The Orlando Magic entered this offseason with tons of cap room and plenty of flexibility.
That is one of the benefits of having a team full of young veterans who have yet to break out into All-Stars and several players on rookie contracts. The Magic were still operating with the world as their oyster if they wanted to pursue a big-name free agent or acquire some extra salary in a trade.
Of course, the Magic did none of that. They stuck with much of the same roster, re-upping with Moe Wagner and picking up guarantees for Gary Harris and Markelle Fultz and the team option for Goga Bitadze.
The team added two rookies in Anthony Black and Jett Howard and added a shooter in Joe Ingles. But through all these signings, the Magic maintained their flexibility. They can still make moves next offseason, clearing up potentially $60 million in cap room if they want or to maintain their flexibility moving forward.
The point remains for the Magic and their cap sheet that they can do anything. But the point also remains that this will not be how things stay forever. The Magic will have a big decision to make with extension offers for Markelle Fultz and Cole Anthony due before the season begins or during their free agency next summer.
Things will change for the Magic very soon.
The Orlando Magic spent this offseason maintaining their financial flexibility. The impending free agency of Cole Anthony and Markelle Fultz will begin to change that calculus.
For now, Orlando still has the ability to do anything.
In a recent post on Spotrac.com, Scott Allen listed the “Future Cap Allocations” for all the NBA teams and the Magic are among the teams with the fewest future cap allocations.
Predictably, after picking up yet another max contract player in Bradley Beal, the Phoenix Suns find themselves atop the list. All the way at the bottom, with the most financial flexibility, is the Orlando Magic.
But the Magic are coming up on an inflection point in their rebuild, and some big decisions are on the horizon.
This is mostly made up of the guaranteed money of player contracts, but also nonguaranteed contracts, and player and team options. President of basketball operations has yet to offer anyone any max contracts — Franz Wagner’s new contract is on the horizon in 2025 — and he has maintained flexibility through several favorable contracts and partially guaranteed deals.
The end of the Magic’s financial flexibility will come when they have to hand out those likely max contracts to their two young stars. Wagner and Banchero will be in line for contracts starting at 25 percent of the salary cap or the super-max of 30 percent of the salary should either qualify for an All-NBA season in their fourth year.
It is within reason to think at least one of them would qualify for this increase, meaning those two guys will represent nearly half of the team’s cap when they are both on their new deals — no matter how much the cap spike.
That is sort of the end game of the Magic’s financial flexibility. The mid-game then comes with how the Magic manage the next big cap spikes to their books.
To keep its backcourt intact, Orlando is going to have to spend some money to retain both Markelle Fultz, upgrading him from his $17 million salary this coming season, and Cole Anthony, who will be coming off a rookie contract worth $5.5 million this season and will surely double and perhaps even triple.
This is going to change the Magic’s books and take at least a bite into the team’s financial flexibility and projected cap room. In reality, Orlando is probably going to operate with a similar $20-25 million in cap room next summer.
What makes it difficult is that both Anthony and Fultz have earned consideration to secure their bag before the season begins and certainly in the offseason for whatever they can get.
Anthony has improved his effective field goal percentage (51.6 percent), his finishing and his 3-point shooting (36.4 percent) every year, all while being a top rebounding guard — his 9.1 percent total rebound rate was 13th among guards who averaged at least 20 minutes per game. He is a fan favorite and unquestionably a positive locker-room presence.
Markelle Fultz is the leader of the team, he sets the tone and has the ball at the end of the game. His effective field goal percentage has increased every year to 53.4 percent ahead of guys like OG Anonoby and Jimmy Butler.
Fultz facilitates the offense and impacts winning, as we saw in the team’s turnaround last season when he came back from his fractured toe. The team was 29-28 with Fultz playing his regular minutes and he seemed to continue to get better.
The Magic are going to have to spend on their players at some point. And this question is at the center of how the Magic spend this offseason. What does this team with extensions look like?
That might be skipping some steps. Right now, Orlando has to be planning on what to do with these two key players.
Does the team show faith in its guys and extend them now? This may help the Magic achieve a more team-friendly outcome. Does the team let the season start and risk Anthony going into restricted free agency?
Or worse, what if Fultz has a great year and goes into unrestricted free agency as one of the offseason’s belles of the ball?
In both situations, the team could get into a bidding war that would be fiscally better to avoid.
Given their respective injury histories, does it make sense to extend either player now, before watching the season play out? Which guard is better to retain long-term? Do the Magic keep them both?
On the other side, Orlando may want to wait and see if there is confirmation of how the season ended last year for both players before committing and locking those pieces into place. They may want to see them perform under the bright lights of the playoffs before making a hard and fast commitment.
In the end, it might be the smarter financial play to keep both on reasonable deals. Their salary slots could become important in future trades. And it is better to retain even semi-productive players instead of losing them for nothing.
There will still be negotiations to have. But the Magic could be able to get both on extensions in the neighborhood of four years to tune of $12-15 million per year for Anthony and $20-23 million for Fultz. Both players may believe they could get more with a good season in pinstripes this year.
If Weltman can work some magic and get the agents to agree to a three years plus team option, wonderful. He has done great structuring contracts on team friendly terms that still take care of the players — Wendell Carter’s deal remains a steal that benefited both sides.
Deals like that continue to preserve flexibility going into what would be the first year of Banchero’s new deal and if something changes in the organization, they’re very moveable deals.
The Magic have a ton of financial flexibility, but meaningful decisions need to be made sooner or later.
Although the Magic’s window for real title contention will not open for another couple of years at least, these decisions regarding which mid-size contracts to place around Banchero and Wagner are beginning to carry real weight.