Why don't players want to return to Indiana?

Wasn't Hill traded? Hill has very close ties to Indy, including his push to keep Broad Ripple HS from closing permanently. Hill was flat his last two years with the Pacers. He had a very improved year with the Jazz played alongside Hayward.

The Pacers did not try very hard to re-sign Teague. He underperformed compared to what he did at Atlanta. I don't think the Pacers wanted to pay him what he expected.

Hayward played at Butler for Brad Stevens. He has a strong tie with Stevens, not McMillan. The Pacers would've had a stronger chance of signing Hayward with Bird handling negotiations, but not nearly as strong of a chance as the Celtics with Stevens coaching.

At the end of the day, the NBA is a business, and decisions are made based on what makes business sense.

The current Pacer organization is lethargic. If Stevens were coaching the Pacers, Hayward would be in Indy, as would other players.

Very poorly run with low bars for success.  Ownership is content with meh as long as they make the playoffs and are "competitive."  Refuse to spend money, don't go over the luxury tax threshhold, afraid of losing fans, so just keep it pointed down the middle. No flash.    What you get is a regular dose of 7th or 8th place finishes but in the playoffs, with a one and done first round series vs the 1 or 2 seed. That's all there is. 

These guys are interested in big market teams generally. Economic opportunity, lifestyle, media coverage, and a team very likely to have resources to go to the top. You are the best you want to play for the best. I would not be looking for player affiliation with home town. It is a relatively small factor.

If the Pacers superstar had been Hayward, rather than Paul George, and if Larry Bird had made the Pacers a real player in the East, regardless of whether we had Brad Stevens, we would have had a good chance to retain him. If we were a winner this year, we might even have retained George.

Just because of economic opportunity and big city life, I think the Celts with, I admit, at least a small plus from his former coach would have still been a favorite to sign Hayward away. The Celtics are one of the top franchises in sports history. It isn't home town cooking that has done that.

The Pacers are a cheap organization. As in tightwads. And they think small.

I am not going to tell the owner how to spend his money. Revenue was $95M though.

Playing it safe will almost always get what you deserve. 1 NBA finals ever and a historically middling NBA franchise.

The owner did not put all that much money in his pocket on 95M revenue.  I am not saying he is a selfless, sacrificing owner exactly though.   He has made a bundle since he took a pretty big chance in acquiring the Pacers in 1986.  But so has every other owner with skin in the game that long.  Give him some credit for staying in Indy and not cashing out!

The Pacers get 20M in gate receipts compared to 128M for the Knicks or 100M for the Lakers or 75M for the Bulls. 

Now if you think the Pacers Brand, Arena revenue, Market, and NBA TV revenue allows them the same ability to gamble and take risks, I don't get that. 

I give them the same poor marks for decisions made as any fan, certainly I am not a fan of the management.   Still.  Pacers have below average resources and have performed fairly well overall given that.  Risk taking might allow them better performance.  OR lead them to moving elsewhere.  OR just flat out stinking the place up. 

That's the problem. Why should any owner sacrifice or risk his investment when the market size will not reward him all that much.

The Warriors, Knicks, Celts, Bulls are all worth 2 or 3 times as much money by any measure.  The middle teams in the league, some are worth 1.5 times as much.  Pacers are about average for the lower 2/3 of teams, not many very much lower.  Why would we expect really high performance?

The greatest part of value is the promise of greater future revenue in most NBA cities, where most have larger markets to exploit brand, make more on arena revenue, and ticket sales. 

Ultimately valuation boils down to the expected stream of income from a franchise into the future.  (In pro sports there is the other factor that it is a monopoly.  So there are only so many franchises in existence, and the owners if they do allow expansion get a big payday.) 

The Pacers owner has made a bundle and benefited from the growth in TV revenue from the league and the new franchises and various migrations of franchises to bigger and lucrative markets.  But, put that aside, the differences in valuation come down to media contracts, ticket sales, arena revenue and branding which are all dependent on market size.

If you assumed the NBA was 100% about business you'd be better off than saying it was ownership savvy or risk taking or sacrificing for ego and a winner.  Sure, all things equal, winners make more money.   However,  this doesn't mean winners make the most money.  The owners in big markets can make more money with losers than winners in small markets.  Valuation shows just how that works.

For some overall comparison of franchise viability and value, see  Forbes Valuation 2016