Orlando Magic will have limited funds for free agency in summer 2017
The Orlando Magic enter this important offseason with a lot of questions and limited funds. The team enters the offseason with its back against the wall.
The season recap part of the offseason is nearly over. The preparations for the 2018 season kick into high gear for the Orlando Magic this week with the NBA Draft Combine beginning this week — ESPN2 will air some of the agility drills and five-on-five play Thursday and Friday.
With that, the Magic will divert some of their attention away from the general manager search and to the important task of stockpiling assets for next year’s team.
Without a doubt, the Magic’s draft picks will play an important role in rebuilding this team quickly for next season.
As Josh Robbins of the Orlando Sentinel relates in his profile of interim general manager Matt Lloyd, the team is counting down the days remaining until the draft.
But they are also counting down the days until free agency. And while the Magic expect to have a new voice leading the charge for free agency on July 1, they also have to have an idea of which players to target. This goes a bit beyond what was on that whiteboard back in April. Priorities change quickly. So too may resources.
The Magic are in a different financial position this summer than they were last summer. The salary cap will increase, but not with the same intensity it did last year. The Magic cleared cap room at last year’s trade deadline to have money to go after free agents.
That is not the case this year.
In fact, Orlando increased its cap hit in acquiring Terrence Ross at the trade deadline.
If the Magic are going to make significant improvements to the roster, it will come through the Draft and possibly through trades. They simply do not have the cap room to make a dramatic improvement.
As I discussed on the most recent episode of the Orlando Magic Daily Podcast with Keith Smith of RealGM, the Magic are going to have much less salary cap space than many would assume.
Eric Pincus of Basketball Insiders estimates the Magic will have $16 million in cap room to spend this summer. This is assuming a $101 million salary cap, a lower estimate than was expected at the beginning of the season.
How does he get this number? Let’s review the Magic’s basic books.
According to Pincus’ salary database on Basketball Insiders, the Magic have $77.9 million in guaranteed salary for next year. That includes $1 million in guaranteed salary to C.J. Watson, the remaining $4 million is non-guaranteed for the 2018 season.
So the Magic start there. Expect Orlando to keep Stephen Zimmerman ($1.3 million), Patricio Garino ($1.3 million) and Marcus Georges-Hunt ($1.3 million) through the summer. That leaves Orlando with a base amount of $81.9 million.
The Magic would then add an additional amount of salary as a cap hold for their upcoming first round draft picks — the fifth pick is slated to make $3.8 million (for a cap hold of 120 percent the slotted salary of $4.6 million) and the 25th pick is slated to make $1.3 million (a $1.5 million cap hold).
So that brings the Magic’s total up to roughly $88 million. At a $101 million salary cap, that is an estimated $13 million of room instead of $16 million.
It is safe to say the Magic will have roughly $13-16 million in cap room. The discrepancy between this number and Pincus’ number is likely the difference between decisions on Stephen Zimmerman, Patricio Garino and Marcus Georges-Hunt.
Orlando Magic
This also assumes the Magic do not retain any of their free agents. To hit this number, the Magic would have to waive C.J. Watson before his contract becomes fully guaranteed. They would also have to renounce free agents Jeff Green and Jodie Meeks.
C.J. Watson and Jeff Green seem pretty certain. Jodie Meeks does not seem as certain. He will hold a $12.4 million cap hold. If the Magic want to retain his Bird Rights it would significantly eat into the Magic’s cap room.
That does not mean the team may not re-sign Meeks eventually. A team can renounce and retain Bird Rights fairly easily as it suits them. And once the Magic re-sign Meeks, his cap hit becomes whatever he signed for and not his Bird Rights number.
That will be the biggest decision for the Magic this summer. It is probably an easy one considering how constricted it appears the Magic’s cap situation is. The team will also have access to the various mid-level exceptions and potentially even the room exception to sign free agents.
But, in essence, Orlando will have limited funds to spend on free agency. The team will have to make most of their improvements through trade and through the draft.
Next: 3 signs of hope for the Orlando Magic in 2018
And, most importantly, Orlando will have to be smart with its money this season.