Pacers retain Jalen Smith despite limits on contract offer, according to report

What seemed nearly impossible due to NBA contract rules has happened: Jalen Smith is returning to the Pacers. The free agent forward agreed to a two-year deal with Indiana, The Athletic's Shams Charania reported Friday. The value was not disclosed, but the most the Pacers could've offered Smith over a two-year span is $10.6 million due to his previous team, Phoenix, declining his third-year rookie option.

So in other words, this is a steal for the Pacers.

Smith was drafted 10th overall by the Suns in 2020, but after an underwhelming start to his career, his rookie option was declined — which has happened only five other times in league history — and he was traded to Indiana in exchange for Torrey Craig and a 2022 second-round pick. Since the Pacers acquired Smith, they had to abide by his rookie contract rules — offering only the value of the options the Suns declined — and could only sign him for a max of roughly $10.6 million over two years, which was presumably below his market value as an unrestricted free agent after he thrived in Indiana.

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The 22-year-old averaged 13.4 points and 7.6 rebounds in 22 games for the Pacers compared to 4.1 points and 3.1 rebounds in 56 games for the Suns. Smith also shot 53.1% overall and 37.3% on 3s after joining Indiana.

By retaining Smith, the Pacers strengthen their young core. He'll accompany budding star point guard Tyrese Haliburton, No. 6 pick Bennedict Mathurin and promising second-year players Chris Duarte and Isaiah Jackson, among others.

“This is a huge offseason, and a scary offseason,” Smith said in his season-ending exit interview. "Obviously, as a young player, you don't want to make the wrong decision. … This offseason is gonna come down to a lot of thinking. A lot of late night conversations with my agency, my family, just trying to figure out the right path for me."

Apparently, the right path is the one he's already been on.

July 6 is the earliest Smith's deal, as well as other free agent signings and trades, can become official. The NBA's moratorium began Thursday evening, allowing contracts to be agreed on in principle. Players and teams can still change their minds and call off deals during this period.

This article originally appeared on Indianapolis Star: NBA free agency: Pacers retain Jalen Smith despite limits on offer