The Indiana Pacers roster makes sense, at least on paper, as the end of July approaches. Their free agency moves, especially ones concerning standard contracts, could be finished for the 2026 offseason.

But that is not definite. And that the Pacers still have their lone 2026 NBA Draft pick unsigned suggests their front office is still considering how to finalize the back end of its roster. Braden Smith, the Pacers selection with the 38th overall pick in June, is one of 11 draft picks as of this writing who has not yet signed a contract for the coming season.

Only one player selected above Smith, the injured Richie Saunders of the Memphis Grizzlies (who will need to clear roster spots), has not yet inked a contract. Smith is in a unique spot, and the Pacers current salary cap reality appears to be a factor.

After Quenton Jackson saw his contract become fully guaranteed for the Pacers earlier this month, the team has 14 players signed to fully-guaranteed deals. Their total team salary, plus incentives, is about $206.8 million. They are hard capped at the first salary cap apron after using the Non-Taxpayer Mid-Level Exception to sign Kelly Oubre early in free agency, so the Pacers’ total team salary plus incentives cannot cross $209.015 million for any reason during the 2026-27 campaign.

The quick math: The Pacers are $2.23 million below the first apron. A veteran’s minimum contract – the lowest possible salary for a player with two-plus years of service signed during the offseason – comes with a cap hit of $2.45 million. Since that number is larger than Indiana’s first apron space, they are not able to add a player using a veteran’s minimum deal right now.

Teams can carry 15 players on standard contracts in the regular season, so the Pacers do have one open roster spot. But they can currently only afford to add a player with zero or one years of service in that spot and can’t add a veteran until November 5 – after the season, and training camp, has started.

Who could be in the mix for a contract with the Pacers?

Smith has zero years of service, meaning he technically could sign a standard contract with the Pacers right now. His minimum salary could go as low as $1.27 million for the coming campaign. But the Pacers reportedly agreed to a two-way contract with Smith just after the draft, complicating matters.

Plans can change, and the Pacers could alter course if it gives the team more options. That’s where things get more complicated. Since the start of the free agency period, Indiana has signed Jalen Slawson and Kobe Brown to two-way contracts, and teams are permitted to have up to three players under two-way pacts at the same time.

That’s where Ethan Thompson enters the picture. Thompson, 27, signed a two-year, two-way contract with the Pacers in November of 2025. So he is currently the Pacers third and final two-way contract player – meaning that technically, as of this writing, there is no two-way opening for Smith.

Thompson did not play in Summer League for the Pacers, instead spending his early July with the Puerto Rican National Team for FIBA World Cup qualifying play. He averaged 15.5 points and 4.0 assists per game, often proving to be his team’s best player. He knocked down exactly half of his shot attempts.

Smith, meanwhile, did play in Summer League for the Pacers. He struggled to make shots, shooting just 26.5% from the field while averaging 6.8 points per game, but he was top five in assists and averaged seven per contest during summer league play. He had a major adjustment from college to the Pacers in terms of play style.

Waiving a two-way contract player comes with little penalty and no cap hit, so the Pacers could opt to waive Thompson (or Brown/Slawson, but their more recent contracts suggest they are safe) and sign Smith to a two-way deal, as originally planned. Doing so would keep their 15th roster spot open, a fine option given the team’s lack of flexibility. But they would likely have less players under contract by following this route, and they would lose Thompson – who has two years of service.

That could be what Pacers brass is juggling: Can they keep both Smith and Thompson? Financially, yes they can, and keeping two players instead of just one sounds better. But signing Smith (or any player with zero or one years of service) to a standard contract eats into the team’s first apron flexibility while also increasing their luxury tax bill for little on-court benefit.

“We’re very, very tight to the first apron where we’re hard capped now,” Pacers general manager Chad Buchanan said on the Setting The Pace podcast this month. “We have different options to fill in that 15th [roster] spot. We’re still kind of making that decision, working through some choices at the back end of the roster at the 15th spot [and] with the two-way spots.”

The alternative to keeping both players would be waiving Thompson, then signing Smith to a two-way contract via the slot Thompson vacated. Thompson was excellent in the G League last season, averaging 26.9 points per game, and appeared in 32 games for the Pacers.

It’s not an easy call for the Pacers. Flexibility can be a buzzword by NBA decision makers – but given Indiana’s proximity to the first apron, they have real flexibility tradeoffs to consider with their 15th roster spot. Smith and Thompson are the most obvious two characters, but more could be in play.

“We like Braden. Haven’t decided exactly what we’re going to do yet. We’re still kind of working through that decision-making process because we have several guys that we like and we want to keep,” Buchanan said. “And so [we’re] trying to figure out what’s the best avenue to keep all those guys in play for us.”

It isn’t clear if filling their 15th roster spot is the right choice for the Pacers. They could opt to add anyone with zero or one year of NBA service time and have no real deadline to make a decision, though prior to training camp is a soft deadline. And Smith would surely hope to officially sign a contract as soon as possible. Once this is sorted out, the team’s roster will feel mostly set for the coming campaign.