The Indiana Pacers are planning to sign their 38th overall pick, Braden Smith, to a two-way contract. Smith, a 23-year-old former Purdue guard, was selected Wednesday after the Pacers acquired the pick from the Chicago Bulls. This move allows Indiana to maintain financial flexibility, as two-way deals do not count against the salary cap or standard 15-man roster spots.
This decision is a direct response to Indiana's tight salary cap situation. The Pacers' total team salary is currently hovering near the projected luxury tax line for the upcoming season. By signing Smith to a two-way deal, which will pay him just over $679,000 for the 2026-27 season, the Pacers avoid adding a standard contract to their books. This strategic maneuvering keeps them further from the luxury tax. Smith averaged 14.3 points and 8.8 assists in his most recent college season. He also holds the NCAA Men's Division I record for career assists.
From a basketball perspective, putting Smith on a two-way deal is a smart, low-risk play for Indiana. Smith is an undeniable floor general, a player who dictates pace and makes everyone around him better, as evidenced by his NCAA assist record. Pacers General Manager Chad Buchanan highlighted Smith's intangibles, leadership, and high basketball IQ, noting his ability to create good shots for teammates. His court vision and passing prowess are elite. He won't be expected to immediately contribute significant minutes, which is perfectly fine for a team with an established point guard rotation. This allows Smith to develop his game with the Noblesville Boom, the Pacers' G League affiliate, without the pressure of a full NBA roster spot.
The wider context here points to the Pacers' ongoing commitment to maintaining financial flexibility while shoring up their point guard depth. General Manager Chad Buchanan explicitly stated the team's draft priorities were creating roster and cap flexibility and acquiring a two-way capable point guard, especially given their injury woes at the position in recent years. The trade to acquire Smith involved sending Kam Jones, along with draft assets and cash considerations, to Chicago. This move not only brought in a player they value but also cleared Jones' contract, further aiding their cap situation. The organization has historically utilized two-way contracts to cultivate ball-handling talent, and Smith fits that mold.
Looking ahead, Smith's immediate future involves splitting time between the Pacers and the Noblesville Boom, with a limit of 50 active games in the NBA and no playoff eligibility on his two-way deal. The Pacers are permitted to sign three players to two-way deals at the same time. While a standard contract conversion is possible down the line, the current arrangement provides both the team and Smith with developmental runway. The Pacers will continue to be opportunistic in free agency, prioritizing depth at wing and center.
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