The Indiana Pacers will be in a unique position when the 2023-24 NBA league year begins on July 1.

The franchise, as it stands right now, has 12 players under contract for next season. But only two of them — Myles Turner and Buddy Hield — are set to make more than $9.2 million. Having a dozen players, yet none on expensive contracts, means the Pacers will have a lot of salary cap space to play with but few roster spots to add talent. They will be a team to watch this offseason.

But that is a narrow way of looking at offseason cap space. There are two important ways to break down what any team, Pacers included, has in terms of spending power in the summer.

The first way is looking at the amount of salary cap room a team has in the current league year. That is relevant for any moves the Pacers may make between now and June 30. And as it stands, the blue and gold actually don’t have any cap space until the league year ends.

Indiana reached the 2022-23 salary cap with two moves made during the season — a February deal that brought in Jordan Nwora, Serge Ibaka, and George Hill as well as a January contract renegotiation and extension with Myles Turner. Those deals added nearly $26 million to the Pacers guaranteed salaries, and they had $27 million in space prior to the moves. After re-signing James Johnson soon after, the blue and gold ran out of cap space.

That means right this second, the Pacers have no spending power. They can only add salary by making trades or using a salary cap exception between now and July 1. But that doesn’t mean Indiana has no spending power or can’t agree to lopsided trades.

On July 1, the new league year starts. Oshae Brissett, Hill, and Johnson will become free agents. Turner’s salary will drop by almost $15 million. Goga Bitadze, Terry Taylor, and Ibaka’s cap hits will come off of the books. The salary cap will climb. Suddenly, the Pacers will have cap space again, and quite a lot.

The dozen players that have guaranteed money on their contract for the blue and gold in 2023-24 sum to about $93.5 million in salaries. Additionally, the Pacers have the stretched salaries of Nik Stauskas, Juwan Morgan, and Malik Fitts to pay out next year, and that adds $1.8 million in salary. The maximum figure that the cap can be next year is just over $136 million. That means, without considering cap holds or draft picks, Indiana has a $40.8 million gap between their guaranteed salaries and the cap.

But draft picks and cap holds change the calculation. Indiana has three first-round picks (seventh, 26th, and 29th) in the upcoming NBA draft, and those picks — if they all get 120% of their rookie scale deals, which is customary — add $11.4 million in salary. Indiana likely won’t make all five of their draft picks, but for planning purposes, those numbers are important to know.

“We’re not going to keep all five picks, but there’s just a lot of things we could do. My guess is we’ll get a lot of offers for those picks, too.” Pacers President of Basketball Operations Kevin Pritchard said at the NBA Draft Lottery.

Take that $11.4 million out of the $40.8 million in space and the blue and gold drop down to just under $30 million in salary cap room.

The team also has cap holds for all of their free agents, but those can be axed at any time to free up space. And Indiana has enough cap space to reasonably re-sign any of their own players. They will likely hold on to the cap holds of their free agents (Brissett, Hill, Johnson, Lance Stephenson, Gabe York, and Kendall Brown) until they have to slash them to make a desired move, but they are not a hindrance to the team’s space.

In total, the cap holds of Indiana’s free agents sums to just under $15 million. Subtract that from the number above, and the Pacers are left with $14.6 million in cap space.

That’s the number the team can easily operate within come July 1. In theory, they could release all of their cap holds and get to nearly $30 million in space, though, so that is the amount of practical cap room the team has.

In summary, the two numbers that Indiana cares about are $0, the amount of cap space the team has through June 30, and just under $30 million — the amount the team could have on July 1, barring trades or additions. If the blue and gold agree to a trade on the June 22 draft night that adds significant salary to their books, it may not be able to become official until July 1 or later when that space actually opens up in Indiana.

The new NBA collective bargaining agreement encourages teams to reach 90% of the salary cap in team salary by the start of the regular season. As a result, it seems likely Indiana will add money this summer in some way. What those moves look like is difficult to determine given the number of smart directions Pritchard’s front office could go, but because the team figures to have a lot of cap space and not many roster spots, expect activity from the Indiana Pacers this offseason.