In exchange for two-time All-Star forward Pascal Siakam, the Indiana Pacers dealt Bruce Brown, Jordan Nwora, and three first-round selections to the Toronto Raptors on Wednesday. Part of the credit for that historic agreement should go to the NBA’s new salary-floor regulations.
Brown inked a two-year, $45 million contract with the Pacers this past offseason; the deal includes a $23 million team option for 2024–2025.
In just 26.5 minutes per game during the playoffs, he averaged 12.0 points on 51.1% shooting, 4.0 rebounds, and 1.9 assists, which was a major component of the Denver Nuggets’ run to the NBA championship last season.
However, that is hardly the usual statistical output of someone making more than $20 million per year in the NBA.
The Pacers had over $30 million in cap space going into free agency, so they could afford to spend. But the NBA’s new collective bargaining agreement gave them an incentive to spend more swiftly than normal.
Teams merely needed to reach the salary floor—90% of the league’s salary cap in any given year—by the last day of the regular season under the prior CBA.
Those that didn’t had to divide the difference between the players on their roster for that particular season.
However, rebuilding teams frequently started the season well below the salary cap in order to permit salary dumps during the season before the trade deadline.
Teams must reach the salary floor by the opening day of the regular season in order to comply with the current CBA.
If they don’t, teams that make more money than the tax threshold—typically eight figures—will not be able to pay them a luxury tax.
This last offseason should serve as a warning that the tactic of teams hoarding cap space heading into the season will be all but eliminated.
Instead of losing their tax check, the Pacers chose to offer Brown a balloon deal that would last two years.
They fully controlled whether a key player on the defending champion Nuggets would still be under contract in 2024–2025 despite using up the majority of their cap space on him. It was a low-risk, high-floor deal for a squad hoping to reenter the postseason picture.
Additionally, the Pacers’ gamble was paying off. They had a 23-17 record before the deal on Wednesday, and Brown averaged a career-high 12.1 points on 47.5% shooting, 4.7 rebounds, and 3.0 assists in 29.7 minutes per game over 33 starts. Though by no means an All-Star, he fits in well on any lineup thanks to his versatile skill set.
The most obvious team that might use this tactic throughout the offseason is the Detroit Pistons.
The Pistons are expected to have more than $50 million in cap space this summer, according to Keith Smith of Spotrac, after moving Marvin Bagley III to the Washington Wizards in exchange for Danilo Gallinari and Mike Muscala’s expiring contracts.
They may overpay a veteran on a two-year contract in the hopes of using him as salary ballast at the trade deadline if they don’t use that space to acquire players through trades.
Over the next seven years, the Pistons will control all but one of their first-round picks and have a ton of recent lottery selections at their disposal.
This season, they should also have a high lottery pick, even though the incoming draft class is thought to be weaker than normal.
Nevertheless, if that player joins a core that already includes Ausar Thompson, Cade Cunningham, Jaden Ivey, and Jalen Duren, the Pistons may make a leap comparable to the Pacers the next season.
If not, they might be able to combine some of their young assets in a future blockbuster trade package by inking a veteran to a balloon deal.
Most unhappy stars should be open to working with them if they package them with draft compensation and short-term wages, should they ultimately decide to move on from any combination of the aforementioned quartet.
Although the Pacers are by no means the first team to sign a veteran to a short-term balloon contract, the new salary-floor regulations may encourage this practice. Teams will have larger contracts to offer as salary-matching material, which might lead to increased activity before the trade deadline.
