May 30, 2014; Miami, FL, USA; Miami Heat forward LeBron James (left) stands next to Indiana Pacers guard Lance Stephenson (right) during the first half in game six of the Eastern Conference Finals of the 2014 NBA Playoffs at American Airlines Arena. Mandatory Credit: Steve Mitchell-USA TODAY Sports

The Pacers' Current Salary Situation

The Indiana Pacers have 10 players under contract for next season. The league requires a team to have 13 players and the maximum roster size is 15. According to Larry Bird, the Pacers want one of those guys to be Lance Stephenson, so it is presumed that re-signing him will be the top priority of the summer. He is the Aerosmith tickets, if you will.

As previously discussed, Paul George making third team All-NBA will make it a bit tougher for Indiana to keep Stephenson. George got a salary bump of about $1.2 million, and that means Indiana is $1.2 million closer to the luxury tax threshold that the team will presumably not exceed.

But Indiana does have a few ways to clear some extra room, one of which involved waiving Luis Scola, whose contract is only partially guaranteed for next season.

Here’s the backstory of Scola’s deal: Originally, the salary ($11.0 million) for the final year on his deal (2014-15) was completely non-guaranteed. However, the deal said that the season could become partially or completely guaranteed if he met certain criteria over the first four years of the deal. It would have become fully guaranteed, had he been voted as a starter to the All-Star game. Other than that, he could get $500,000 guaranteed each year that he played 85% of his teams games and made the playoffs, and another $500,000 each year he either played in all 82 of his team games or played in 85% of his team’s games and the team went at least .500.

By the time he was amnestied by Houston in the summer of 2012, he had twice met those criteria (thus guaranteeing himself $1.0 million), but the Rockets are on the hook for part of that ($559,000). Then Scola earned another $500,000 with Phoenix by playing all 82 games, and he got another $1.0mm by (a) playing 85% of the games this year with Indiana and making playoffs, and (b) playing 82 games (also playing 85% on a .500 team).

That all adds up to $2.5 million guaranteed next year, though Indy is only on the hook for $1.9 million of it. Thus, if the Pacers waive Scola this summer, they will free up about $2.9 million.

Here’s the actual dollar situation:

lance money stuff

Assuming the luxury tax threshold stays at the current projection ($77 million), the Pacers would have $9.7 million of space that could expand to $12.6 million if they released Scola.

However, the team would only have 10 players under contract with that $9.7 million number and just nine (after releasing Scola) if they got the full $12.6 million. Since they would have to employ at least 13 players (and they would probably want to carry 14), the table above assumes adding enough minimum-level-salary players to get to a roster of 14. (I’ve assumed the third-year minimum salaries here. They could conceivably save about $400,000 per head by only signing guys on rookie-minimum deals, but you let me know how comfortable you feel about Donald Sloan as your 10th best player. Side note on Sloan: his deal is unguaranteed, too, but he’s making the minimum, so there would be no savings in cutting him and if you’re going to employ minimum-level players there is probably some benefit in having one of them be a guy who already knows the playbook.)

You got it?

Even if not, here is the takeaway: The Pacers technically have $6.95 million of “available for Lance” money if they keep Scola, but they could increase that sum to $8.96 million by cutting the Argentine. Though those numbers are likely too high.

Why? Because we should assume that the Pacers want to have a bit of leeway under the tax. That is to say, if the luxury tax threshold is $77 million (as it is projected and assumed in this financials), then the Pacers will probably target to be at least $500k below it — if not more.

This is mostly to make sure that some minor accounting adjustment doesn’t put the Pacers over the tax, at which point Herb Simon shoots everyone. But it is also because, from a basketball perspective, not having any space at all to make moves during the season isn’t a desirable position to be in. Not only can you not sign anyone, but you can’t even take on small salary increases in trade.

That’s why the realistic “available for Lance” money in year one is $6.5 million (with Scola) and $8.5 million (without). Truth be told, those are probably still high. Honestly, I think the Pacers will be targeting to be between $75 million and 76 million in total payroll next year (if not less). If that’s is the case, shave another $1 million to $1.5 million off of those starting salary numbers for Lance.

Tangentially, I think it’s far from certain that the Pacers will release Scola. I think they like him well enough, but mostly it would depend on whether they viewed it as avoiding $2.9 (less his replacement) or paying someone $1.9 million to play for someone else.

There is one other way in which Indiana could save some: the “stretch provision.” This means that you (a) waive a player, and (b) pay them their full salary, but (c) the team, for salary cap purposes, is able to “stretch” the remaining dollars for twice the remaining left of the contract plus one year.

The obvious candidate for Indiana is Chris Copeland, whose remaining $3.14 million could be “stretched” over the next three years, counting just $1.05 million against the cap for the next three season.

I think there is absolutely no chance at all that Simon would ever approve of “stretching” a player, however. It’s one thing to release Scola to save money, but there’s no way that I see the Pacers stretching Copeland (or Ian Mahinimi, who would count against the cap at $1.6 million for the next five years) just to create space to sign someone else (or re-sign Lance). It’s just bad business. Plus, Bird likes Cope, and if they cut Scola, then the backup power forward spot is probably Cope’s job.

The most likely other avenues for creating space are either unloading George Hill or Roy Hibbert’s deal. The latter is probably more likely, but that would make it the “slim” in the “slim to no chance” category. That doesn’t mean I don’t think the Pacers would try to move Hill; it’s just that I don’t think they would do it as simply a salary dump.

What does all this arcane financial information mean?

Expect the Pacers to try to stand pat this summer, just re-signing Lance — if they can (I think it’s a 50/50 proposition at best). They don’t really have the space to fend off big offers, but more than anything else, I think it will be the years that could cost the Pacers. I have a hard time believing Simon would be willing to guarantee more than two, perhaps three years. There are just too many bad memories for this franchise, and to be brutally honest, I don’t know how you guarantee five years to Lance.

As always, Mark Deeks’ Shamsports and Larry Coon’s CBA FAQ were relied on heavily in the creation of this post.

Tags: Indiana Pacers Lance Stephenson Luis Scola

  • Jack Wright

    I’m feeling like we’re going to lose him. I could see Thibs and MJ both wanting him. Depends on how much.

    • 15points126seconds

      bulls want nothin to do with him haha. his personality seems (luckily for us, IMO) to have brought down his market not just in total $$ he could make but also in potential teams that might throw him an offer. My guess is that he costs too much for most veteran teams looking for a last piece and scares away most young teams with cap space because of his locker room- baggage.

      dunno too much about the bobcats situation (i sincerely hope thats what you meant by naming MJ…)

      • Jack Wright

        what else could I have meant

  • Dennis Hawkins

    This team made a bunch of money this season. If they refuse to dip into the luxury tax for even 1 season to keep their talent, then we should just get cool with the fact that it’s a 2nd-4th place Eastern Conference team as it’s max. We’ll be sitting around in the coming years like OKC fans are, wondering what the team would look like with Harden on it.

    • Ian

      Simon is also a billionaire, isn’t he? What’s he worried about a couple million dollars?

    • 15points126seconds

      would hate it so much if we turned into the next OKC “What if?” team….
      but don’t forget the fact that simon lost a ton of bunch money for YEARS on the pacers, I don’t blame him for being anti-luxury tax. There’s a reason most teams don’t have 5 highly paid guys, and though they were reasonable at the time, Roy Hill and West have huge contracts and down seasons statistically.
      I don’t remember if it was just speculation or bird made the comment, but if we get to championship contention reporters said that the owner would be willing to pay the luxury tax. We’re obviously not there yet, and the “repeater luxury tax” is highly punitive, not just in terms of cost but also for a team’s ability to maneuver personnel

  • Ian

    Can the Pacers offer Lance a backloaded deal, like of like what Jeremy Lin got? What are the rules about that?

    In two years, everyone but PG comes off the books, and the cap is increasing pretty rapidly.

    • Zack

      The way that “poison pill” contract worked out for both Lin and Asik, the salary cap number stays the same throughout the entire contract (for the team offering the contract to the RFA, in this case Houston for both).

      • Ian

        Reading here:

        It seems that the averaging of the contract value is a special case with teams offering an RFA a deal vs. the team matching it. The matching team would count the years as they are, rather than the average.

        Since Lance is an UFA, I’m guessing that the special rule wouldn’t apply, and that whatever deal he gets is applied on a year to year basis, which could be of great benefit to the Pacers.

        I’d love for someone who is an expert on this stuff to clarify.

        • Zack

          I’m not an expert, but I do know that the Pacers can only offer Lance a contract with yearly raises as a % of his salary (I believe for Bird rights players it’s 7.5%, but that may not be correct).
          The Pacers can’t offer a backloaded contract to Lance.

    • Zack

      So the short answer is no, I don’t believe the Pacers can offer a “backloaded” contract to Lance.

  • Jack Wright

    People think we have a flawed roster..? That’s garbage. We have a coach who can’t even come close to maximizing the production of his very talented players. The exact thing that makes Popovich great is exactly what makes Vogel terrible. Pop takes a no-name, previously roster-cut Danny Green and turns him into a Finals standout. He turns a burned-out overweight Boris Diaw into one of the most key bench players in the league. He turns Patty Mills into a recognizable name. Vogel, however, mismanages and under-utilizes his players’ talent, setting up surprising (not really) career comebacks by guys like Gerald Green and DJ Augustin. It’s a shame, but he just isn’t a real basketball coach.

    • 15points126seconds

      Way overboard- Vogel has done great things with this team to get us where we are. Definitely a top 10 coach (If you don’t agree, name 10 currently better). Better question is whether he’s the right coach to take us from nearly-there to all the way. I’m ok with giving him another year to figure out the kinks, but next year if I’m LB, I’m expecting significant improvements on offensive sets and better production from the bench. Watson-Turner-Scola-Mahinmi core had looked very good bench on paper…
      And if he comes up short next year, I look at an experienced, more discipline-dispensing guy like George Karl or JVG (who I would note are less accomplished than Vogel but probably better coaches). But for the love of God, no Mark Jackson. How do you have a below avg offense (most isos in the league) on a team with steph curry, thompson, and david Lee?

      • Jack Wright

        Current NBA coaches I’d rather have than Vogel: Brad Stevens, Tom Thibodeau, Rick Carlisle, Brian Shaw, Steve Kerr, Doc Rivers, Erik Spoelstra, Jeff Hornacek, Gregg Popovich, Stan Van Gundy, Kevin McHale, Scott Brooks, and Randy Wittman. Possibly more but there’s several guys I know nothing about. It’s easy to throw out the (“Vogel’s a top ten coach”) bullshit, but it’s also meaningless.
        And I don’t want Mark Jackson either, but it sure as hell isn’t because I think he’s a worse offensive coach than Vogel. Vogel is stubborn, weak and an embarrassment.

        • 15points126seconds

          There’s no denying that Vogel is stubborn, to a fault. But he played a system that worked for us last year and most of this year, by not compromising our identity.hes proven to be a good coach- 56 wins, #1 seed, back to back ECFs against the champs support that. Yeah I would like to see our offense flow better and our guys held more accountable, but I’d take him and his #1 defense against any rookie coach or retread (wizards and rockets fans are begging to fire wittman and mchale!) only coaches considered better in the league: 1) pop 2)Carlisle 3)Spo 4) Doc 5)Thibs.

          • Jack Wright

            we just disagree

    • wesmont

      There is a great deal of merit in what you said here.It seems to me San Antonio really clicks because the ball moves,the pacers look stagnant when the ball stops.The one-on-one moves by Lance and Paul George just stop the offensive flow.Admittedly,we have low post players ,and feeding them also stops the ball.But we need to have a coach who can get them to keep the ball moving.I know I may be abusing the obvious here.

  • 15points126seconds

    good stuff Tim, but I wish you’d have thrown a couple scenarios out there about potential options.
    eg, What if we gave lance 5 years for less annual money, with a team option for the 5th. Is that a realistic solution?

  • 15points126seconds

    Curious as to what the general Pacer fans think, but should we resign Lance? and if so, for how much?
    I like Lance and I 100% think he’ll mature with time, but I wonder if we could entice a UFA like kyle lowry with the money we could throw at Lance. Feel like a strong playmaking PG (even bad shooters like rubio or rondo) would really help us fix our ball movement and spacing issues. Considering we have so many above-average individual offensive-capapble players (PG,West, Lance for sure. Debateable for Roy and Hill), its bizarre that we haven’t developed an offensive system to take advantage of it.

    • Jack Wright

      Yes. It’s bizarre. Frank Vogel is terrible.
      And you want a strong playmaking PG..? His name is Lance Stephenson.

      • 15points126seconds

        I disagree. Lance’s usage rate, and stats in every category increased this year, there’s no denying his talent and I support the idea of keeping him. But I doubt that he can handle the role of primary point guard- this year, hthough his stats went up everyone else’s went down with the exception of PG. I think he took 3.5 shots more/game and hill took 3.5 shots less/game. He’s a spark that can get his own shot, but I don’t think he makes his teammates demonstrably better. This is mostly wishful thinking, admittedly, but a guy like rondo has proven success in putting guys everywhere on the court in better position to score buckets, and also plays D and fills up the stat sheet. But since it’s unlikely we can find an all -star caliber PG, then I’m ok w rolling the dice on lance and hoping he can continue to improve.

        • Jack Wright

          I’d love Rondo to come here, but doubt it

  • Adam Best

    Think this team needs to be more worried about the future than getting trigger shy over the ghosts of Ron Artest. Lance is a bit wacky, but not half as dangerous as he’s labeled. Bird himself said he was the hardest worker last Summer. If they don’t re-sign Lance, they aren’t going to just magically replace a potential top 5 SG with no draft pick or cap space.

    Without Lance, Bird might as well ship West, Hibbert and Hill out for whatever young assets/cap relief/picks he can get and build a super young team around Paul George. In other words, you have to re-sign Stephenson regardless of the cost. He’s a better bargain at even $10-12M than Hill at $8 and especially Hibbert’s deal.

    • 15points126seconds

      Not just potential top 5 SG. I think he’s already there, talent-wise. Doubt he’ll ever be a top spot up shooter from beyond the arc, but he’s improving. Rather I’d to love to see him hone in on rim-attacks to collapse the defense or pull up for jumpers in the paint, developing his game more like DWade and Kobe.

    • Jack Wright

      We lose Lance, we’re done.

  • Greg Norfleet
    • wesmont

      Why would houston make that trade?They have a guy good enough to start backing up at center.Think they would move him to keep the same logjam at center?Doesn’t make any sense to me.

      • Greg Norfleet

        Seems like you might have misread it. Hibbert would go to NY to facilitate Carmelo to HOU.

        HOU does it to form a big 3.5 (Harden, Howard, Anthony, Parsons).

        IND does it because although Roy is better than Asik when he’s playing his best, Asik is more consistent and deserves to be a starter in the league. He also costs ~$8M compared to Roy’s $14M, so even with Shump we’d have an extra $4M to spend on getting a scorer off the bench.

        NY would do it because Hibbert is better than Chandler at this point in
        his career, T Jones is a great prospect, and they’d make up for losing
        Lin in free agency a few years ago. Admittedly, they lose this trade,
        but if Anthony leaves, they’d prefer a sign and trade over losing him
        for nothing.

        • wesmont

          Makes sense what you say now I’m quite interested

    • Jack Wright

      yuck that sucks for all sides

  • lil-bang

    From other ‘sources’ (mainly other articles on this site and ESPN )I have read, they showed Lance’s increases in numbers were really only in the second half of the season and were strangely correlated with Hill(assists/points) and Hibbert’s(rebounds) drop in number and not to mention a drop in the Pacer’s wins. Shouldn’t his increase in stats show an increase in the team’s production???
    I really don’t think anything needs to be done with this team. The bench was only here for one year and had limited playing time to develop. The starters got stuck in alot of media hype and criticism this year that they weren’t prepared for and showed they are a ‘young’ team. Vogel is still growing as a coach and I really don’t see another coach available that is any better. Plus if we need to WIN NOW like most people think, blowing up and reloading will just put this team back.
    PG and Stephenson still have a couple years until they reach the age the LJ and MJ won their first titles. Hill and Hibbert get a couple more years on them to learn the veteranship they need. West is the only piece that worrisome of age, but if Lance and PG improve their games, and Hill and Hibbert polish theirs…this team will be hard to stop for several years.
    Larry has been known to flip the the tables quite quickly so who really knows for sure what is going to happen, but for the Pacers sake I hope they avoid a trade, seems like they never come out on top…see Phoenix, see Mavericks. What I really think Lance’s future comes down to is if he is willing to take less to stay with the Pacers. Some team will offer him more than the Pacers. Other GM’s had these figures already and they just have to figure out how much more they need to throw for Lance to bite.
    GO PACERS!!!