Pacer Cap Situation – Chasing Lance – July 15th Snapshot

Two weeks into Free Agency – and five days after the July moratorium ended – Lance Stephenson, the Pacers, and their fans are still trying to find out where the quirky, talented wing will continue his NBA career. While we have no new information from either camp, events over the past few days have at least eliminated some possibilities. Friday, it became apparent that the Lakers were no longer in the hunt. When Houston chose not to match Dallas’ three-year, $46 million offer sheet to Chandler Parsons, the Mavs dropped out of the market.

However, several teams still have the means to beat the Pacers’ offer. Charlotte is back in play after losing Gordon Hayward, but beat reporter Rick Bonnell maintains they aren’t interested. Atlanta has enough space, as do potentially Houston and perhaps Phoenix. For teams with space, it is simply a matter of will.

The biggest threat to the Pacers remains – in my opinion – a big dollar, short term contract. Indiana’s offer of five years and $44 million only pays Lance roughly $7.7 million next season, and a combined $15.9 million in the first two. A two-year, $20 million offer gets Stephenson 25% more money in these years. I’m sure none of us doubt Stephenson’s faith in both his talent and indestructibility, so should we doubt his faith in his ability to land another big contract in two years? Another big contract signed after a new TV deal is inked?

In any case, there’s a lot we don’t know about the actual machinations of the market surrounding Stephenson’s next deal. However, thanks to Mark Deeks of Shamsports, we do know a lot about the Pacer cap situation and the dilemmas they are facing.

Mark’s right, but the Pacers have an even more immediate issue regarding their offer to Lance Stephenson. Their current payroll makes signing Lance to that deal illegal.

On July 3rd, we outlined the Pacer Cap situation at that time. We also noted that – due to details in the 2011 CBA – Indiana was actually hard capped at $4 million above the tax threshold, which has since been officially locked at $76.829 million. That cap update indicated that the Pacers would be a couple thousand dollars above that hard cap figure, but that’s so small as to be a rounding error.

However, Lavoy Allen was signed in the intervening two weeks, and now the Pacers have to clear almost $1.1 million before Lance can put his name to the current offer.

Now, this is ostensibly a minor detail. Indiana can reduce their payroll in any number of ways. The most direct is to waive Luis Scola, who is only guaranteed $1.9 million of his $4.9 million salary. However, what is important is the timing .

Barring something unforeseen, the Pacers will not pay the tax for this – or any other – season. So, as a practical matter, Larry Bird will be looking to keep his total payroll under the $76.829 million threshold. However, the deadline for being under that number is the last day of the 2014-15 season. Conversely, Indiana cannot exceed the $80.829 million hard cap for any reason or any amount of time.

If Lance’s contract fit under the hard cap, then Bird and Kevin Pritchard could spend the rest of the summer looking for a salary-saving trade that would get Indiana under the tax. They could even wait until the trade deadline, but it would likely be their preference to have this resolved before opening night. Since it doesn’t – and the offer remains on the table despite their current payroll – Indiana will have to act immediately, should Lance accept.

For those watching, the Lance Stephenson Free Agency experience has moved at a snail’s pace. However, if Stephenson chooses to be back home again in Indiana, then things will start to move very quickly, indeed.