Indiana Pacers Payroll Questions as the Summer Approaches

The Indiana Pacers aren’t accustomed to having such an early summer vacation. But with no playoff berth, their offseason will be long — but it won’t necessarily be boring.

What is the salary cap for 2015-16 season?

We don’t know exactly. The NBA has estimated that the cap will be $67.1 million, but this is a preliminary figure. We won’t know exactly until July after the league conducts its audit. But it should land quite close to this initial projection.

Do the Pacers have any cap room this summer?

The only answer is … Maybe. As it stands now, the Pacers have no cap room this summer. But a lot would open up immediately if Roy Hibbert and/or David West leave this summer. Both have player options for one more season, Hibbert for $15.5 million and West for $12.6 million.

All of this is entirely out of the Pacers’ control, however.

So effectively, no, they have no cap room.

As it stands now, the Pacers have no cap room this summer. But a lot would open up immediately if Roy Hibbert and/or David West leave this summer.

Indiana already has eight players under contract for next season at a sum of roughy $64.1 million. And the remaining $3 million left beneath the projected $67.1 million cap is erased by myriad cap holds the Pacers have associated with their first-round draft pick, their current free agents (like Luis Scola, Rodney Stuckey, and Lavoy Allen), and incomplete roster charges.

What happens if Roy Hibbert and David West do not pick up their options?

Given both the market and where the two players are at in their careers, it is overwhelmingly likely that both Hibbert and West will exercise their options for next season. Neither is likely to find more money elsewhere.

However, should things get weird and both big men decide to test free agency, it would leave the Pacers with only five players under contract and about $26.0 million in available cap space.

Breaking it down (with cap-hold considerations), Hibbert leaving could create about $13.9 million in space, while West’s departure could free up roughly $11.0 million.

But don’t hold your breath.

Do the Pacers have any mechanisms to sign free agents?

The Pacers have two separate cap exceptions available to pursue free agents – the “non-taxpayer mid level exception” (worth $5.5 million) and the “bi-annual exception” ($2.1 million). Each of these can either be used to sign a single player, or they can be split to sign more than one player.

However, as you’ll see below, Indiana will need to to use all or part of one of these exceptions in order to retain one of their own free agents (Rodney Stuckey).

What about the Pacers’ own free agents?

Seven Indiana Pacers players — who collectively accounted for more than 40% of the team’s minutes, rebounds, and points — become free agents this summer.

The means available to re-sign them vary from player to player.

Rodney Stuckey
A “Plan B” signing last summer, Stuckey proved to be a welcome addition to the squad this season. Larry Bird has already seemingly identified re-signing the sixth man as a priority, but there will be some complications in that process. Since Stuckey was signed to a one-year, minimum-salary deal last season, the Pacers only have his “non-Bird rights.” This means Indiana can only (a) offer him a starting salary in a new deal of less than $1.5 million per year, or (b) offer more by using one of the two exceptions listed in the previous section. If the Pacers are really interested in keeping him, they’ll probably need to use all or part of their mid-level (starting as high as $5.5 million) to get the job done. Since Stuckey presumably wants to stay in Indiana, it is possible that the front office could convince him to stick around for the bi-annual exception figure ($2.1 million in the first year), but given how well he produced and the expected interest from other suitors, he will likely command closer a larger offer.

Luis Scola
Luis Scola is another player Bird has said he would like to bring back. And since the Pacers hold Scola’s “Bird rights,” they have far more flexibility. The only real limitation on re-signing Scola would be the luxury tax threshold — something the Pacers won’t exceed. But with about $17.5 million in space between current contracts and the luxury tax, it is not likely to be an issue. Therefore, it will just come down whether the two parties can agree on dollars and years that make sense for both.

Lavoy Allen, Donald Sloan
Both Lavoy Allen and Donald Sloan entered and ended the season as third-stringers, but each had productive stints when injuries created playing time for them. As with Luis Scola, the Pacers hold Allen’s “Bird rights” while they hold “early Bird rights” for Donald Sloan. However, since neither is likely to command much more than veteran minimum salaries, there are no practical salary cap obstacles to re-signing one or both. It will simply come down to whether it makes sense in each individual case.

Shayne Whittington
Shayne Whittington signed for the rookie minimum last summer and was essentially a non-factor last season. He did show a nice touch from the perimeter and a willingness to mix it up, but it’s hard to take much from his 42 shots in 108 minutes. Still, the little-used big man from Western Michigan reportedly has a big fan in Larry Bird and he was doing late-season stint to hone his game with Indiana’s D-League affiliate. So he’s likely to be back. The Pacers have only have “non-Bird Rights,” but as with Sloan and Allen, that’s unlikely to be a limiting factor a player seemingly destined for another minimum salary deal. (Whittington can be made a “restricted” free agent with a qualifying offer of just over $1.0 million, but there doesn’t seem to be a need for such a measure.)

C.J. Watson, Chris Copeland
Indiana holds “early Bird Rights” on both C.J. Watson and Chris Copeland, and the front office can, technically, make Cope a “restricted” free agent by offering $3.9 million. So the Pacers, technically, have ample ways in which to re-sign either or both. However, don’t expect either to return. Bird specifically cited injuries as the reason that Watson probably won’t be back. Copeland, meanwhile, never really fit in Vogel’s system, and that was before he was made redundant by the cheaper (and more effective) Damjan Rudez.

What about beyond this summer?

While the Pacers are relatively limited this summer (unless Hibbert and/or West unexpectedly opt out) they are poised to enter into a short term window of unprecedented flexibility in the near future.

Here’s why:

Capprojections /

According to the NBA, the salary cap is expected to climb by about $22 million in the summer of 2016. With Roy Hibbert and David West coming off the books, it’s possible that the Pacers could have salary cap room approaching $50 million.

In that regard, there will be very little risk that any move Larry Bird and Kevin Prichard makes over the next few months will significantly hamstring the team going forward. Well, at least in terms of salary cap. Bad decisions will still have negative consequences.

Also, this won’t necessarily make the Pacers a kid in a candy store. Many other teams will have a similar amount of cap space during the 2016 free agent frenzy, and all teams will be limited to being able to spend it on the available free agent pool. For a team like the Pacers, this could bring as many headaches as benefits.

[/pullquote]If the Pacers are really interested in keeping Stuckey, they’ll probably need to use all or part of their mid-level exception to get the job done.[/pullquote]

Still, one interesting thing is that this kind of cap growth will make trading far easier in the short term. With an abundance of cap room, there will be very few situations that will require salary matching. This exponentially expands the number of trade opportunities compared to normal years.

Final Bonus Question: Why does the cap jump to $108 million in 2017-18, then drop down to $100 million the following year?

Because of the huge increase in 2016-17, the league expects that the teams will be unable to increase their payroll fast enough to meet the 50%-51% BRI guarantee to the players in that season. When that happens, the CBA has a mechanism to inflate the cap calculation for the following year to allow the teams and players to catch up. Therefore, a large portion of the $19 million increase from next summer to the following summer is not associated with BRI for that upcoming season. Once that is completed, the cap will back in line with BRI projections.

However, this is probably a moot point. Both the players and the owners have the ability to opt out of the CBA in the summer of 2017, and one or both are expected to do so. This bubble will likely be smoothed out in the CBA that comes out of that summer.

Salary information compiled by Eric Pincus on Basketball Insiders and Larry Coon’s CBA FAQ were integral to this article.

Next: Paul George Donates $10,000 to Young Girl

More from 8 Points, 9 Seconds

Home/Pacers News

Analyzing the Indiana Pacers Payroll for 2015-16

By Tim Donahue | May 6, 2015