The Orlando Magic again will not have much cap room to play with this offseason. But their Nikola Vucevic decision will set the course for their offseason.
Orlando Magic president of basketball operations Jeff Weltman has had to be patient in his first two offseasons in charge. The team was stuck in a cap hole after the spending spree of the summer of 2016 and still had work to do to wait those contracts out for some cap relief.
The team worked on the margins to add players and try to boost the roster. Most of Weltman’s work has come behind the scenes and with the infrastructure of the franchise.
Arguably his biggest move has been to add Steve Clifford as the head coach. When it comes to personnel the biggest investment he made was re-signing Aaron Gordon to a four-year deal.
That was a no-brainer. The Clifford hire took some nuance and paid off. Weltman also took a calculated gamble in adding Markelle Fultz at the trade deadline. That added some salary to their books but gave the team an extremely talented player to grow into the point guard position.
But there is new pressure now for the Magic. The team made the playoffs and raised expectations. Fans are optimistic about the team and everyone has tasted success now. They want more. The Magic certainly want more.
And while it feels like the team has a clear future, it is not that clear at all. At least not to continue directly what the Magic built in the 2019 season.
This summer comes down to the decisions to re-sign to key players that made that playoff run happen. But both players may not necessarily fit the ultimate vision of the team. But they are important to the team’s present.
There is a thin needle to thread to bring everyone back and still keep flexibility for the future. They can have their cake and eat it too. But it will take some good negotiating and a willingness to make change when the opportunity arises.
The Magic are still a team operating like they are over the cap. With the players they want to return and the salaries — some of them very big — still on their books, the team is not going to be able to throw around money this offseason.
But they still have the ability to do so if certain things fall into place. Orlando is going to have to make their plans quickly.
Every decision springs from whether the team is able to re-sign Nikola Vucevic.
From there, decisions begin to fall in place.
The Books
Before getting to any of the key decisions the Orlando Magic have to make this season, it is important to lay out the books for the team.
Orlando currently has $83.8 million in guaranteed salary for next season. Aaron Gordon ($19.9 million), Evan Fournier ($17 million) and Timofey Mozgov ($16.7 million) account for $53.6 million of that. That is 64 percent of their committed salary!
The salary cap for the 2020 season is expected to fall at $109 million. So the Magic are already at 76.9 percent of the salary cap in guaranteed salary before the summer even really begins.
Orlando has $25.2 million in cap room taking into account their guaranteed salary. But that will get eaten up quickly.
Orlando Magic
The Magic’s 16th overall pick is guaranteed at least $2.2 million (that will increase this year by a little bit). So that is another bit knocked off the account.
Then there are the free agents the Magic want to retain.
They have cap holds so the Magic can retain their rights and go over the cap to re-sign them if they choose. Those cap holds eat into the remaining cap room to reserve their spot on the roster and prevent teams from waiting to sign their own guys at the end of free agency.
Nikola Vucevic and Terrence Ross are coming off relatively team-friendly deals and both expect a bit of a pay raise. Nikola Vucevic’s cap hold is $19.1 million and Terrence Ross’ cap hold is $15.8 million. Add in Khem Birch‘s cap hold at $1.6 million and the team loses an additional $36.5 million in cap room.
If you are doing the math correctly, the Magic lose all their cap room if they want to re-sign both Vucevic and Ross. The team can go over the cap to re-sign both because they hold their Bird Rights.
The team will operate over the cap if they want to re-sign these players. And both Vucevic and Ross are likely to command more than their respective cap holds (maybe Ross falls a hair below it).
But that will leave the team with few avenues to get better around them.
If the Magic are not able to re-sign both or either, then they do open up some cap room. And Orlando can free up some cap room with some other moves too — especially if they stretch Timofey Mozgov’s contract (more on that a bit).
Vooch and the future
It is probably a bit too reductive to say that everything this summer revolves around the decision whether or not to re-sign Nikola Vucevic. And then beyond that how much and for how long they choose to sign him.
Vucevic is coming off a four-year, $48-million contract that at the time was considered extremely team friendly. Vucevic was coming off a serious concussion and a spate of injuries and took an extension before even hitting free agency. He was still establishing himself in the league.
He far outproduced that contract value — no matter what anyone thinks of how he fits with the team or the modern NBA — even before his breakout 2019 season. There, Vucevic averaged a career-best 20.8 points per game and 12.0 rebounds per game.
His All-Star bid was part and parcel to the team finally breaking through and making the playoffs. Something Vucevic certainly had waited a long time to do in a Magic uniform.
It, of course, came in a contract year too. Pressing further questions for the Magic. Especially considering sixth-overall-pick Mohamed Bamba is waiting in the wings. It is not entirely clear if the Magic will keep their All-Star center.
Certainly, no one, even Vucevic supporters as Vucevic has become quite divisive among fans, is willing to throw a max at Vucevic. But Vucevic also probably understand this is his last chance to get a big contract — especially since he took such a sweetheart deal in his first run through free agency.
Vucevic is 28 years old and in the prime of his career. A four-year deal would put him at 32 years old at the end. Perhaps near the tail end of his prime. This is his chance to strike rich.
The going thought is the Magic will determine the number and the years they will offer Vucevic and hold firm on that should the market give Vucevic more if he should walk away from that number.
It is unclear what that number is. But it is safe to assume it will be north of $20 million. Re-signing Vucevic then would almost take up the entirety of the Magic remaining cap room.
If Orlando re-signs Vucevic, the team is likely left only with the team’s nontaxpayer mid-level exception — a contract, or combination of contracts, worth $8.6 million in the first year for the 2019 season.
You can still get a decent player at that amount. At $8.6 million, you can find players like C.J. Miles, Julius Randle and Davis Bertans.
But that limits the pool significantly. The Magic’s summer this year comes down to whether they re-sign Vucevic or not. If they do, they will have only the mid-level exception to work with (virtually).
If they do not, they will have enough room to add a potential starter, unless they sign Terrence Ross to rich contract.
Making Max Room
Of course, the Orlando Magic could go after a big fish. They have already been connected via rumor to Kemba Walker. The team would seemingly be out of the running for signing an All-Star with all the information already presented.
There is just little cap room if the Magic want to retain any of their remaining players.
But as also noted, the Magic have $25 million in cap room just based on their guaranteed contracts. That is not max cap room, but it is close.
If the Magic let all their free agents go and traded away their draft pick, they technically do have something near-max cap room. A few trades on the margins and all of a sudden, Orlando could be in the running for one of these players with still their mid-level exception to use to bolster depth.
That is plausible, but not likely a realistic play for the team.. The Magic are not going to spend all of their cap room on one player. That would leave them exposed at center without a trade to replace Nikola Vucevic.
But it is interesting to dream.
Losing the cap holds for Vucevic and Ross, releases $34.9 million in potential room. That creates that full $25 million in room they have with just their guaranteed salaries.
They can get further room if they find a trade partner for Evan Fournier and take back less salary. He makes $17 million per year. Then they could create more cap room by stretching Timofey Mozgov.
Mozgov is owed $16.7 million this year. And the Magic face a decision with what to do with that.
The Magic could just eat the final year and take on the savings next year. Orlando has $18.1 million guaranteed for the summer of 2020. Even adding a moderate $21 million contract for Vucevic and the second year of the 16th overall pick — roughly $3 million — and the team still only has $42 million in committed salary.
With the cap expected to make another leap near $120 million in 2021, the Magic would have a ton more cap room to add a free agent to bolster their roster. If that is what they want to do.
All signs point to 2020 as the year the Magic want to hit free agency. Although that market is not as robust as this year’s market. It might be too difficult to resist at least trying to see if one of the big stars would entertain them.
This is where Mozgov’s contract comes into play. If the Magic stretch Mozgov they can create a little bit more room.
The stretch provision allows a team to spread out the cap hit of a selected player for twice the remaining length of the contract, plus one year. So if the Magic stretch Mozgov’s contract, their books would show them responsible for $5.6 million for the next three years.
Stretching him would free up nearly $12 million in potential room. If the Magic still find themselves with work to do to fill out the roster and are short on cash, they can use this tool to get themselves a bit further under the cap.
Those savings could help them get to a number to fit a max contract. It is still unclear which direction the Magic will head.
What to expect
It is still not clear what direction the Orlando Magic will go this summer. Everything it seems depends on their decision about what to do with their current free agents — especially Nikola Vucevic and Terrence Ross.
If the Magic sign them both, they will have little more than the non-taxpayer mid-level exception to spend in free agency. That is not going to get the Magic much in the end.
If the Magic let one or both walk, they will have a limited amount of money to spend to replace them. But it should still be enough to get a starter-caliber guy. The team could get even more money to spend if they stretch Timofey Mozgov’s final year of his contract.
The Magic, on their face, do not have a ton of maneuverability for free agency outside of handling their own free agents. But they can wriggle some extra cash free and get themselves into the market for a high-level player if a few things happen.
There are already at least a few rumors the Magic might do this. Whether Orlando goes down that path likely depends on whether they can get that commitment first.
On that same token, the Magic have made it clear that negotiating with Vucevic is their primary objective in free agency this year. They will try to bring him back first on an agreeable contract before doing anything else it seems.
Orlando will know fairly early into free agency whether they will be able to retain him and what path they will have to go next. Orlando can go over the cap to re-sign Vucevic, but the team will not be able to go after many bigger-name players without renouncing that right.
And that is the pickle the Magic are stuck in for this free agency period. Orlando has to balance trying to bring back and retain the team that made that surprising playoff run with doing the work necessary to improve the roster. It will not happen in one fell swoop.
Perhaps Orlando can foresee having more room to spend in 2020 and can gamble that running this team back can entice a player to join the team then. Jeff Weltman can flex some of his negotiating muscle then.
The 2019 offseason is really more about balancing the present with the future and keeping that cap flexibility. All the while keeping the team in the playoff conversation.
Without much money to spend to do that, the Magic will once again work on the margins unless they are forced to make a bigger move.