Khem Birch and how the Orlando Magic might use their two-way contracts

The Orlando Magic have yet to use any of their two-way contracts. How the team structured Khem Birch‘s contract might offer a clue to their G-League plans.

The NBA has done its work to expand what is now the NBA G-League in recent years. More and more teams have a direct one-to-one affiliation with their G-League teams, making it feel more and more like a true minor league farm system.

It is not quite that yet. Most players on each team are still considered free agents. The NBA team does not have full rights to everyone on their G-League rosters. About the only players a team has any rights to are the players they send down specifically for assignment. Or any unsigned draft picks who are in the G-League for the whole year (think Tyler Harvey that one year).

The NBA introduced a new kind of player this year. The two-way contract.

It is a tool for teams to retain rights to developing players who may not be quite ready to take on a full roster spot.

In addition to the 15 players on the roster, each team is allowed two players on two-way contracts. That puts some restrictions on how the team may use them — the biggest being that the two-way player cannot spend more than 45 total days in the NBA.

The idea here is it benefits the player by giving him a bigger base salary at the G-League level and the opportunity to play with the NBA roster (at a prorated rookie minimum salary). It benefits the team by keeping the NBA rights to players who are just short of making the roster.

There are several other restrictions in play too. And teams themselves are figuring out exactly how they want to use the two-way contract. Agents and players are figuring out whether to accept them.

This season with the two-way contract is going to be very experimental, to say the least.

Still, plenty of players have already inked two-way contracts. Some in expected places and some in unexpected places. The NBA will get plenty of feedback on how this new tool will work and how teams might use it.

Despite the Orlando Magic having the Lakeland Magic starting up a few minutes down the road, the team has not leaped at the opportunity to sign a two-way player. Their two two-way slots remain open.

Khem Birch’s contract may provide a bit of a clue of how the Magic may use one of those spots.

Keith Smith of RealGM reports Birch’s contract is only partially guaranteed at the start of the year. Eric Pincus of Basketball Insiders confirms Birch signed a two-year $2.2 million contract. The amount guaranteed before opening night — $25,000 — is actually important.

According to Larry Coon’s CBA FAQ, teams may sign players to a two-way contract who were previously on the roster so long as the contract does not guarantee him more than $50,000.

Because Birch’s guarantee is for only $25,000 for training camp, the Magic could waive him after camp and sign him back for a two-way contract.

They could also do the same for Marcus Georges-Hunt, whom the team waived Monday, since Marcus Georges-Hunt’s contract was completely non-guaranteed. This scenario seems very unlikely.

The situation with Birch converting to a two-way contract seems a bit more likely. Orlando, after all, has three centers under contract in Nikola Vucevic, Bismack Biyombo and Marreese Speights. And, for now, it seems more likely the Magic will keep Jonathan Isaac at power forward.

There is always the chance Birch plays his way onto the roster, just as anyone can in training camp. But it seems just as likely the Magic are willing to invest in Birch to keep him in the system with a two-way contract and give him an opportunity during the season as needed and on into next year.

They have at least left that avenue open.

Why would Birch agree to leave guaranteed money with Olympiacos to join the Magic for a shot at the team and a two-way contract? That is a decision that is left to him.

He intimated he would have to work for everything in this stint in the league and he will. But he wanted to be in the NBA and take this opportunity now that it has sprung up again.

What the Magic might do with that other spot is a complete mystery too. Orlando seems to be joining a trend that may grow of teams using their two-way slots to accommodate players they like in camp. As opposed to giving them to Summer League standouts as many other teams have done.

That is essentially what Magic Summer League standout Derrick Walton Jr. did when he signed with the Miami Heat, among many others.

Orlando Magic

It is still unclear exactly how the Magic want to use the Lakeland Magic. It seems possible the team will be sending several roster players down to Lakeland for a period of time.

Wesley Iwundu, especially, seems like a player who would benefit from significant time at the G-League level. Especially considering the team’s logjam on the wing. And Jonathan Isaac will likely see a game or two at that level to build confidence and get more playing experience.

But the two-way contract is something the Magic have not used yet. It would appear they are keeping it open for potential use closer to training camp and with players they may invite to the training camp roster.

They may also keep the slot open or just avoid using it altogether. The Magic’s new management is still setting its course with its G-League strategy.

For now, the main roster is full with 16 players. Patricio Garino and Khem Birch are the only two players with non-guaranteed contracts. So someone is going to have to go in training camp to make a full, legal roster.

Next: Homecoming in Orlando: Happiness and Caution

All signs point right now to the Magic using one of their two-way slots on Birch. Barring anything unexpected in training camp. Otherwise, they are like everyone else — trying to figure out this new tool at their disposal.