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Next for the Indiana Pacers: Decisions on Victor Oladipo and T.J. Warren

Garrett Ellwood/NBAE via Getty Images

The Indiana Pacers have agreed to hire Nate Bjorkgren as their new coach, according to a report by ESPN's Adrian Wojnarowski. Bjorkgren will replace Nate McMillan, who was fired in August after four seasons and Indiana's fourth straight first-round playoff exit.

For Indiana, the attention now shifts to the future of two key players: Victor Oladipo and T.J. Warren.

Note: The financials here are based on the salary cap and luxury tax holding at the 2019-20 levels, as expected. Dates are subject to adjustment.

MORE: Biggest trade, free agency and draft decisions for every eliminated NBA team


The future of Victor Oladipo

Last year, Indiana was on pace to reach 50 wins when Oladipo was lost for the season with a ruptured quad tendon in his right knee. The Pacers made the playoffs but were swept in the first round by the Boston Celtics.

This season, the Pacers added former NBA Rookie of the Year Malcolm Brogdon in free agency and got Oladipo back from his injury, but they lost All-Star Domantas Sabonis before the playoffs. And they were swept out of the first round again, this time by the Miami Heat.

It was only three years ago when Pacers president of basketball operations Kevin Pritchard was faced with the most important decision in franchise history: how to handle Paul George's trade request. The decision to trade George for Oladipo and Sabonis resulted in a franchise-saving transaction that eventually saw both new players selected to the All-Star Game.

Three years later, Pritchard and the Pacers are again at a crossroads, but this time with Oladipo. This offseason, the 28-year-old guard will enter the final year of a four-year, $84 million rookie extension he signed in 2016.

Oladipo and the Pacers can do one of three things:

1. Agree on a four-year, $112.9 million extension

That would be the maximum that Indiana can offer now, though it is $77 million less than the max contract to which the Pacers can sign Oladipo in 2021. It is also $28 million less than what a team other than the Pacers can offer if Oladipo becomes a free agent next year.

Oladipo is coming off a serious injury that sidelined him for 86 games over the 2018-19 and 2019-20 seasons. Would he choose almost $113 million in guaranteed money or bet on himself that he can regain his All-Star form and earn more?

However, turning down an offer this offseason doesn't necessarily mean that Oladipo wants out.

2. Play out the season

The likely scenario is that there is no extension in place and Pritchard will rely on the relationship that he has built with Oladipo and his agent, Aaron Turner. There will need to be a discussion between both sides about Oladipo's future with the Pacers.

If there is an understanding that the decision is based purely on finances and that Oladipo wants to be part of Indiana's future, then he can play out the year and wait for free agency.

What Pritchard cannot do is to be caught off guard a year from now if Oladipo signs with another team and leaves Indiana with nothing in return.

If Oladipo returns to the player he was in 2017-18 and before his injury in 2018-19, he will likely command a salary near the $32.7 million max. Before his injury in 2019, the Pacers were 32-15 and in line for a top-four seed. If he does not, the $25.2 million per year salary that the Pacers can offer this offseason will be the high-water mark.

3. Look for a trade partner

This is in the event Oladipo asks to be traded or tells the front office he is not likely to re-sign as a free agent or that the Pacers have a lukewarm reaction to committing more than $150 million to him.

One impediment to finding a trade partner is that the acquiring team would now be faced with the same extension limits. Interested teams would have to contemplate the risk/reward factor.

Is the risk of giving up players and assets worth the reward even if Oladipo is not on the roster after the season? Not in most cases. A team such as the Brooklyn Nets, for example, is not going to trade Caris LeVert only for Oladipo to leave after one season.

T.J. Warren extension options

While with the Phoenix Suns, Warren was not consistently healthy, and the team didn't win, making him hard to evaluate. Since he was drafted in 2014, Warren has missed 111 games and has never played more than 66 in one season. His four-year, $47 million extension signed in 2017 was not seen as a bargain at the time.

The combination of his injury history, the emergence of Kelly Oubre Jr., the Suns' desire for cap flexibility and the addition of lottery pick Cameron Johnson made Warren the expendable piece in 2019.

Before the season was suspended in mid-March, Warren missed only four games and was having a consistent campaign comparable to 2017-18, when he played 65 games and averaged 18.7 points on 52.9% from the field and 37.5% from 3.

As ESPN's Eric Woodyard reported, Indiana coach Nate McMillan challenged Warren to extend his range, as he had averaged three 3-point attempts per game and relied mostly on his midrange shot.

"I worked very hard on my shot," Warren said. "[McMillan] just wanted me to take more 3s. When I'm open, just shoot it, and the worst thing that can happen is you miss it and you get another opportunity at it. ... If you're open, shoot it, no matter where you're at."

During the seeding games, Warren posted four games of 30 or more points, including 53 against the Philadelphia 76ers, and averaged seven 3-point attempts. He shot 52.4% from 3, averaged 31 points and was named first-team All-Bubble.

Warren now enters the offseason with two years -- $12.0 million and $12.7 million -- left on his contract. Like his teammate Oladipo, Warren is extension eligible but faced with restrictions on what the Pacers can offer.

Warren's team-friendly contract is now a hindrance because the most Indiana can offer in the first year is $15.2 million -- 120% of his $12.7 million 2022-23 salary. The total amount comes to three years, $49.3 million ($15.2 million, $16.4 million and $17.7 million).


Offseason cap breakdown

After having cap flexibility in the previous three free-agent periods, the Pacers are over the salary cap with $124 million in salary. Indiana does have 12 players returning, but it will need to be aware if the projected $132.7 million luxury tax line drops. If the tax stays flat at $132.7 million, the Pacers can use up to $8 million of the midlevel exception and avoid a tax penalty.

Indiana has $95 million in committed salary in 2021-22 and projects to be under the salary cap if Oladipo leaves in free agency.

In any situation, Indiana will have the full $9.3 million midlevel and $3.6 million biannual exception available to use.

Depth chart

The resources available to build the roster

  • The draft: second-round pick

  • Cash to send out and receive in a trade

  • Exceptions: $9.3 million midlevel and $3.6 million biannual


Dates to watch

  • The $3.5 million contract for reserve guard T.J. McConnell becomes guaranteed if he is on the roster past the last day before free agency begins. McConnell currently has $1 million guaranteed. Unless it is a purely financial decision and not basketball related, McConnell's contract should become guaranteed.

  • Indiana has until the last day before free agency begins to extend a $1.9 million qualifying offer to former second-round pick Alize Johnson.


Restrictions

  • The poison pill restriction for Sabonis will be lifted on the first day of free agency. Sabonis signed a rookie extension last year, so the 2019-20 average salary and new extension are used for incoming salary. For example, Sabonis would count as $15.7 million as incoming salary for a team acquiring him and $3.5 million as outgoing salary. Because of the restriction, Sabonis cannot be traded until after free agency starts.

  • Because his contract is partially guaranteed, only $1 million of McConnell's $3.5 million salary is allowable in a trade.

  • The Pacers sent out $1.1 million in the Warren trade with Phoenix, and they are restricted from sending more than $4.5 million in any trade before free agency begins.

  • Indiana cannot trade its 2021 first-round pick until the night of the draft.


Extension candidates

Oladipo, Warren, T.J. Leaf and Doug McDermott are the four Pacers who are extension eligible.

Indiana has until the last day before the regular season begins to extend Leaf's rookie deal. The forward did not play in the postseason this year.

McDermott is in the final year of the three-year, $22 million contract that he signed in 2018. During the regular season, the forward averaged 10.2 points on a career-high 43.5% from 3. The Pacers' can attach an additional four seasons with a starting salary up to $8.8 million in 2021-22.


The draft assets

The Pacers traded their 2020 first-round pick to the Milwaukee Bucks as part of the Brogdon sign-and-trade deal last offseason. The Pacers do have their own second-round selection this year.

Here is how Jonathan Givony and Mike Schmitz have Indiana selecting in November:

• No. 54 (own) Ashton Hagans | Kentucky | G

Starting in 2021, the Pacers own all their future first-round selections.