For two decades, the Indiana Pacers have steered clear of the NBA’s luxury tax line like it’s radioactive. But if they’re serious about building a long-term contender, that frugal philosophy might need a serious rethink.
This past offseason brought the issue into sharp focus. Myles Turner, a homegrown anchor for years, hit free agency.
There was plenty of buzz about whether Indiana would pay up to keep him. In the end, Turner signed a four-year, $108.9 million deal with the Milwaukee Bucks.
The Pacers, once again, stayed under the tax line-and lost a key piece in the process.
Now, with the luxury tax still looming like a financial boogeyman, Indiana faces another critical crossroads. According to Spotrac, the Pacers are about $5.8 million below the tax threshold this season.
If they stand pat at the trade deadline, they’ll likely dodge the tax for another year. But that cushion could disappear quickly, especially when the offseason rolls around.
The Bennedict Mathurin Dilemma
One of the biggest decisions on the horizon centers around Bennedict Mathurin. The Pacers didn’t offer him a rookie-scale extension last offseason, which means he’s set to hit restricted free agency this summer. That opens up two paths: trade him now and avoid the payday, or commit to a new deal that could push Indiana into luxury tax territory.
Here’s the thing-Mathurin isn’t just another young player. He’s a high-upside wing with the kind of scoring punch and athleticism that’s tough to find and even harder to replace. Moving on from him now would be a gamble, especially if the Pacers see themselves as a team with real playoff ambitions in the near future.
But re-signing him won’t come cheap. And once those numbers hit the books, Indiana’s careful cap management strategy starts to get a lot more complicated.
Looking Ahead: A Core That’s About to Get Expensive
The Pacers’ long-term payroll picture is relatively clean-for now. Only Tyrese Haliburton and Aaron Nesmith are locked in beyond the 2027-28 season, and even that’s assuming the team picks up options on T.J.
McConnell and Kam Jones. Everyone else, including key contributors like Pascal Siakam, Andrew Nembhard, and Obi Toppin, will need new deals before then.
That’s not even accounting for future draft picks or potential free agent signings. If Indiana lands a high lottery pick this year, that’s another salary slot to manage. If they make a move for a win-now veteran, that’s more money on the books.
In theory, the Pacers could thread the needle-retain their core, keep adding talent, and still avoid the tax. But that’s a tightrope walk, and one misstep could cost them a shot at building something special.
The Bigger Picture: What Do the Pacers Want to Be?
This is about more than just numbers on a spreadsheet. It’s about identity.
The Pacers have built something intriguing: a young, dynamic roster with a rising star in Haliburton, complementary pieces that fit, and a front office that’s shown it can draft and develop. But the next step-turning promise into playoff success-might require a willingness to spend like a contender.
Staying under the tax has its benefits. Flexibility, sustainability, financial breathing room. But at some point, if you want to win big, you have to be willing to pay big.
The Pacers don’t have to break the bank tomorrow. But they do need to start asking themselves the hard questions now. Because the longer they wait, the more expensive the answers might get.