The Orlando Magic opted to find luxury tax savings in cutting Timofey Mozgov. It was another opportunity lost to fish in the trade market.
The Orlando Magic completed their summer workings in one fell swoop.
Within the course of an hour after the free agency starting gun blared, Orlando had come to terms with Nikola Vucevic and Terrence Ross on four-year deals. Dealing with their contract statuses was always going to take the bulk of the Magic’s summer. The Magic added Al-Farouq Aminu with the full mid-level exception soon after.
The team made all those signings official Saturday.
That exhausted all of the Magic’s serious resources to improve the roster. Just one roster spot remained and the team is over the salary cap and likely bumping up against the luxury tax.
Orlando had a lot of needs to fill — their perimeter creation and 3-point shooting were chief among them — and the team opted to address depth needs instead.
Plenty can argue they could have done something else with that spot. But Orlando did not have much else the team could do.
There was only a narrow path for the team to create near-max cap room. But to sign a player of that caliber would require the Magic to renounce all their free agents and stretch Timofey Mozgov‘s contract.
The different avenues and paths the Magic could have walked to create free agency room changed pretty quickly. Orlando had the paths it could walk and chose one.
But it is still abundantly clear the team has to get better and improve. And they had one ace in the hole they could have used to get there. Until Saturday.
In a somewhat surprising move, the Magic announced they had waived Timofey Mozgov. It is likely that they also stretched his cap hit, helping the team stay clear of the luxury tax line and well below the $138 million hard cap. This is perhaps to free up money to re-sign Khem Birch.
But undoubtedly, the $16.7 million Mozgov was owed in the final year of his deal could have been used as a valuable trade chip. And if Mozgov is healthy, he could have filled in as the emergency center until the team deployed this asset.
Orlando though loses that asset in cutting him. They lose that salary chip they could move to bring in an impact player. Instead, they went for tax savings rather than waiting out the trade market.
According to Josh Robbins of The Athletic, waiving Timofey Mozgov allowed the Magic to frontload Nikola Vucevic and Terrence Ross‘ contracts and stay under the luxury tax line (not to mention the hard cap the Magic activated by using the mid-level exception).
With Khem Birch still a restricted free agent, that little bit of wiggle room could help the Magic re-sign him without exceeding the tax or acquire another player in a sign-and-trade for Birch.
Still, it is hard not to think of how this asset could have been used elsewhere. Teams are not charged the luxury tax until after the February trade deadline. There was still time to get under the tax if that was important.
Unless there are dramatic gains from players already on the roster, it is hard to see the team being significantly better. Staying involved in the trade market would have helped the team keep a path to improve without giving up major assets.
Orlando could have been a place where teams could have dumped some still-useful salary.
On the baseline, the Magic’s signings mean they are doubling down on their current roster and their belief it can return to the playoffs. The team’s internal improvement would help the team move forward.
But on the surface, the Magic are a team that is bumping up against the luxury tax line for what is ostensibly a lower-seeded playoff team. Orlando did not get any top-end talent and are virtually the same team on paper. The Magic were stagnant with their offseason.
And there are few avenues to play in the trade market now.
It is going to be hard to trade both Ross and Vucevic on the first year of their four-year deals. The Magic are not likely looking to move any of their core young players in Aaron Gordon, Jonathan Isaac, Mohamed Bamba or Markelle Fultz unless they get a star player in return.
Evan Fournier has two years left on his deal and can still contribute. But the amount of his salary could still prove tough to move if the team is looking to improve that position.
Mozgov’s contract was valuable for that reason.
Orlando Magic
Orlando had a player that was essentially just an expiring contract they could have easily passed on to a new team while retaining most of their other assets. If the team wanted to get in on another major trade — say, like Russell Westbrook or Eric Gordon — it would now cost them valuable assets for the team in the short-term.
Ultimately, it appears the Magic did not feel comfortable going into the tax to retain this team. The tax savings for the team were worth more than the potential trades they could find for Mozgov moving forward.
Maybe there simply was no market to move this contract and expiring contracts like Mozgov’s are not as valuable as they once were. Maybe the Magic understood this is not the right time to make a major play to acquire a big name, deciding to let one of their young players develop into the kind of star that would attract one of these major players further on down the road.
The biggest criticism president of basketball operations Jeff Weltman has faced is his misuse of assets like this. He has passed on some draft picks in key spots that might have helped the team. He has used the draft to make future plays without much consideration for near-term fit.
This is not a fatal mistake. It is a decision and a calculation the front office made.
Avoiding the tax has real consequences to team ownership and would hamper the Magic’s ability to make other maneuvers — especially with the team facing a hard cap this year. Orlando appears to have achieved the goal of avoiding the tax.
Still, there feels like there was an opportunity lost to reshape and improve the roster if it does take that next step forward in letting Mozgov’s contract lapse unused.