The salary cap effect of the Serge Ibaka trade

The Orlando Magic took a little extra salary in acquiring Serge Ibaka but still maintain a lot of cap room to go after big free agents, although not as much.

The Orlando Magic’s acquisition of Serge Ibaka was the first of what many believe will be an active summer for the team. General manager Rob Hennigan promised to be active this summer and pulled the trigger on the biggest trade of draft night.

To much controversy, but he pulled the trigger nonetheless.

The Magic are still somewhat adjusting to the new reality of having Ibaka on the team and shipping off Oladipo. The main focus remains the same. To complete this roster and take the next step to the Playoffs, the Magic have to focus on free agency. And likely make a big splash.

The Magic still have work to do to make this deal work and accomplish their goals.

The question then that has to linger is did the Magic hurt their free agency chances with Ibaka instead of Oladipo? There are some questions involved to answer that question that are a little more subjective and still difficult to answer.

What is clear, is that there is a financial cost to every move. And the Magic changed some of the calculus for this summer in swapping one salary for another.

The Magic made their intentions clear for the summer back in February when they traded Tobias Harris for Brandon Jennings and Ersan Ilyasova. Jennings was on an expiring $8 million contract. Ilyasova had one more year left at $8.4 million, but only $400,000 was guaranteed if he remained on a roster past July 1.

It was clear the Magic would look to cut or move him before that deadline. They cleared the $17-plus million Harris would have made last year without adding any additional salary. Including expected cap holds, the Magic had an estimated $40 million in cap space. This was based on the $92 million cap projected back in February.

Things have changed some with the deal.

Orlando was up against the cap when they made this trade — the contracts do not flip over until the new year in the NBA calendar, beginning July 1. So the Magic had to match salaries to make the deal work.

Serge Ibaka is due $12.3 million next season. Ilyasova would make only $400,000 if he was cut as expected. Oladipo is owed about $6.6 million next year. The cap hold for the 11th pick in the draft is roughly $2 million. So the Magic brought in $12.3 million onto their books and sent out $9 million.

In reality then, the Magic only ate up about $3 million of their cap space to play with this upcoming summer. Considering the cap is expected to be $2 million more than what was originally projected and the number is still roughly the same — $40 million in cap space.

Eric Pincus of Basketball Insiders estimates the Magic could have $19.2-$50.1 million in cap room depending on which players the team retains. It seems safe to assume the Magic will look to retain Evan Fournier, Dewayne Dedmon, Andrew Nicholson and Jason Smith (roughly $18 million in cap holds).

How do is that $40 million estimate figured? The Magic have $41.2 million in guaranteed salary at the moment. Add in those $18 million in cap holds and the total on the books comes out to roughly $59.2 million. The cap room estimate then does shrink to $34.8 million rather than the $40 million estimated in April.

Evaluating this deal, it certainly seems to be cap neutral for what the Magic are planning to do (again expected because both the Magic and the Thunder had to match salaries). But it does decrease some of the available funds for the Magic to spend.

What has changed some is how much the max contract is worth thanks to the salary cap jumping up to $94 million from $92 million. The max contract for a player with up to six years of experience is $22.2 million. For players with seven to nine years of experience, the max salary starts at $26.6 million. For those with 10 or more years of experience, a max contract starts at $31 million.

With just roughly $35 million to play with now, a veteran max free agent would eat up most of the space remaining (and remember, this does not include the expected salary increase for Evan Fournier, although the Magic can go over the cap to sign him since they have his Bird Rights). The Magic would have to renounce some free agents to have room to sign two max free agents.

Ibaka was a big move. It did increase the salary the Magic would take on in 2017. And so it will increase their ability to spend this free agency.

But the Magic still have some of the most cap space in the league to spend this summer. And they are expected to do so, going after a max player.

Who that is might still be a matter of speculation. With Fournier likely returning, the Magic could still use some outside shooting, scoring and length on the perimeter. Particularly at small forward.

That could have the Magic focused on a name that has become a rumored target since February.

Mike Leslie of WFAA Sports in Dallas reports Chandler Parsons is not likely to be a Mavericks priority and the small forward could see offers from the Magic and Los Angeles Lakers this offseason. It is believed it will take a max contract for any team to acquire Parsons this summer (he would be in that smallest tier for a max contract at $22.1 million). The Magic have been connected to Parsons since February and the Mavericks have believed they would be a team to chase him.

Parsons averaged 13.1 points per game and shot 41.4 percent from beyond the arc. Injury issues though plague the former Florida Gator and have many wondering if he is truly worth the max this market may demand for him.

The Mavericks could also a be a team chasing after Evan Fournier, according to a report from Tim McMahon of ESPN Dallas. The order in which the Magic sign players will also be important. If Fournier signs his new deal first, it would eat into whatever cap room the Magic have left for others.

The Oladipo trade probably sends a signal the Magic are willing to match any offer sheet on Fournier and so they can communicate their timeline and plans to Fournier and prevent him from signing an offer sheet before the Magic make other moves.

Even though the Magic took on a little bit more money in Ibaka, they still have flexibility and cap space to make some major moves this offseason. There is still a lot of work to do to complete this roster.

Next: Orlando Magic's Summer League roster takes shape

There should still be the tools to accomplish them.