The Pacers’ two-way squeeze has finally opened up, and it looks like Braden Smith is headed for an NBA roster one way or another.
Guard Ethan Thompson is reportedly close to leaving Indiana for Serbia, with the Serbian publication Nova.rs reporting that he is nearing a deal with Partizan Belgrade. A league source confirmed that report to IndyStar on Thursday, and said the Pacers should be wrapping up the rest of their roster soon.
Thompson’s exit clears the crowded picture around Indiana’s two-way spots. The Pacers now have a two-way contract and a standard contract available, which gives them room to sign Smith either way.
Smith, the Purdue All-American point guard, Westfield High School standout and 2022 Indiana Mr. Basketball, was the No. 38 pick in the draft after Indiana traded with the Bulls.
He was originally told he would be on a two-way deal, but the numbers got tight fast. Indiana already had four players competing for three two-way openings, then added forward Kobe Brown, who spent last season on a standard contract, to a two-way deal.
That created a five-man battle for three jobs before the Pacers re-signed forward Jalen Slawson, waived guard Taelon Peter and now lost Thompson.
The Pacers can still place Smith on a standard contract if they want, though it would have to be at the rookie minimum. Indiana has about $206.8 million in allocated salary for the 2026-27 season, which is well above the salary cap and luxury tax line and about $2.2 million below the first luxury tax apron.
Because the Pacers are hard-capped at that apron after signing forward Kelly Oubre Jr. with the non-taxpayer mid-level exception, they can’t use a veteran minimum deal, which counts at $2.4 million against the cap. The rookie minimum is about $1.4 million, so Smith would fit there.
If Indiana signs him to a standard contract, it would then have room to add another player on a two-way deal.
Thompson’s move would end a Pacers run that began late last November, when Indiana signed him to a two-way deal amid a wave of backcourt injuries. The Oregon State guard, a first-team All-Pac 12 selection, had spent his first four pro seasons entirely in the G League before that opportunity.
Last season, he appeared in 32 games for the Pacers and averaged 7.0 points per game. He also played eight games for the Noblesville Boom, putting up 26.9 points, 6.9 rebounds and 5.6 assists per game.
Across 202 career G League games, he has averaged 18.4 points per game. He did not play for Indiana in Summer League, but he did take part in World Cup qualifying with Puerto Rico.
Smith arrives with a decorated college résumé of his own. He was twice a first-team All-America selection at Purdue and finished as the all-time assists leader in NCAA Division I history with 1,103, passing Bobby Hurley’s mark of 1,076. He helped the Boilermakers reach the NCAA title game in 2024, where they lost to Connecticut, and that run marked Purdue’s first Final Four appearance since 1980.
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