INDIANAPOLIS, INDIANA – OCTOBER 21: Keldon Johnson #3 of the San Antonio Spurs and Chris Duarte #3 … More
INDIANAPOLIS – The Indiana Pacers have agreed to a trade with the San Antonio Spurs that will net the Pacers the 38th pick during the second round of the upcoming NBA Draft.
The full trade, as has been reported by many, has the Pacers receiving that second rounder in exchange for a future second-round pick and cash considerations. The future compensation going to the Spurs is a 2030 second-round selection that originally belonged to the Sacramento Kings – Indiana acquired that pick in a 2023 deal that sent wing Chris Duarte to Sacramento.
San Antonio has two lottery picks and up to 12 players under contract for next season already. Their need for an early second-round pick in the 2025 NBA Draft is fairly low. The Pacers, meanwhile, could use such a selection for multiple reasons – and sending away a distant future second rounder for immediate gain is a trade worth making.
Why did the Pacers make this trade with the Spurs?
For Indiana, one benefit of this deal comes because of their salary structure. As laid out in this draft preview, the Pacers are in a tricky financial reality after Tyrese Haliburton was injured during Game 7 of the NBA Finals. They are likely going to be over, or at least approaching, the luxury tax threshold in the 2025-26 season despite having less overall talent than a year ago.
As a result, finding cheap talent is important for the blue and gold. And rookies picked in the second round of the NBA draft are subject to a lower minimum salary than veterans who have been in the NBA for multiple years. Because first-year players can be cheaper, they are more valuable for the Pacers and their potentially tight payroll.
Prior to this trade, the Pacers only second-round pick was the 54th overall selection. While they could have simply signed a player chosen that late to a standard contract, most draft prospects taken that deep in the draft sign two-way deals – in fact, since the installment of two-way contracts, every 54th overall pick has inked one in their first season.
Kevin Pritchard, left, walks to the podium as Larry Bird leaves after speaking during a news … More
Now, the Pacers have options. They could opt to take a player with the 38th overall pick and use the second-round pick exception – a new salary cap exception added in the 2023 NBA Collective Bargaining Agreement – to sign them to a multi-year contract that starts at a low salary. That’s exactly what they did last season when agreeing to terms with 35th overall pick Johnny Furphy, who was added on a four-year, $8.6 million deal.
In 2022, the Pacers took guard Andrew Nembhard with the 31st overall selection and signed him to a four-year contract as well. Both Nembhard and Furphy had a low salary during the early years of their contracts, and that is now an option for the Pacers again with pick number 38. Adding a player on a cheaper rookie deal instead of a veteran could be valuable for the Pacers as they manage their spending with regards to the luxury tax line. Flexibility is key.
Another possibility for Indiana is using the 38th pick to move up even further in the draft. For example, in 2021 the current Pacers front office regime packaged young guard Aaron Holiday and the 31st overall selection and sent them to the Washington Wizards and received pick number 22. That’s a nine spot difference, but moving from the early second round into the late first round was beneficial for the Pacers, and they were willing to send out a young piece to do it. Perhaps pick 38 could be packaged with a younger Pacers player if they want to move up and add another player on a rookie-scale deal in the first round. Such a trade would come with some amount of savings for Indiana, though the exact amount can’t be calculated without knowing which players are sent out or what pick is acquired.
Recent history has shown the Pacers do many things in the early part of the second round, and many of those moves have been successful. Now, as they pivot a bit heading into the 2025-26 season, the team has another pick in that range. The flexibility and salary benefits it provides made it savvy for the Pacers to send away future draft compensation and cash considerations to get the deal done.
