Like most small market contenders in the modern NBA, the Indiana Pacers were built through the draft. They grabbed Roy Hibbert in 2008, Paul George and Lance Stephenson in 2010 and flipped their first-round pick in 2011 for George Hill. With their core in place, they made one big splash in free agency - signing David West in 2012.
They've managed to be a contender while staying under the luxury tax line because they've had so many quality young players on cost-controlled deals, but that ends this summer. George and Hibbert have max deals, while West is at $12 million and Hill is at $8 million. If they pay Lance, they are going to be way over the cap without many ways to improve their team.
That's where you need to be able to add more cheap pieces through the draft. Unfortunately for the Pacers, they've lost their touch in recent years. There's no young talent in the pipeline and they don't have a pick in this year's draft. They went all-in on this year's team and the bill from that decision is going to come due this off-season.
2012 - Miles Plumlee (part of the Luis Scola trade)
2013 - Solomon Hill
2014 - Pick dealt for Luis Scola
Plumlee was seen as a reach at the time, but he's proven that he's an NBA-caliber C. Unfortunately for the Pacers, that happened in Phoenix, where he was a dynamic pick-and-roll partner for Eric Bledsoe and Goran Dragic. In Indiana, he couldn't get minutes behind Roy Hibbert and struggled in the Pacers half-court system and was a salary throw-in in the deal for Scola.
Hill has decent size for a small forward (6'7 225) but he isn't a great athlete and he doesn't have great length (6'9 wingspan). He's probably never going to be an great defensive player and he's not an explosive scorer. He could stick in the NBA as a three-point shooter who can move the ball and put it on the floor, but he doesn't have a very high ceiling.
What's really going to kill them is giving up two first-round picks (2012 and 2014) for a guy who isn't that good anyway. Scola was not a difference maker in this year's playoffs and they gave up two potential cheap rotation players from 2015-2017 to get him. Those were both late first-round picks, but this is a franchise that found Lance Stephenson at No. 40.
That's what you have to do to contend in the modern NBA - you have to be able to consistently find talent in the draft. The Pacers have had a good run, but if they want to sustain it over the next 3-5 seasons, they need to keep the pipeline of young talent coming in. The only other option is to spend A LOT of money and they've shown no real interest in doing that.