Indiana Pacers Get Disabled Player Exception Without Tyrese Haliburton

Indiana Pacers guard Tyrese Haliburton (0) shoots against Oklahoma City Thunder guard Shai Gilgeous-Alexander (2) during Game 7 of the NBA Finals basketball series Sunday, June 22, 2025, in Oklahoma City. (Matthew Stockman/Pool Photo via AP)

Associated Press

INDIANAPOLIS – The Indiana Pacers have another tool at their disposal as they have been granted a Disabled Player Exception (DPE) for the 2025-26 season. The Pacers applied for the exception because they are over the salary cap and star guard Tyrese Haliburton tore his Achilles, meaning he will miss the entirety of the 2025-26 season.

Pacers general manager Chad Buchanan confirmed that Indiana applied for, and were given, the DPE during an appearance on the Setting The Pace podcast late last month. “We’ve applied for that and been granted that exception,” he said. “Whether we use it or not, it depends. Using the full exception would put us in the luxury tax.”

Buchanan added that the team isn’t opposed to crossing the luxury tax barrier, though it would take a home run transaction for them to consider it in their current reality. Adding another point guard is something the team could look at if they bring in another player.

Those notes are all secondary to the fact that the Pacers have another salary cap tool at their disposal. They were granted two much smaller DPEs last season, too, after both James Wiseman and Isaiah Jackson tore their Achilles early in the 2024-25 campaign.

What does a Disabled Player Exception allow the Pacers to do?

A DPE is given to a team when one of their players is said to be out for a full season. According to the NBA’s collective bargaining agreement, the exact language is that a player “would be unable to play through the following June 15,” for the specific criteria. If so, they are designated as out for the year – and an NBA-assigned physician has the final say.

If granted, a DPE allows teams – in this case, the Pacers – to effectively bring in a player as a stand-in for their out-of-commission player. The additional talent can be acquired in any manner, so the Pacers have a new tool to sign someone, make a trade, or claim someone off of waivers. DPEs permit adding a player with a starting salary that maxes out at the lesser of 50% of the salary of the player they are replacing or the Non-Taxpayer Mid-Level Salary Exception (NTMLE). For Indiana in this case, half of Haliburton’s salary is about $22.8 million, and the NTMLE is worth $14.1 million this season. The latter number is smaller, so the Pacers DPE in this instance is for $14.1 million.

Any player acquired by the Pacers using the DPE must be in the final year of their player contract, including options. If the front office makes a signing/waiver claim using the exception, for example, the player would have to be on a deal with one year left at a maximum value of $14.1 million.

In a trade, the blue and gold could bring in a player via the exception that is on an expiring deal and makes the amount of the NTMLE (+100k, in the case of trades) or less during the 2025-26 season. As things stand, the Pacers are about $6.1 million under the luxury tax threshold, so any addition making more than that salary is likely a non-starter for the franchise.

The Pacers DPE will expire when used or if it goes unused by March 10, 2026. If someone is signed and then Haliburton is still able to miraculously return from injury during the coming season, then Indiana is lucky and gets to keep both players for the remainder of the campaign.

That’s exceedingly unlikely, though, and Haliburton still counts for the Pacers team salary numbers for the full season. It’s a damaging injury on the court more than anything, of course. But it also significantly impacts the Pacers spending this season.

Salary cap exceptions cannot be combined in the NBA, so the DPE can’t be aggregated with another salary or exception in a trade. $14.1 million is the most value the Pacers can extract from the DPE granted due to Haliburton’s absence.

Perhaps the team looks to bring in another guard to add depth at Haliburton’s position. Maybe the DPE goes unused until the trade deadline and is instead treated as a tool to make an imbalanced trade – or simply generate a trade exception in a balanced deal. It might go through the season without any function due to the Pacers proximity to the tax line. But having the exception is preferred to not, and Indiana now has another team-building tool to help them manage a season without their star point guard.