The Challenges The Indiana Pacers Face In Keeping Jalen Smith

Center Jalen Smith played the best basketball of his career for the Indiana Pacers this past season, and that might actually end up being a problem for the Pacers franchise.

Smith was acquired by Indiana in a deal at the trade deadline back in February — the Pacers sent away Torrey Craig when they received Smith and draft compensation from the Phoenix Suns in a financially-motivated move. The trade was a win for everyone — the Pacers, the Suns, Craig, and Smith.

Smith was a winner because he went to an Indiana team that was far more focused on developing young players than his previous squad in Phoenix. During his first season-and-a-half with the Suns, there were just 18 times in which Smith played more than ten minutes in a game. With the Pacers in under two months, that occurred 22 times. The Pacers had more opportunities for the young big, which was beneficial for his growth.

“I view this as a new beginning,” Smith said after being traded. “Taking everything I learned from Phoenix and just trying to bring it over here and help in the best way I can.”

The University of Maryland product made the most of the increase in minutes. His numbers with the Pacers skyrocketed — he averaged 13.4 points, 7.6 rebounds, and 1.0 blocks per game and shot well from both inside and outside the three-point arc. He stepped up his game in every way with the blue and gold and showed why he was the tenth overall pick in the 2020 draft.

Those numbers contributed to winning basketball, at least to some extent. Indiana had a better net rating with Smith on the floor (-1.9) than off (-3.9) this campaign, and their team offense numbers were tremendous when the young frontcourt player was in the game. Smith proved to be a valuable player in Indianapolis, which makes his upcoming free agency period fascinating.

Smith’s contract expired at the end of the 2021-22 season, and given his age and his production with the Pacers, many teams, Indiana included, will want to sign him to a new deal. But for the Pacers, the team that gave Smith the opportunity to show what he can do, it won’t be easy to retain the 21-year old this summer.

That’s because of something that happened while Smith was still in Phoenix. The Suns drafted Smith tenth overall in the first round of the 2020 NBA Draft, which meant the big man put ink on a rookie scale contract that all first round picks sign when they enter the association.

A unique part of rookie scale contracts is that they have team options on the final two years of the agreement, and that team option decision occurs a full season in advance. That meant the Suns had to determine if they wanted to pick up Smith’s third year option after his rookie campaign. But after an underwhelming first season for the young big, the Suns prioritized future savings and declined the $4.67 million third year option.

As a result, Smith will be an unrestricted free agent when July 1 rolls around, meaning 29 teams can offer him any contract they want. But there’s a catch that impacts what contract the Pacers can extend the big man in free agency.

If a player has their third year and/or fourth year team option declined on a rookie scale contract, then their incumbent team can only offer them up to the amount of money they would have made on their rookie scale deal in their third/fourth season on a new contract. This is to prevent teams from intentionally declining rookie scale options in order to give young players a huge raise while they still have team control as leverage.

In this case, even though the Pacers were not the team that declined Smith’s team option, they are still his incumbent team at the conclusion of his second season on his rookie scale deal. That means Indiana is limited in what they can offer Jalen Smith in free agency this summer — he cannot make more than $4.67 million with the blue and gold in 2022-23 and can’t be paid more than $5.95 million (the amount his fourth-year option would have been worth) from the franchise in 2023-24. Any other team in the NBA can offer Smith whatever they desire.

Thus, the Pacers are met with a challenge. The most they can offer Smith over the next two seasons is just a bit over $10.6 million, which is likely below his market value, and even offering him that much requires a string of one year deals. It will be difficult for the organization to retain his services.

“It’s just a huge offseason,” Smith said of his free agency. “Scary offseason as well, because as a young player, you don’t want to make the wrong decision.”

In theory, the best offer the Pacers could extend to Smith would include a player option. So it would be a two-year deal worth that $10.6 million figure, but the big man could opt out of the deal after one year and enter free agency again. At such a young age, that may be appealing to the center with an up-and-down career so far.

Just looking at Smith’s tenure with the Pacers would make it appear as if he was a lock to get much more than $4.76 million from a team this offseason. His points per game, rebounds per game, and three-point shooting percentage numbers with Indiana, in tandem, were only matched by three players over the course of the entire season — Karl-Anthony Towns, Bobby Portis, and Christian Wood. The average salary of that trio is over $17 million next season.

But when including Smith’s production in Phoenix, which wasn’t nearly as strong and featured inconsistent play, it seems more plausible that he may not be worth too much more than the dollar figure the Pacers can offer. As a former top-ten pick with tons of potential, Smith could still fetch a large deal, but his varying impact for two different teams makes it far from a lock.

Still, the Pacers have some steps they could take to maximize their chances of retaining the two-year pro this offseason. One of them is offering Smith a chance to play and contribute this coming year, as Smith noted that opportunity will play a role in his free agency decision making process.

“It’s going to be very important,” he said when asked how much he will consider fit and opportunity when picking his permanent home. From a fit perspective, Smith showed that he and Indiana are a good match in the final 22 games of 2021-22. But the opportunity part of that is more complicated.

Indiana has Isaiah Jackson, Myles Turner, and Goga Bitadze under contract at the center position next season. If all three return to the blue and gold, there likely won’t be many frontcourt minutes available in head coach Rick Carlisle’s rotation, which would not help Smith grow in his career. Without making moves to clear up some playing time, Smith may choose a different team instead of the Pacers this offseason, even if the $4.67 million dollar figure does end up being enough money to retain his talents.

And if the Maryland product does return to the team from the Circle City, then the Pacers will have the same considerations next offseason, but with a contract limit of $5.95 million. There are many factors at play that work against Indiana, but if they are willing to make some moves and promise some minutes, they have an outside shot to keep Smith in town.

“This offseason is going to come down to a lot of things,” Smith said of his free agency. He noted that conversations with his family and representation will be very important in his decision making. If the Indiana Pacers are going to be a consideration in that decision, they will have to find a way to convince Smith to stay despite contract limitations. If they are willing to make some sacrifices, perhaps they could keep the young big man, but given how well he played down the stretch of last season, he may have priced himself out of the franchise’s constraints already.