How much can the Pacers offer Lance Stephenson?

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Lance Stephenson’ days with the Pacers might be numbered.

Indiana reportedly offered Stephenson a five-year, $44 million contract. His response? Look around for a better deal.

In turn, the Pacers have gone on a spending spree that prevents them from still offering Stephenson even that. They:

Because Miles received the non-taxpayer mid-level exception, the Pacers face a hard cap this season – projected to be $81 million.

To fit under the hard cap, the largest contract Indiana could offer Stephenson is five years, $43,708,217.

But few think the Pacers would go that far. The luxury tax line – projected to be $77 million – is likely their limit.

To stay out of the tax, Indiana could offer Stephenson just five years, $20,708,217.

I don’t think that’s going to cut it for a 23-year-old near-All-Star. Stephenson averaged 13.8 points, 7.2 rebounds and 4.6 assists per game this season. The only other players who hit 13-7-4 in the last 20 years at such a young age – Kevin Garnett, LeBron James, Chris Webber, Tracy McGrady, Lamar Odom, Paul George, Grant Hill and Juwan Howard – all received massive paydays.

Questions about Stephenson’s maturity will lower his offers, but not all the way down to barely above $4 million per year.

If the Pacers – who have few resources to replace him if he walks – want to keep Stephenson, they must trim salary. They have three reasonable unilateral options to do that:

  • Waiving Donald Sloan, whose salary is fully unguaranteed
  • Waiving Luis Scola, whose salary is partially guaranteed
  • Waiving and stretching Ian Mahinmi, who’s still owed $8 million the next two years and would therefore have a cap hit of $1.6 million each of the net five years

Depending on which player(s), Indiana wants to waive, here’s how much money Stephenson could make on a five-year contract:

Waive Stephenson’s potential five-year salary keeping Pacers under tax
Sloan $26,160,154
Mahinmi $34,508,217
Scola $37,541,647
Sloan+Mahinmi $34,697,507
Sloan+Scola $37,730,937
Scola+Mahinmi $46,078,999
All Three $46,268,289

The luxury tax is not assessed until the final day of the regular season. Indiana could always sign Stephenson and trim salary later, though that plan would obviously be risky.

The Pacers are clearly seeking a big trade, and though it might prove difficult, they might trim payroll in such a deal. Maybe Larry Bird has something up his sleeve.

But unless he does or the market for Stephenson is cooler than expected, Indiana is running out of room for Stephenson beneath the tax line.