INDIANAPOLIS – The Indiana Pacers have selected former Purdue guard Braden Smith with the 38th pick in the NBA Draft. This acquisition was facilitated through a draft-night trade with the Chicago Bulls.
Smith, who will celebrate his 23rd birthday later this month, completed his four-year collegiate career with the Boilermakers. He holds the NCAA Men’s Division I record for career assists and recorded averages of 14.3 points and 8.8 assists per game during his final season. Smith’s exceptional passing ability and intangible contributions were key factors in his selection by Indiana.
Early second-round draft picks like Smith offer significant contractual advantages for NBA teams. They can begin their careers with a lower salary while potentially signing longer-term deals, providing a financial benefit to the drafting franchise. However, the Pacers, whose total team salary is nearing the projected luxury tax threshold for the upcoming season, are currently planning to sign Smith to a two-way contract.
Players on two-way contracts typically split their time between their NBA team and its G League affiliate, which for the Pacers is the Noblesville Boost. While these contracts offer increased development opportunities, they limit players to just 50 active games per season.
Furthermore, players on two-way contracts are ineligible to participate in the playoffs. These agreements are primarily utilized as a player development strategy, though they can occasionally serve to add depth with lightly-proven veteran talent.
“We were looking to add a point guard with two-way potential. Given our experiences over the past few years at the point guard position, we felt the need to secure another option if possible,” stated Pacers General Manager Chad Buchanan regarding the team’s draft objectives.
When pressed for further details on the two-way contract aspect, Buchanan clarified that no agreement was yet finalized. He did, however, emphasize that the Pacers aimed to enhance their flexibility heading into the offseason, and a two-way deal for Smith would achieve this. Two-way contracts do not count against the salary cap and do not occupy a standard roster spot. This allows the Pacers to maintain an additional spot on their 15-man roster and potentially increase their spending power.
This strategic maneuver was enabled by sending away a player on a standard contract to acquire Smith. Kam Jones, the 38th pick in the 2025 NBA Draft, was traded from Indiana to Chicago along with draft considerations and cash. Jones’s departure provides the Pacers with greater flexibility, a benefit further amplified by Smith’s anticipated two-way agreement.
Players on two-way contracts receive half of the league minimum salary for a player with zero years of NBA service. For the 2026-27 season, this figure is projected to be just over $679,000. NBA teams are permitted to sign up to three players to two-way contracts concurrently.
Last season, the Indiana Pacers concluded their season with Taelon Peter, Ethan Thompson, and Jalen Slawson on two-way deals. Thompson and Peter have since signed two-year contracts with the Pacers and remain on two-way agreements, while Slawson is set to enter free agency. The Pacers have a limited window to decide whether to extend a qualifying offer to Slawson. Regardless of their decision, Smith is expected to replace one of these three players.
Kam Jones, the 38th overall pick in 2025, signed a four-year standard contract that included over $2 million in guaranteed money. The previous year, Ajay Mitchell was selected at the same draft position by the Oklahoma City Thunder and also began his professional career on a two-way contract.
Jones has the potential to earn more if he is not waived by the Bulls this week. Mitchell, meanwhile, signed a three-year deal with the Thunder last summer, potentially worth up to $8.7 million. Smith will aim to replicate a similar financial trajectory, which will require strong performance with the Pacers.
“He’s a leader who contributes to winning. He excels at many things that elevate the play of those around him,” Buchanan commented on Smith. “When the ball is in his hands, your team typically generates a high-quality shot.”
Smith represents the Pacers’ sole draft selection this year. He will wear jersey number 3 for the franchise. Should his contract be converted to a standard deal during the season, the Pacers could still sign him to a rookie minimum contract, thereby benefiting from the lower salary structure afforded to second-round picks.
Pacers Round Out Roster with Additional Post-Draft Signings
Beyond the 60 players selected in the NBA Draft, teams routinely sign several undrafted prospects. The Pacers are following this common practice.
According to various reports, the team has reached agreements to add the following rookies for summer league play, potentially on Exhibit 10 contracts, or both: Taevion Kinsey, Jalen Warley, Tamin Lipsey, Rienk Mast, Kowacie Reeves Jr., and Keba Keita.
Should these signings proceed as anticipated, all these players will be part of the Pacers’ organization throughout the offseason. Indiana’s initial summer league game, which will likely feature Braden Smith alongside some of these new additions, is scheduled for July 10.
Business Style Takeaway: The Indiana Pacers are strategically utilizing two-way contracts to manage their salary cap and add developmental talent like Braden Smith, demonstrating a sophisticated approach to roster construction and financial flexibility in a tight cap environment. This allows them to acquire promising players at a lower initial cost while preserving future spending power.
Original article : www.forbes.com