Pacers’ Buchanan: Spending Into Tax ‘A Very Real Possibility’

It has been two decades since the Pacers were a taxpaying team, but there’s a chance that will change during the 2026/27 season, general manager Chad Buchanan said during a recent radio interview on The Ride with JMV on The Fan, per Dustin Dopirak of The Indianapolis Star.

Based on their current salary commitments, the Pacers will be hovering right around the projected luxury tax line ($200.5MM) in 2026/27. In other words, if they want to make upgrades via free agency or on the trade market, it would likely mean becoming a taxpayer for the first time since 2006. According to Buchanan, Indiana is in a “win-now window” and intends to be “aggressive” in its attempts to strengthen the roster, so paying the tax is in play.

“That’s a very real possibility,” Buchanan said. “There’s a lot of different moves that can be made this offseason, whether it be trades or free agency, that impact where you’re at relative to the luxury tax and then the first apron and obviously the second apron above that. You want to be smart and not hamstring yourself. The aprons can be very restrictive in terms of how you build your team.

“(Team owner Herb) Simon and our whole front office, we want to be aggressive and try to put this team in the best position to win a championship. Spending smartly and wisely will be a part of that, but I think we realize where we’re at with our timeline and, for the right player, I think we’re gonna spend.”

If the Pacers had gotten some good luck in the draft lottery and hung onto their top-four protected first-rounder, that pick would’ve had a cap hold exceeding $10MM+, which would’ve pushed Indiana deeper into projected tax territory. Not having that first-round selection will make it easier for the team to avoid the tax, either by operating below that threshold entirely or by surpassing it and then ducking back below it later with an in-season trade.

While Buchanan insists Pacers ownership is prepared to spend on a roster with championship aspirations, only six teams have paid less in total tax payments than Indiana since the system was implemented in 2001/02, per Mark Deeks of Forbes, and only four clubs have gone longer without paying a luxury tax bill (Sacramento and Detroit haven’t been taxpayers since 2004, while Charlotte and New Orleans have never paid the tax).

Still, the Pacers’ willingness to roll the dice on that valuable 2026 first-rounder as part of their trade package for Ivica Zubac in February is a strong signal that they’re all-in on their current window. Addressing that trade and the fact that Indiana was forced to send the No. 5 overall pick to the Clippers, Buchanan reiterated that he and the Pacers’ front office don’t regret making their move for Zubac.

“We wanted to keep the core of this roster intact because it’s shown to be a very successful core,” Buchanan explained. “Having to sacrifice that this summer to go find a starting center only creates another hole for us and that’s not something we wanted to risk. Regardless of how it turned out, I would still make this trade. I’m a big believer in this group. I’m a big believer in Zu. I’m a big believer in the coaches. Although it is disappointing not getting the pick 1-4, I still would do the trade over again.”

Buchanan added that Indiana was deciding between Zubac and another center at the trade deadline and opted for the longtime Clippers big man.

“We had Zu and one other option that were both the same price,” the Pacers’ GM said, per Dopirak. “To trade for a top-10 center in our league is pricey. We made the decision at that point to be aggressive.”

Reporting before and after February’s trade deadline linked the Pacers to centers like Walker Kessler, Jarrett Allen, Nic Claxton, Onyeka Okongwu, Daniel Gafford, and Yves Missi, though Zubac was most frequently cited as their top target.