Approaching Milestones for the Indiana Pacers and Agreement Details of James Johnson
INDIANAPOLIS — As the Indiana Pacers balance maintaining a full squad while staying close to the luxury tax threshold, two critical dates loom on the horizon for the team and 37-year-old forward James Johnson.
Johnson has been a vital asset for the Pacers over his three seasons with the team, albeit playing in only 30 regular-season matches for the franchise. His worth comes off the court, as he is an outstanding veteran leader and is highly respected by his fellow teammates. James has inked seven contracts with Indiana over the past three seasons, demonstrating the team's appreciation for his services.
During the 2023-24 campaign, Rick Carlisle, the Pacers head coach, commended Johnson for his wisdom in the locker room, his excellent rapport with team members, and his ability to communicate effectively, particularly in intense game situations. Johnson frequently provides valuable advice to teammates from the bench. Many clubs covet this type of role, as exemplified by Taj Gibson, Jeff Green, Garrett Temple, Markieff Morris, Tristan Thompson, and Patty Mills, who excel at similar functions for other franchises.
When are James Johnson's contract dates with the Pacers?
Johnson inked a new deal with Indiana during the offseason. It's a one-year, minimum salary contract worth $750k, with $3.3 million being Johnson's actual salary and $2.1 million serving as the Pacers' cap hit. Since Johnson boasts more than ten years of NBA experience, the league subsidizes the discrepancy.
Given that he is signed on a minimum salary, Johnson's cap hit increases incrementally each day during the NBA season. By November 30, 2023, his cap hit will climb to $755,826, marking the point at which the guaranteed portion of his contract is finally met. As a result, should the Pacers choose to release him, his cap hit would escalate further, with the figure continuing to increase daily.
The Pacers stand close to the luxury tax threshold, with a $126,000 cushion separating them. They must tread carefully in terms of spending and flexibility to avoid exceeding the tax threshold. While Johnson's cap hit cannot surpass the minimum salary, the team faces some opportunity cost for every day he remains on their roster, having to sacrifice future flexibility.
"To keep helping these young guys improve is the greatest compensation for me," Johnson remarked at the end of last season after the Pacers signed him to a rest-of-season contract in February. "It shows how much they value me."
December 22 has significance for Johnson as his cap hit increases with time, but a more crucial date lies ahead in January. Johnson's contract would cost the Pacers nearly $2.1 million against their salary cap if it becomes fully guaranteed, with the Pacers having until early January to make a decision on this matter.
On January 10, every NBA player with a contract will have their deal fully guarantee for the remainder of the season. Any non-guaranteed or partially-guaranteed salaries must be cleared from a team's books before this date by waiving the player, with decisions on these contracts being made preemptively.
This scenario applies to Johnson and his situation with the Pacers. If Johnson is waived before January 7, his cap hit for the remainder of the season would be capped at the prorated minimum salary amount for the days he spends on waivers. Conversely, if Johnson makes it until January 10 without being waived, his cap hit for the season would be locked in at $2.1 million. Even in this scenario, the Pacers could potentially dodge the luxury tax, albeit at the cost of limiting their flexibility.
Johnson, one of the ten oldest players in the NBA, has contributed 1.3 points and 0.7 rebounds per game this season. He has appeared in only three matches as of now, with the magnitude of his contributions lying off the court. Up until January 7, the Pacers will have to decide whether sacrificing luxury tax breathing room is worth parting ways with such a valuable teammate, and if they do so, they must devise a plan for optimally utilizing the additional flexibility they will gain.
"He's an excellent person, a great veteran," Kendall Brown, a former Pacers teammate, said of Johnson during last season. "He'll bring energy, toughness, and character to the team."
Previous season, Johnson managed to endure the league-wide contract guarantee date, but he was later waived to aid in a trade. Ultimately, Indiana opted to honor Johnson's original deal as well as two 10-day contracts and a rest-of-season contract. The team wanted him around. In the season prior, Johnson was released to facilitate a trade with the Milwaukee Bucks, only to be re-signed shortly after. Until January 7, the Pacers will have options, possibly leading to various outcomes should they waive Johnson.
His significant impact on the team is significant, leading to extensive praise from the front office and coaching staff. However, as of Sunday, the Pacers will witness an increase in Johnson's accumulated salary cap every day. An upcoming significant event could offer Indiana the opportunity to relief over $1 million in luxury tax expenses. Consequently, they must consider Johnson's influence on the roster. It might involve balancing his worth and adaptability.
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The Indiana Pacers will need to make a decision on James Johnson's contract before January 10, as this is the date when all NBA player contracts become fully guaranteed. If Johnson is not waived by January 7, his cap hit for the remainder of the season will increase to $2.1 million.
During the 2023-24 NBA season, James Johnson has been a valuable asset to the Indiana Pacers, both on and off the court. Despite appearing in only three matches, he has demonstrated his leadership and communication skills, frequently providing advice to his teammates from the bench.
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