Why is the Pacers team option decision for Micah Potter straightforward?

That’s because his contract for next season is non-guaranteed even if his option is exercised. Should the Pacers pick up Potter’s team option, he could still be waived before the season starts and carry no cap hit on the Pacers books. The Pacers gain no flexibility by declining Potter’s team option, so they should opt him into the deal and determine his future later.

“Nope,” Potter said just after the season ended when asked if he’d thought at all about his upcoming free agency. “Just trying to take things one day at a time. I learned that the hard way last year. Just one day at a time.”

Because the Pacers could waive Potter at any time prior to the season starting and carry no cap hit, they actually gain flexibility by holding on to the big man into the offseason. That’s because of his contract’s structure. It’s completely non-guaranteed, but any portion of it could become guaranteed for the purposes of a trade.

Say, for example, that the Pacers wanted to trade for a player making $10 million and didn’t want to become hard capped at the first apron (which can happen if a team takes back more than 100% of the player salaries they send out in a trade). If the Pacers traded away Jarace Walker ($8.47 million), they could include Potter in the deal and opt to guarantee the $1.53 million of his contract to match the incoming and outgoing salaries to avoid getting hard capped.

That’s just one example – there are countless ways a non-guaranteed contract can be valuable in deals. Guard Vasilije Micic had his contract become fully guaranteed last summer so his salary could be a part of a trade, for example. Those flexibility reasons, combined with Potter’s contract being non-guaranteed and not coming with any cap hit until the regular season starts, makes it obvious that the best course of action for the Pacers is to pick up his team option.

There’s a more compelling question. If the Pacers do end up wanting to keep Potter into the regular season, are they willing to risk a team scooping him up via waivers? Because even if the Pacers want to have Potter on the roster for the coming season, there is a mutually-beneficial transaction for the team and player that actually requires waiving the big man.

On his current deal, Potter’s cap hit and salary for the coming season would be the exact same: $2.801 million. But the way minimum deals work comes with a quirk that could help both Potter and the Pacers. Minimum salaries are based on years of NBA service, and they scale with the salary cap – the latest projections suggest that the cap will grow by less than 7% for next season.

Another important rule is that the NBA reimburses a portion of one-year, veteran’s minimum contracts for players with more than two years of service. This is done so that teams aren’t incentivized to sign younger, cheaper players instead of more experienced, yet more expensive, veterans. This is how Potter and the Pacers can mutually benefit. If, during the 2026-27 league year, Indiana waives Potter off of his current contract and then re-signs him to a new one-year, veteran’s minimum contract, Potter could actually make more money while carrying a smaller cap hit thanks to that reimbursement.

The projected minimum salary for a player with five years of service (like Potter) next season is $2,846,555. That would give the big man a raise of about $45k over his current contract. But because the NBA reimburses the difference between that salary and the two years of service minimum, Potter’s cap hit on such a deal would be $2,450,000 (pending official salary cap numbers).

All together, his salary cap hit would go down and give the Pacers more spending power, but his actual salary would go up. It’s a win-win… but the entire process would require the Pacers to first waive Potter, and another team could claim him in that process and inherit his current contract. That would ruin the plan – and it’s the exact plan that the Philadelphia 76ers executed with Eric Gordon, albeit via a player option instead of a non-guaranteed contract, last summer.

“His contract’s non-guaranteed, so anticipate us looking at the center position. Do we have enough there?” Pacers general manager Chad Buchahan said this week when asked about Potter’s team option. “I think it’s a position we’ll continue to evaluate in these coming weeks. Micah did some great things for us. Obviously, his shooting was exceptional for a center.”

Indiana could look for center upgrades this offseason. They will be conscious of their finances. There are reasons why Micah Potter might not be on the Pacers opening night roster for 2026-27. But there’s no reason for the team to decline his team option this week – instead, Potter’s future and contract specifics will likely be decided in the next few months.