The Disabled Player Exception and Why the Pacers Won’t Use It

It’s too early to know what the Indiana Pacers front office is up to. As I see it, there are two reasonable options to consider following the (probably) season-ending injury to Paul George.

The first is staying the course, keeping the band together and waiting for George to return.

The second is scrapping the squad that lost back-to-back Eastern Conference Finals and trying to retool now for when George is back on the court in 2015-16 and when he (hopefully) can be truly back to what he was in 2016-17.

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If they take the second route, there really is no reason to use the Disabled Player Exception (DPE) that the team can now apply for.

What is the DPE ?

It is a clause in the collective bargaining agreement that allows a team to go over the salary cap in order to replace a player who is expected to be out for the season. The amount of the DPE can vary depending on the salary of the injured player, but in the case of George and the Pacers, the DPE is equivalent to the mid-level exception, or roughly $5.3 million.

So in terms of the rules, the Pacers — should they apply with the league for a DPE — could tomorrow go out and sign any free agent for up to $5.3 million.

Yet, they will not do that. Not as the roster is currently constructed, however.

Why?

Because that $5.3 million is not free money as the salary cap and luxury tax threshold is concerned. And the Pacers current payroll leaves them just $1.6 million below the luxury tax.

This is a team that, seemingly, let Lance Stephenson walk because they were willing to go over the luxury tax. Do you really think they would be willing to go over just to sign any of these players in hopes that they can make the playoffs next year?

The $5.3 million is not free money as the salary cap and luxury tax threshold is concerned. And the Pacers current payroll leaves them just $1.6 million below the luxury tax.

No. No, they will not do that.

There are other avenues in which Indiana could free up some more money, however.

For one, they could waive Luis Scola, whose contract for next season is only partially guaranteed (for around $1.9 million). Doing so would free up about $2.9 million. Add that to $1.6 and you have almost $4.5 million available. Say goodbye to Donald Sloan and his nearly $1 million non-guaranteed salary for next season and you’re up to nearly $5.5 million.

That’s actually some legit coin.

But for what?

Who are they going to sign with that money, on a one-year deal (which is all the DPE allows) that will make any difference? Remember, you also need to factor in the non-financial cost you send to the locker room when you void the contracts of two teammates in the aftermath of the gruesome injury just so you can add … Shawn Marion (best case)?

Yeah, I don’t see the Indiana Pacers front office operating that way.

(Another option under the DPE is trading for a player who is on the final year of his deal and makes $5.3 million or less. But the team that dealt the player would have to be in the market for cap relief from a soon-to-expire contract while getting nothing else in return. This means we’re talking abou a really cheap team that happens to have the right player available. I didn’t scour payrolls across the league but finding the right partner seems difficult.)

This takes us back to the other major course of action Larry Bird could take after watching George snap his leg in half: Selling the farm.

Again, I don’t really see the Pacers front office operating this way — they haven’t ever tanked in the team’s history. But they could move any or all of Roy Hibbert, David West, and George Hill in an attempt to reposition the team to be more competitive long term once PG returns.

Yet, if they do go that route, it is even harder to see them using the DPE.

Even if the trades they made did change the cap situation significantly, why would they want to spend money on a quality player at that point? Sure, they need to drum up some fan interest to sell some tickets, but they would not be trying to win games, hoping for a high lottery pick while getting any new acquisitions on-court experience so they’ll be more ready to play alongside George when he returns.