Entering this offseason, the Orlando Magic seemed like a team poised to make a major move.
Here was a team that at least had a sense of who its core could be but had too much youth to make significant progress. They seemed like they needed a veteran and maybe a surehanded shooter to take the leap into contention and help their young group pace themselves.
The rumors started popping up at the trade deadline that the Magic could chase after an All-Star like Fred VanVleet with the cap room they had created.
What did the Magic do with all that cap room this summer then?
There was no major signing — perhaps an overpay on a two-year, $22-million deal for Joe Ingles with a team option on the second year and then a two-year, $16-million deal for Moe Wagner. The team simply flipped its cap space over another year and brought back much the same roster.
The Orlando Magic opted to maintain flexibility and flip their cap space over another year this offseason. Their time to do that is running out as they position themselves for their future.
The Magic’s offseason did not get flying colors and the strongest grades — even from us. But it was still widely praised for being patient and allowing the young players to grow and build on their progress from last season before pushing those chips into the middle.
Orlando’s goal this offseason was to maintain that financial flexibility so it could be ready to make that move. And that will be the case once again.
Keith Smith of Spotrac made his early estimates for teams with the most cap room heading into the summer of 2024 and the Magic are poised to have the second-most cap room heading into the offseason. They would be one of seven teams with projected cap space for next offseason.
Smith reports the league is offering a cautious estimate for next season’s cap, increasing it by about four percent to $142 million (that will likely increase though because the NBA is doing very well).
That would give the Magic an estimated $51.3 million in cap space for next summer. That number would include picking up rookie options for the Magic’s first-round picks — Jalen Suggs, Franz Wagner and Paolo Banchero — and picking up the final year in Jonathan Isaac’s contract.
The team currently only has $32.8 million in guaranteed money committed to the 2025 season. That number jumps to $61.2 million if you include Suggs, Wagner and Banchero to that mix.
Regardless of how you do the math (there are still various cap holds to consider in getting to the team’s final cap space), the Magic will have significant money to spend.
But that cap space is less important than ever. Yes, teams have to spend up to the payroll floor now or else face some actual consequences. Teams will spend. But that is not going to do much to get the kind of impact players on affordable deals that a team like the Magic need.
The Houston Rockets opted to overpay for an aging Fred VanVleet and Dillon Brooks to cement veterans on their young team. They were trying to expedite their process after struggling through last season.
The Magic spent too and will have to spend in the future. But the team opted to stay patient and start lining up their contracts.
Next year’s free agent class is not particularly strong either. And so the Magic are likely in a position to flip their cap room forward for another year or start lining up big money contracts to make a big trade.
That seems to be the path Orlando is likely to explore moving forward.
Everyone senses the Magic are ripe for a trade. They are loaded at guard and have an imbalance between their backcourt and frontcourt. They could also use a lineup upgrade at shooting guard. The team could easily combine some contracts for a big-money deal, especially before extensions for some of their rookies kick in.
That is likely how the Magic spend this cap room in the future rather than signing a player outright in free agency. Most star players do no move in free agency anymore.
So what will the Magic do with this cap room? They will likely use it to retain their own players.
The Magic are likely to spend the majority of that upcoming room on extensions for Markelle Fultz and Cole Anthony — both could ask for starting salaries near $20 million per year, meaning nearly $40 million of that space will get eaten up with cap holds playing a big factor in the final number (a discussion for next summer).
Orlando’s time with this much cap space is running out. The team is going to have to start spending to retain its own players and that is what the team is preparing for.
That is a ticking clock to use this cap room or to align the players on the roster to be better positioned for trades. At the end of the day, it is about salary slots to make those moves. Because, until the team is ready to push all those chips into the middle, they are not going to spend.
Or they are not going to commit long-term. Everyone is spending, as The Ringer pointed out. The new CBA requires that now. And that is why the Magic felt comfortable overspending on Joe Ingles and Moe Wagner to hit the payroll floor and fill up their already full roster.
The question is when the Magic will spend in a serious way to add veterans to the team. They clearly did not believe the team was ready to do so this offseason.
The Magic left themselves in that holding pattern then. They believe enough in their young players to give them the space to grow. They know the salary cap is about to spike — probably not in the summer of 2024 but soon after. So spending now will not have the same consequences as spending later — and extensions for Franz Wagner and Paolo Banchero are certainly looming.
What is clear though is that these finances do lay the gauntlet for the team’s season.
This season is about figuring out who the Magic should keep around and continue growing with. It is about figuring out how to align the players for that time when the team will not have cap room.
Do not think the Magic have wasted this opportunity with cap room though. There were not players worth investing in long term nor was the team ready to absorb the attention of a veteran player. That time is coming as the Magic try to pick up their pace for competitiveness. Everything is moving in the right direction for the team.
Orlando has kept itself open to anything. And that is the larger point of this rebuild.