Orlando Magic still searching for cap flexibility even after Timofey Mozgov’s waiver

The Orlando Magic got a minor gift when Timofey Mozgov’s salary was taken off their books. But the team is still hunting for some cap flexibility.

The Orlando Magic got an early Christmas gift last week.

It was more like the gift a grandparent gives a child who does not know any better. That envelope full of bonds or stocks that you will not realize for a few years down the road. Paper money that will one day actually get to your pocketbook when you mature.

That is what the Magic got when the league granted an injury exception, wiping Timofey Mozgov‘s contract from their cap sheet. Shams Charania of The Athletic was first to report the decision from the league and it has been confirmed by others:

The Magic acquired Timofey Mozgov last year in a deal to send Bismack Biyombo and his large contract out and acquire Jerian Grant as a flyer for backup point guard. That flyer did not work but it did not hurt the Magic financially (Biyombo ended up picking up his player option).

That $16.7 million salary still sat on the team’s books. Needing some extra space underneath the luxury tax to re-sign Nikola Vucevic and Terrence Ross, the Magic opted to stretch and waive Timofey Mozgov’s deal. That put a $5.6 million hit on the Magic’s cap sheet for the next three years.

The league granted the Magic an injury exception because he did not play last year. And, despite signing with a team in Russia, the league, the players union and their doctors determined he would not be able to play at a NBA level again.

That nearly $6 million seems small, but it is not insignificant. Stretching that salary kept the Magic’s playoff team together and helped the franchise avoid the luxury tax this season. Now the team can breathe a bit easier.

But that flexibility could change greatly this summer. While the Magic are not projected to have much cap room this summer. The savings from Mozgov’s waiver will come most in the summer of 2021.

But a big decision will come before then. And the team will have a lot of salary to sort through before then. The Magic’s cap savings are not going to be fully realized. The team still has some maneuvering to do.

In the short-term, Orlando is no longer bumping up against the luxury tax line. The Magic’s current total salary is $123.3 million this year. That is roughly $9 million below the tax line. That does not sound like a lot, but considering the $5 million from Timofey Mozgov’s stretch deal essentially prevented the Magic from signing Chuma Okeke to his rookie contract. The Magic wanted to maintain some room to sign additional players during the season if needed.

Orlando now has that room to add a player this season in free agency without risk of dipping into the tax.

The real thought is preparing for two big offseasons of team building to help push this team to the next level.

Orlando’s current guaranteed salary for the 2021 season is $96 million with a likely option for Evan Fournier picked up at $17.2 million to bring it up to $113.1 million. The Magic will be roughly $3 million beneath the salary cap. But adding in Chuma Okeke’s rookie deal will put the Magic above the salary cap.

Orlando will be significantly below the luxury tax line. And that is the point for the moment.

Barring any major trades — and the Magic would not be able to take on a lot of salary in any trade because of their cap situation — the Magic understood that free agency last summer was going to lock them into their team for the next two years.

And that might be the bind the team finds itself in entering this summer’s free agency.

Next summer’s free-agent class is not particularly strong. Evan Fournier might be emerging as a potentially strong free agent in that class if he continues his scoring binge of late.

Fournier has a player option worth $17.2 million for the 2021 season. He could become a free agent this offseason if he opts out of his contract.

Considering he is averaging a career-high 19.8 points per game and shooting a career-best 44.7 percent from beyond the arc. His run since Nikola Vucevic went out with an injury has been even more impressive.

Fournier may not maintain these All-Star levels, but he is playing extremely well. And that could put the Magic in a bind.

Not many teams will have cap room in the summer of 2021. Not only that, but there are not many top-end free agents.

Fournier could very easily opt-out of his deal and seek a bigger, long-term deal coming off a career year from one of those teams. Or even force the Magic essentially to extend his contract. It is not like the Magic will be able to find shooting to replace him and stay competitive.

Orlando Magic

It is easy to see how quickly the Magic could get caught up overcommitting to a key player. At some point, the Magic will have to make decisions and move this team forward. Internal development alone will not do it.

Where Mozgov’s cleared salary will really boost the team is entering the Magic’s critical summer in 2021.

That summer Fournier is expected to become a free agent. That will also be the summer Markelle Fultz and Jonathan Isaac become restricted free agents too.

Orlando will have a lot of money the team will have to spend that summer regardless of how else the team shifts and changes.

As things stand, the Magic have $70.7 million in guaranteed salary and likely options for the summer of 2021. The cap holds for Jonathan Isaac and Markelle Fultz will total $52.5 million. The Magic will have roughly $123.2 million committed to the summer of 2021. That will put the Magic right at the projected salary cap of $125 million.

And this is before dealing with Fournier’s potential new contract, either this summer or next summer. Orlando has a little more flexibility, but not a whole lot more.

The team’s best path to improve itself remains through internal improvement and trades.

Orlando will not be able to come into significant cap room in the near future with the way their salaries are structured. That is not necessarily a bad thing. Right now, the team is lining itself up to spend big to retain key young players in Isaac and Fultz during the summer of 2021.

But it will require some shrewd maneuvering and striking on the right deal to make the most of these young players and their playoff potential.

The Magic did get a much-needed gift in freeing up that money committed to stretching Mozgov. But there is still work to do to clean up Orlando’s books and president of basketball operations Jeff Weltman and his group will have some big decisions to make as they map out this franchise’s future after last year’s playoff appearance.