Indiana Pacers secure more certainty through cap relief with Victor Oladipo insurance

Not much is certain in the NBA these days. The Indiana Pacers lucked out with some cap relief through insurance on Victor Oladipo, who has missed much of the season due to injury.

Going into the offseason, certainty will be a luxury few teams can cling to. The Indiana Pacers, in part due to luck and perfect timing, will have more certainty than most.

First, provided the league calendar isn’t upended and switched around due to the league suspension, will be the draft. The Pacers forfeited their first-round pick and have certainty in their developmental priorities next season by way of Goga Bitadze.

And now to close the year the Pacers will come in well below the luxury tax and have strong financials heading into next year. Their books weren’t strained to start (part of that is due to their best player of the year only making $3.5 million, Sabonis’ $77 million extension doesn’t begin until next year) but now an insurance claim on Victor Oladipo’s contract of $10 million brings them from $114 million to $104, according to IndyStar.

This makes the Pacers the second-lowest team in terms of total payroll in the league, which is impressive considering normally competitive teams have to pay out quite a bit of cash, often dipping into the luxury tax.

To have a team with this amount of talent be that low is a clear example of how smart Kevin Pritchard and the Pacers front office has been when making trades, securing contracts, and building a winner.

Here’s a look at how the playoff competitors above the Pacers in the East look in terms of payroll:

• Bucks: $135 million
• Raptors: $123 million
• Celtics: $140 million
• Heat: $134 million

What stands out, though, is that each of these teams has a considerable amount salary coming off the books this summer.

Milwaukee has Kyle Korver, Pat Connaughton, Sterling Brown, and Marvin Williams hitting free agency.

Toronto has Marc Gasol, Serge Ibaka, Fred VanVleet and Rondae Hollis-Jefferson set to hit the open market.

Boston has Gordon Hayward and Enes Kanter with player options, but both seem likely to pick those up with available money likely to be low this summer with the cap slated to take a downturn.

Miami will see Goran Dragic, Meyers Leonard, Jae Crowder, and Derrick Jones Jr. set free.

Many of these teams may re-sign these players to new deals, but the Pacers are advantaged no matter how you look at it. Justin Holiday and JaKarr Sampson are the two biggest names coming off the books this summer. Their core is secure, and a fair amount of their role player pieces are as well.

Normally having a salary coming off the books can be advantageous. It gives room for teams to secure the players they want to make a run at a title for the next season. This year, things are different.

The salary cap is directly determined by the amount of basketball-related income that the league generates throughout the previous season. With the league sandwiched between a China controversy that cut off revenue from streams and game broadcasts overseas at the start of the season and a potentially canceled or modified season that will reduce ticketing and broadcasting revenue, it’s likely the $115 million projection comes in far lower.

That means less available money for players, which means securing long-term deals that allow teams to create a solid winner will be more difficult. Going into this offseason, having your core on the books already is a massive advantage. Having contracts that come off the books this summer really doesn’t help nearly as much as it did in previous seasons because the spendable money is determined by how high the cap is.

Oladipo’s insurance claim helps, but the front office was prescient in the kind of contracts they sought out and how they crafted the roster. No one could have seen a pandemic coming and gripping the league this tightly, but the Pacers were meticulous and it will pay off for them moving forward into a time of uncertainty.