August 10 marked the one-year anniversary of the Dwight Howard trade and the official beginning of this current rebuild project. The old Magic team was swept out fairly quickly and a new Magic team was preparing to dawn.
One tool that figured to help the Magic out in this rebuilding effort would have been the very large traded player exception that Rob Hennigan created in the deal. In fact, it is the largest traded player exception that has been created in NBA history, at around $17 million.
The one catch is that, like all traded player exceptions, it expires one year after the date it is created.
The Magic failed to use this asset and allowed it to expire once the clock turned to midnight Sunday morning.
The decision to allow the traded player exception to expire does not affect the Magic's current cap situation or anyone currently on the roster. A traded player exception is created to allow teams that are above the salary cap to make trades. It allows the team that acquires the exception to acquire more salary than they take in. So, for instance, the Magic could have acquired $17 million more in salary in a trade than they sent out.
Of course, the catch is you still have to pay the player and any other taxes that might apply then and in the future. This is just a way for the rules to allow a trade to happen.
Orlando did not get the deal it wanted that would help the team in the long term and use at least a portion of the traded player exception. Rob Hennigan is committed to building his team a certain way and using the traded player exception did not fit into those plans. Orlando is not looking to take on more salary at the moment but rather more interested in developing the young players on its roster.
And so he let it expire.
Perhaps next year it would have been more useful with the Magic possibly falling below the payroll floor when Gilbert Arenas' amnestied contract comes off the books. Arenas' salary does not count against the salary cap but still counts toward the payroll floor.
That is an issue for another day and the Magic will continue on with their process and plans.