Perhaps the most fascinating under-the-radar team to watch this offseason, the Indiana Pacers pivoted about as quickly as possible from one star era to the next last summer, when they traded Paul George to Oklahoma City for Victor Oladipo and Domantas Sabonis. Oladipo, who was thought of as overpaid on a four-year, $84 million extension signed with Oklahoma City in 2016, immediately reshaped his body and his game to emerge as the league’s Most Improved Player on his way to Third Team All-NBA Honors. All of a sudden, the contract once thought to be a slight liability on Indiana’s books is one of the best contracts in the league—Oladipo would easily fetch max money on the open market after the season he just turned in for the Pacers. Sabonis grew his game as well in his second season in the NBA, moving into a larger role than he had in Oklahoma City and increasing his efficiency across the board while mostly playing center, an opportunity not afforded to him in his rookie season with the Thunder. Less than a year removed from the trade that moved George away from Indiana, the Pacers ironically look like one of his best basketball destinations this summer, though the optics of returning to the team would be poor for a player of George’s stature.
There are still a few moving parts to settle before the Pacers’ offseason begins, which began in earnest on Tuesday, when the team declined the $4.4 million team option for Lance Stephenson. That move drew some raised eyebrows throughout the league but may give some indication to Indiana’s motivations for this summer—the Pacers can create more than $20 million in cap space after declining Stephenson’s option to continue to build around Oladipo and push toward the top of the Eastern Conference. Indiana’s offseason will become clearer in the coming days, as the deadline for Thaddeus Young’s player option approaches, as well as deadlines for the partially-guaranteed contracts for Bojan Bogdanovic, Al Jefferson, and Darren Collison. Young was expected to opt in to his $13.8 million for 2018-19, but there has been some pushback on that idea in the last few weeks, as he’s rumored to be seeking a longer-term deal, whether in Indiana or elsewhere. From a financial perspective, he would likely be better off opting in for the $13.8 million and using another season in Indiana to continue to build his value before hitting free agency in 2019, at which point more teams will have the cap space to give him the longer contract he seeks.
Bogdanovic and Collison are keepers on their contracts, but Jefferson is not long for the Pacers, whether he’s traded or cut. Due to a quirk in the changeover from the 2011 Collective Bargaining Agreement to the 2017 version, only players who were signed to their contracts under the previous agreement count at their full contract value in trades, no matter how much of that contract is guaranteed. This loophole was used for years by teams looking to trade for high-salaried players without sending “real” salary back, since the receiving team can cut the non- or partially-guaranteed player for a much lower value than his actual value in the trade, but was closed in the 2017 CBA for any contracts beginning 7/1/2017 or later. Jefferson was signed to his current deal the year before, which means any team who trades for him in the 2018-19 league year can use his full $10 million salary as his incoming value in a trade but can immediately waive him and pay just $4 million. Likewise, Indiana can use his contract to trade for someone making up to $15 million, despite his small guarantee. Teams with 2018-19 cap space or a trade exception totaling at least $10 million will be the targets for Kevin Pritchard and his staff, as those teams will be able to absorb Jefferson’s full salary before waiving him. This move would save the Pacers $4 million in cap space they’d otherwise have to give to Jefferson and would be worth a small asset (a second-rounder, perhaps) to move that money to a rebuilding team.
Removing Jefferson from their 2018-19 books would give the Pacers $21.4 million in cap space, with another $13.8 million available if Young opts out and seeks a new home in free agency, enough to be serious contenders for max players, especially in restricted free agency, as those younger players would fit their squad’s timeline. Indiana could be legitimate options for power forwards Aaron Gordon or Julius Randle, both of whom will want $20 million per year but might find the market colder than that. Zach LaVine could be an interesting option at the right price, as would Marcus Smart, who would add another playmaker and high-end defender to the Pacers’ stable of wings. On the unrestricted market, players like Avery Bradley or Kentavious Caldwell-Pope would give Oladipo a high-end backcourt partner, while smaller names like Aron Baynes, Jerami Grant, or Wayne Ellington would give them a bit more depth off the bench.
Playing the long game with a few small one-year signings this year might also be a strong consideration for the Pacers, depending how they feel about Myles Turner, who is about to begin the final year of his rookie-scale contract. If they see him as their center of the future and are willing to give him a large contract to prove it, then it would behoove them to hold off on an extension and hit 2019 free agency with an extra $10+ million in cap space, due to Turner’s $10.2 million cap hold and their ability to re-sign him even if they’re over the cap, using his full Bird rights. With just Oladipo signed up on a non-rookie-scale deal for 2019 and beyond, there’s a particularly strong path to Indiana opening two max slots in 2019 while already having a star player under contract, a very rare circumstance throughout the league. If they strike out on their top targets this offseason, rolling their money over to 2019 would be the next-best move. The 2019 free agent class looks to be much, much stronger than 2018, with names like Kyrie Irving, Jimmy Butler, Kawhi Leonard, and Kemba Walker all hitting unrestricted free agency, as well as slightly older options in Al Horford, Marc Gasol, and Kevin Love. Nabbing a player or two from that first group would immediately put Indiana in the conversation with Boston and Philadelphia as the best teams in Eastern Conference. While there will be more teams with cap space next summer to court these superstars, none of them have double-max space and a star player already under contract, as the Pacers have in Oladipo.
Following a surprise year from the team and Oladipo specifically, the Pacers are now set up extremely well to be as active in free agency as they would like this year, or they can bide their time in the hopes of targeting a bigger name in 2019. With so few bad contracts and a superstar already on the roster, the possibilities are endless for Pritchard and his staff.