How The Indiana Pacers Used Their Salary Cap Space To Acquire Assets

The Indiana Pacers trade deadline execution was both simple and complicated.

It was simple in that they added useful pieces and gave away little to do so. The Pacers walked away with George Hill, Jordan Nwora, and three second-round draft picks from the Milwaukee Bucks and gave away just the draft rights to Juan Pablo Vaulet to make it all happen. The big picture, and the takeaway for the Pacers at the deadline — they got something for nothing.

Underneath the hood, the deal was more complicated. The Pacers also received Serge Ibaka from the Bucks, but they had little use for the veteran big man. Additionally, to take in three players and send away zero, Indiana had to clear three roster spots, so Terry Taylor, Goga Bitadze, and James Johnson were waived.

On top of some cash considerations received, the full circumstance ended with the Pacers waiving Bitadze, Taylor, and Johnson to acquire Ibaka, Hill, Nwora, three draft picks, and cash. Ibaka was waived by the Pacers soon after, and Johnson was re-signed. So while Indiana walked away from the trade with two players of value and draft capital, they had to jump through some hoops to do it.

It was a smart trade, though, and one that was made possible because the Pacers had salary cap space. After extending the contract of Myles Turner, the blue and gold had about $8.87 million in cap space to work with, and it facilitated this deal — Hill, Nwora, and Ibaka have a combined cap hit of $8.84 million this season. The blue and gold could take them in without sending any matching salary to Milwaukee.

“We really wanted to… [use] our cap space the most efficient way we possibly could so we could get some more, we call it dry powder, or assets, or whatever you want to call it,” Pacers President of Basketball Operations Kevin Prtichard explained. “And we were able to get three second-round picks with [cap space].”

The Pacers made calls on bigger trades prior to using their space to acquire draft picks, but in the end, they still made savvy moves. The number of second round picks moved became the story of the trade deadline this year, and the blue and gold got three of them.

The three second round picks acquired by Indiana are the Bucks best second round pick this season (which will either be Cleveland’s, Golden State’s, or Milwaukee’s), the Bucks 2024 second round pick unprotected, and the Pacers own 2025 second round pick unprotected. Indiana originally sent that selection to Milwaukee in the Malcolm Brogdon sign-and-trade a few years ago, and they got it back in this deal.

Johnson was re-signed to a minimum contract, which does not require cap space or a salary cap exception, so the Pacers were free to do so after moving on from Ibaka. Johnson’s cap hit for the rest of the season is $590k.

Hill, Ibaka, and Johnson all had contracts that expired at the end of this season, so there are no long-term salary concerns for the Pacers with those three. Nwora will make at least $3 million in 2023-24, but he is young and talented, so the Pacers were comfortable taking him in. They tried to acquire him in the past.

“Nwora is a guy that we’ve had interest in for the last couple of years,” Pacers head coach Rick Carlisle said just after the trade deadline. So far, the 24-year old forward is averaging 7.8 points per game in four appearances with Indiana.

By taking on short-term salaries and a useful young player, it’s fair to assess the Pacers trade deadline plan as simply buying second-round draft picks, and getting Nwora at the same time. Since 66% of the season had passed by the time the trade deadline came, the blue and gold only pay out the final 34% of the salaries to the three players they acquired from Milwaukee, which equates to almost exactly $3 million this campaign. Combine that with the extra money being paid to Johnson (just under $600k), and Nwora’s remaining salary next season ($3 million) and the Pacers essentially bought three second round picks for $6.6 million.

That’s already fairly cheap. But they also get the value of Nwora and Hill as players on top of that, and they also got cash considerations from the Nets. It was extremely smart business by Indiana.

This view of Indiana’s trade deadline maneuver fails to account for the actual value added by Johnson, and it assumes that the salaries of the waived players (Bitadze and Taylor) are sunk costs.

The Indiana Pacers exited the trade deadline with useful on-court additions and draft assets. They gave up very little to do it and sacrificed minimal long-term flexibility. It was a simple move made possible by the asset of salary cap space, and the organization used its assets well at the deadline.