INDIANAPOLIS -- The Pacers said when they drafted Purdue point guard Braden Smith that they planned to sign him to a two-way contract. Nearly two months later, they finally had the roster space to make that official.
The Pacers announced Smith's signing via press release and social media Monday after they waived guard Ethan Thompson on Friday to allow him to sign a contract overseas with Partizan Belgrade in Serbia. At one point this summer, the Pacers were considering five players for their three two-way contract spots, but they waived guard Taelon Peter and Thompson and have signed Smith as well as forwards Kobe Brown and Jalen Slawson for their three two-way deals to start the 2026-27 season.
Two way contracts bind players to both an NBA team and its G League affiliate. A player on a two-way deal makes half the rookie minimum salary -- meaning $678,882 this season -- and can be active for up to 50 NBA games. Two-way contract players are not eligible for the postseason and do not count against a team's salary cap figure.
The Pacers traded guard Kam Jones and pick swaps in 2028 and 2030 to the Bulls for the No. 38 pick in the second round of June's draft to select Smith. Trading Jones cleared out about $2.1 million in salary, which helped the Pacers sign free agents Kelly Oubre Jr. and Larry Nance Jr. in the offseason.
Smith starred at Westfield High School and was named Indiana's Mr. Basketball in 2022. In four years at Purdue, he helped lead Purdue to its first Final Four since 1980 and it's first national final since 1969, earned All-America honors twice and set the all-time NCAA Division I record for career assists with 1,103. He played for the Pacers in Summer League and struggled to score, averaging 6.8 points per game on 26.5% shooting including 29.4% from 3-point range (5 of 17). However, he averaged 7.0 assists per game and his 35 total assists were tied for second most in all of NBA Summer League behind only Zyon Pullin's 39.
The Pacers still have a standard contract open, but they are only $2.2 million below the first luxury tax apron, where they are hard-capped because Oubre was signed using the non-taxpayer mid-level exception. That means they can add a player at the rookie minimum salary but not any veteran minimum salary beyond one year, as that counts $2.4 million against the cap.
This article originally appeared on Indianapolis Star: Braden Smith (finally) signs two-way contract with Pacers