The Pacers' two-way contract crunch has apparently been solved by a team from across the Atlantic, and Braden Smith can feel safe in knowing he'll start his rookie year on an NBA roster. The Serbian publication Nova.rs reported that guard Ethan Thompson is close to signing a contract with the Serbian club Partizan Belgrade, a powerhouse in the Adriatic Basketball Association, after spending much of last season on a two-way contract with the Pacers. A league source confirmed that report to IndyStar on Thursday and said the Pacers will be finalizing the end of their roster in the near future. According to the source, that means Smith -- a second-round pick, Purdue All-American point guard, Westfield High School star and 2022 Indiana Mr. Basketball -- will be part of the Pacers' roster one way or the other. The Pacers now have a two-way contract and a standard contract open and Smith could fit into either one of those spots.
Smith was initially told after the Pacers traded with the Bulls to select him with the No. 38 pick that he would be signed to a two-way contract but they already had four players vying for three spots and then they signed forward Kobe Brown -- who spent last season on a standard contract -- to a two-way deal and therefore had a five-man competition for those jobs. They re-signed forward Jalen Slawson, but waived guard Taelon Peter and now lost Thompson to end the log jam. However, the Pacers still have room to sign Smith to a standard contract if they choose, and they can only use that contract on a player making the rookie minimum. They have approximately $206.8 million in allocated salary for the 2026-27 season which is well over the salary cap and luxury tax threshold and about $2.2 million under the first luxury tax apron. They are hard-capped at that apron because they signed forward Kelly Oubre Jr. using the non-taxpayer mid-level exception. Veteran minimum salaries cost $2.4 million against the cap, so the Pacers can't add a player using the veteran minimum to take that spot, but the rookie minimum is about $1.4 million so signing Smith at that number would fit him in. If the Pacers sign Smith to a standard contract, they could add another player on a two-way deal. Two-way contracts pay about half the rookie minimum but they do not count against the salary cap. Thompson, a first-team All-Pac 12 guard at Oregon State, spent his first four professional seasons entirely in the G League before the Pacers signed him to a two-way contract in late November when their back court was devastated by injuries. He played 32 games for the Pacers last season, averaging 7.0 points per game. He also played eight games with the Noblesville Boom in the G League and averaged 26.9 points, 6.9 rebounds and 5.6 assists per game with them. In 202 career G League games, he's averaging 18.4 points per game. He didn't play with the Pacers in Summer League, but did take part in World Cup qualifying with the Puerto Rican national team. Smith was twice named first-team All-America at Purdue and finished his career there as the all-time assists leader in NCAA Division I history with 1,103, breaking Bobby Hurley's record of 1,076. He helped the Boilermakers reach the NCAA title game in 2024 where they lost to Connecticut. It was their first Final Four trip since 1980. Dustin Dopirak covers the Pacers all season. Get more coverage on IndyStarTV and with the Pacers Insider newsletter. This article originally appeared on Indianapolis Star: Pacers' Ethan Thompson to sign with Serbian team, open door for Braden Smith