam being amenable to a 4-year pact, or possibly some sort of non-guarantee or team option on the fifth season.
While I’m not saying I would be willing to let Siakam walk rather than pay him his full max, I wouldn’t feel great about devoting such an enormous amount of my spending power to him either. He’ll be entering his age-30 season in ‘24-25, meaning he doesn’t align perfectly with Tyrese Haliburton, and as a player who is more reliant on athleticism than skill and shooting, it’s an open question as to how he’ll age. Even in his current form, Siakam is more of a fringe All-Star type player than a true high-level second option, although his transition prowess does fit better with Indiana than just about any other team. Looking out a few seasons, Indiana is going to be paying Tyrese Haliburton close to 35% of the salary cap, and both Myles Turner and Andrew Nembhard are going to be due sizable raises. The Pacers are going to get very expensive very quickly, and given their small-market status, going deep into the luxury tax is probably out of the question. Even if Indiana can get Siakam for a small discount from his max, or structure his contract to be frontloaded and decline in the out years, it could really help their future books and subsequent flexibility.
2) Explore the trade market for Bennedict Mathurin
Through the first few months of his rookie season in ‘22-23, it looked like the Pacers had a future star on their hands after drafting Mathurin #6 overall. However, Mathurin’s shooting faded as the season wore on, and he fell out of Rick Carlisle’s starting lineup shortly after the start of the ‘23-24 campaign. Indiana traded away starting shooting guard Buddy Hield at the ‘24 trade deadline, seemingly with the intention of clearing a path for Mathurin to rejoin the starting ranks, but he went down with a season-ending shoulder injury in early March, and wasn’t a part of the Pacers’ playoff run this spring.
It might seem like dealing Mathurin now would be trading him at the low point of his value, but given Andrew Nembhard’s emergence as a backcourt mate for Haliburton in the postseason, it’s not clear how Mathurin fits into Indiana’s future plans. Additionally, while Mathurin has proven a certain level of volume scoring, he’s struggled with efficiency, defense and playmaking for others to this point in his career, all of which have kept him from earning Carlisle’s trust. It’s definitely possible that this is the last chance for Indiana to move him for clear positive value, while he still has some shine from his pre-draft status and hot start to his rookie season.
As noted above, while the Pacers have a very good roster, they don’t have a great one, barring some insane level of internal development. Given that they don’t project to have much financial flexibility going forward, they need to be willing to get creative in order to add the type of talent they need to break through to the next level of contention. Dealing Mathurin and watching him realize his full potential elsewhere is a risk, but holding onto him and seeing his prospect luster fade away is as well.
3) Toppin or the MLE?
If we pencil in Pascal Siakam’s salary at $42.3M, assume that Jalen Smith opts in to his $5.5M player option for ‘24-25, and fill in the remaining roster spots besides Obi Toppin’s with minimum contracts, the Pacers are likely to have just under $160M committed to 14 players. A restricted free agent, Toppin seems like a good bet to earn in the low 8-figures annually on his next contract, which would put the Pacers right up against the $171M tax line. While Indy could make some cost-cutting maneuvers elsewhere, it seems unlikely that they would be willing to re-sign Toppin and replace one of those minimum deals by signing a player with the Non-Taxpayer Mid-Level Exception, which would hard cap them at the $178M 1st apron and require them to pay a (small) luxury tax bill.
If the choice does end up functionally being between re-signing Toppin or using the MLE, I think Indiana might be better served to let Toppin walk. While he’s a perfect fit for their transition game and a very useful regular season player, Toppin’s pathway to playing time would be blocked by Siakam, and his defensive concerns make him a tough fit in a postseason rotation. If Indiana could add a wing in free agency like Caleb Martin or Kelly Oubre, they could add some desperately-needed defensive depth behind Aaron Nesmith.