A second-rounder who wants the real contract
Braden Smith, the 6-foot Purdue point guard who became the NCAA's all-time men's assists leader in 2025/26 (passing Bobby Hurley), went 38th overall in June. Chicago made the pick; Indiana holds his draft rights. Per CBS Sports' Isaac Trotter, relayed August 3 by HoopsRumors, the 23-year-old wants a guaranteed standard rookie-minimum deal from the Pacers, not a two-way, and he has no plans to return to West Lafayette for the fifth college season a recent federal ruling technically opened up. His agents at Priority Sports have made the ask plain. On its face this is a routine second-round contract story. Underneath, it is a hard-cap math problem that Indiana cannot simply spend its way out of.
Why the two-way is not the clean fix
A two-way contract is the cheap developmental tool teams reach for with picks in Smith's range: it is non-guaranteed and worth roughly half the rookie minimum, and the league caps each roster at three of them. That last detail is the whole problem. Reporting on draft night indicated Indiana intended to sign Smith to exactly that kind of deal. But the Pacers already carry three two-way players they like in Ethan Thompson, Jalen Slawson, and Kobe Brown, which means all three of those slots are spoken for. There is no fourth two-way line to hand Smith. To give him one, someone Indiana wanted to keep has to be cut first.
The first apron turns a preference into a constraint
In a normal cap environment, none of this would be a crisis. A team that likes a young player simply promotes him from a two-way to a standard minimum deal, or absorbs a second-round minimum without blinking. Operating under a first-apron hard cap removes that flexibility. The apron is a ceiling a team legally cannot cross, and per the reporting the Pacers do not have the room beneath it to convert Thompson, Slawson, or Brown into standard contracts right now. The mechanic that matters here: a standard minimum deal counts fully against the cap sheet, while a two-way is a fraction of that hit. When you are pressed against the hardest line in the CBA, the difference between those two contract types stops being an accounting footnote and becomes the entire decision.
The binary Indiana is staring at
Strip away the noise and the front office has two doors. Door A: use the final open spot on the 15-man standard roster on Smith, which gives him the guaranteed deal he is asking for and locks the standard roster at its maximum. Door B: keep that 15th standard spot open for in-season flexibility and instead waive one of the three two-way players to clear a two-way slot for Smith, which is precisely the contract Smith is trying to avoid signing. There is no costless third option while the hard cap holds. Either Indiana spends its last standard roster spot on a pick most teams would stash cheaply, or it cuts a developmental player it explicitly wanted to keep. Smith's leverage is that both of those outcomes cost the Pacers something real.
The draft-math lesson under the story
This is what the modern second round actually looks like once the aprons are in play. The 38th pick is not a free lottery ticket a contender can pocket and forget. Smith is good enough, and at 23 old enough, that a two-way reads as a demotion he can credibly decline, and the federal ruling that gave him a fallback fifth year at Purdue only strengthens that stance. For a Pacers team already scraping the underside of the first apron, cashing in a mid-second pick means either surrendering the last flexible spot on the roster or subtracting a two-way it valued. Neither is fatal, but both are trades. That is the squeeze: a No. 38 selection, a player who knows his worth, and a hard cap that refuses to let the team have it both ways.
Sources: HoopsRumors (relaying CBS Sports); Isaac Trotter (CBS Sports).