Pacers Land Pascal Siakam With Creative Salary Cap Maneuver

The Indiana Pacers made a blockbuster trade to acquire Pascal Siakam from the Toronto Raptors. To pull it off, the Pacers sent the Raptors three future first-round draft picks — a significant price, but a worthy one for a two-time All-NBA forward.

Siakam is averaging 22.2 points, 6.3 rebounds, and 4.9 assists per game this season. Those numbers are only matched or exceeded by seven other players in the league right now — Joel Embiid, Luka Doncic, Giannis Antetokounmpo, Kevin Durant, Nikola Jokic, LeBron James, and Paolo Banchero. The now-Pacers forward is a terrific talent and should be a snug fit on his new team.

“Super excited,” Siakam said of being with the Pacers. He should pair extremely well with Indiana’s star point guard, Tyrese Haliburton.

What Happened

To pull off the trade with Toronto, the Pacers got creative with the salary cap. Siakam’s deal this season nets him nearly $38 million, so the blue and gold had to send out multiple contacts to legally acquire the star forward. But it didn’t end up being that straightforward.

The players on Indiana’s roster Wednesday morning that were sent to the Raptors in the trade were Jordan Nwora and Bruce Brown, who combined to carry a cap hit of $25 million. But that wasn’t enough to get a transaction done. The Pacers needed to send out more money to complete the trade.

Their President of Basketball Operations, Kevin Pritchard, entered the day with just over $8.2 million in maximum salary cap space, so in theory, Indiana could have sent out $29.7 million in salaries and taken Siakam into their cap room. But even then, sending out just Nwora and Brown would not be enough money. The Pacers needed to include another player.

The tricky part was identifying who that player should be. If the player made too much money, the Raptors would have to be luxury tax-conscious for the rest of this season. If the next contract included was too small, it wouldn’t be enough to complete the trade. In the middle is a group of players on the Pacers roster who are young and talented, and the blue and gold presumably wanted to keep them.

So what did Pritchard and his front office do? They turned to the New Orleans Pelicans for help.

Wednesday morning, the Pelicans were over the luxury tax line. They needed to shed roughly $3 million in salaries to get below that line and not pay a tax bill at the end of the season. Their front office had time to figure out how to clear the salary from their books, but a convenient opportunity appeared with the Pacers.

To open the day yesterday, every New Orleans player who makes above $3 million was too valuable to simply give away. Except for one. Kira Lewis Jr, the 13th overall pick in the 2020 NBA Draft, is signed to a $5.7 million expiring contract and was outside of the rotation for the Pelicans. Due to injuries and team depth, the former lottery pick has just 64 appearances since the start of the 2021-22 campaign.

Indiana needed to add $5.14 million to their Siakam trade package. The NBA’s new collective bargaining agreement (CBA) dictates that a team can receive 125% of their outgoing salary plus $250 thousand in a trade. At Siakam’s cap hit, that meant Indiana needed to send out $30.1 million if they weren’t going to take the forward into cap space.

To get that $5.14 million salary into the fold, the Pacers and Pelicans agreed on a trade that sent Lewis Jr to Indiana. Indiana didn’t necessarily want Lewis Jr, they just wanted his contract, and New Orleans was incentivized by the luxury tax to dump his money. In order to make it worth it for Indiana to take on Lewis Jr’s deal, the Pelicans sent the Pacers a 2024 second-round pick. New Orleans got $110 thousand in cash considerations from Indiana to complete the transaction.

Indiana didn’t need to send out any players in the deal with the Pelicans because Lewis Jr’s contract fit into the team’s available cap space. All Indiana had to do was open a roster spot, which they did by waiving James Johnson, who recently had his contract become fully guaranteed. Suddenly, Lewis Jr was a Pacer, and the blue and gold had the salaries they needed to complete the Siakam trade.

Now, the Pacers could complete the final step. There is a CBA rule that dictates a player’s salary cannot be re-aggregated in trades for two months if they are acquired using an exception, but since Indiana used salary cap room to add Lewis Jr, they were free to re-aggregate his money instantly.

That’s what they did. Brown, Nwora, and Lewis Jr cobbled together carry a $30.7 figure in outgoing salary for the Pacers, which was $600k more than the minimum they had to send Toronto to acquire Siakam. That made it all work. Now, the All-Star forward is on Indiana’s roster, and they acquired a second-round pick from New Orleans for their troubles.

“We’re incredibly excited to welcome Pascal to Indiana,” Pritchard shared in a statement. “As a two-time All-NBA selection and two-time NBA All-Star, Pascal is a player that our organization has long admired and respected. We feel that his unique offensive skillset will complement our style of play, while his defensive versatility will be a valuable asset to our team.”

The Pacers’ Trade Helped Other Teams

It was a creative use of cap room by the Pacers, who are now over the cap and won’t have space for the foreseeable future. They can sign players to minimum contracts and use the room exception for the rest of the ongoing season.

That creativity helped Indiana land Pascal Siakam, and it helped several teams accomplish their goals. Toronto didn’t take back much, if any, long-term salary in the deal and netted three first-round draft picks. They may be able to get value for Brown in another trade, and Nwora and Lewis Jr are both young and worth a look down the stretch of this campaign.

The Pelicans ducked under the luxury tax line and didn’t have to pay much in terms of assets to do it. They can now be confident in their planning for the rest of the season when it comes to their transactions.

And the Pacers, of course, landed the prize of Pascal Siakam. Their cap space helped it all happen, and they are a much better team for it.