Pacers Rookie-Scale Option Decision For Walker And Sheppard Is Simple

INDIANAPOLIS – A deadline awaits at the end of October that impacts most NBA teams and nearly 60 players. By the final day of the upcoming month, every team that has a 2023 or 2024 first-round draft pick on their roster must decide if they want to exercise a team option in their rookie-scale contracts covering the 2026-27 season.

The Indiana Pacers are among the teams with decisions coming. They didn’t have a first-round selection in 2024, but they had two in 2023 – Jarace Walker and Ben Sheppard joined the Pacers that summer. Both players are presently rotation-level talents for the blue and gold. They each logged at least 63 games played in the 2024-25 regular season and 12+ in the playoffs.

Because both of the two-year pros are still on their rookie-scale contracts, the Pacers have to determine what they should do contractually for Walker and Sheppard in the 2026-27 season. But the front office in Indiana doesn’t need much time to think over the decisions. Both are complete no brainers.

Rookie-scale deals in the NBA are unlike other contracts. They aren’t typically negotiated – instead, they are four-year agreements assigned to first-round selections based on the pick number they are chosen, with the total financial value dropping throughout the draft. The final two years of the agreement both are covered by team options.

Those team options are unique in that they must be decided upon a full season in advance. Unlike other contract options that typically relate to the coming season, rookie-scale decisions are made by the end of October during the preceding season.

That is where the Pacers, and other teams, are now. They have until October 31 to determine what to do with fourth-year team options (for 2023 first-round picks) or third-year team options (for 2024) that apply to the 2026-27 season. Even before seeing essentially all of the coming campaign, teams must make a call.

Why the Pacers won’t have to think long to make their decisions with Walker and Sheppard

Fortunately for the Pacers, it’s easy. Walker and Sheppard are already solid talents and are capable of playing on bigger stages. For an Indiana group that has high hopes, retaining effective young talent is a must.

Last season, Walker averaged 6.1 points and 3.1 rebounds per contest while Sheppard averaged 5.3 points and 2.8 boards. Walker was, as he admitted, up and down early in his second season but found more consistency late in the year while Sheppard started hot and saw his shot accuracy fade while being mostly reliable on defense. Head coach Rick Carlisle trusted both players almost every game throughout the playoffs.

In 2026-27, Walker’s team option is for just under $8.5 million. Sheppard’s, meanwhile, is valued at about $5.0 million. Rotation-level talents are worth at least that, especially young ones, so having Walker and Sheppard on those deals is an easy call. They would both likely be paid more if they were free agents on the open market, and if the options are declined the Pacers couldn’t pay the players more money next season anyways (though other teams could).

On top of strictly value, the opportunity cost for Indiana is fairly low. While they may be battling the luxury tax or first apron as a spending limit in future seasons, they almost certainly won’t be under the salary cap next summer. As a result, they won’t open any cap space by not having Sheppard or Walker under contract – without resources to replace them, picking up their options becomes an even more obvious decision.

It’s rare that capable players have their rookie options declined in the first place, and that’s the most important factor here. Walker and Sheppard are both rotation-level talents. Losing them would be a hit to the Pacers, and losing them when they are on a cheap, team-controlled contract would be even worse.

Both players enter Indiana’s upcoming gap year with questions to answer. Can Walker pop in year three and continue to look more like a lottery pick? Will Sheppard find night-in night-out consistency as a shooter or add other skills? Any skill development will be important this season for both players.

Walker ended the most recent campaign with an ankle injury, but he’s healthier now. “[He’s] progressing. I don’t know exactly where he is. But I know he’s probably back on the court now,” Carlisle said in July. “In terms of what percent of full recovery, I don’t know. But we’ll find out soon. It’s a short summer, so he’s going to have to get after it.”

Training camp is on the horizon, yet the deadline for these rookie-scale team options is over a month away. The Pacers, and other teams, have time before officially doing anything. But Indiana won’t have to think much, if at all, when making these decisions. They have to keep Walker and Sheppard around.