The Orlando Magic pushed their chips in this offseason.
They acquired a fourth $30-million player in Desmond Bane and signed Paolo Banchero to a full-max extension. That goes with Franz Wagner's max extension that kicks in this season and Jalen Suggs' fresh extension. At least Suggs' extension is front-loaded.
Orlando will pay the luxury tax for the first time since the 2012 season (Dwight Howard's last season). And, if everything stays on track, the Magic will be a second-apron team in the 2027 season.
That alone comes with several major restrictions that would prevent the Magic from making major changes and additions to the roster. It also means the Magic should be title contenders.
Orlando is not speaking openly about winning a championship simply because the team believes in the talent it has assembled. It is speaking that way because that is the kind of payroll the team has.
The Magic are not likely to take too much of a step back. But this season is big to prove the Magic are indeed on a title track. While it is premature to discuss breaking this roster apart, cap realities have already impacted the team in small ways. They could hit in bigger ways as the team tries to push forward.
The question is whether the Magic will stick to this path and whether the cost will be worth it in the end.
That is something ESPN insider Tim Bontemps doubted on The Hoop Collective podcast.
"The Orlando Magic are insanely expensive already," Bontemps said. "They are below the first apron this year, however with just eight players under contract next year, they are already, according to Bobby's [Marks] numbers, $6 million over the second apron [sic]. When they fill out their roster, you are talking about a team that does not pay the tax very often could be $50 million over the tax. I don't think that's a very long-term viable strategy in Orlando."
The Magic indeed pushed their chips in with the Bane acquisition. They are indeed staring at a massive payroll entering next season. They are likely willing to pay the tax so long as the team is winning.
But this is the question every team is facing in this new world of the collective bargaining agreement. This is what the CBA was designed to do. There comes a point of pain where the tax bill exceeds the point of pain in falling short and spending too much costs the team its chance to win.
Orlando has now flung that door open and have entered a must-win situation. The question is how long does the team want to spend this kind of money. But that is the situation for every team in the league going for a title.
The cap situation
The Orlando Magic are indeed entering the deep waters in the salary cap for the first time in a long time.
They are hard-capped at the first apron this year after signing Tyus Jones using the nontaxpayer mid-level exception. But that still means the Magic are paying the tax for the first time since Dwight Howard's last season in 2012.
They are going to be significantly more expensive in 2027 when Paolo Banchero's extension kicks in -- he will get 25 percent of the salary cap and could escalate to 30 percent if he makes All-NBA. The league's projected tempered rise of seven percent in the cap instead of the maximum 10 percent also makes Franz Wagner's max extension much more expensive than anticipated.
According to numbers from Spotrac, the Magic are projected to have a guaranteed payroll of nearly $186.0 million for the 2027 season. That is assuming Banchero's salary comes at 25 percent of the cap and without factoring in Jonathan Isaac's $14.5 million non-guaranteed salary.
The tax line next season is projected to come in at $200 million with the first and second apron at $209 and $222 million. It is easy to see how the Magic could blow past those amounts quickly if Banchero makes All-NBA and Isaac hits his games played mark to guarantee his salary. Not to mention other team options they will likely pick up and not to mention the Magic contemplating Anthony Black's extension.
That does not even consider who the Magic want to add to their team.
The DeVos family has indeed rarely paid the tax.
They avoided it during Tracy McGrady's four seasons and paid it during Dwight Howard's title-winning teams, going deeper into the tax after the 2009 Finals appearance to acquire Vince Carter, retain Marcin Gortat and J.J. Redick in free agency and sign Brandon Bass.
This is a new era of ownership, though. Rich DeVos is not the chairman anymore. And the Magic made it clear that they are transitioning to their third generation of ownership, a generation that is much more involved and eager to participate as caretakers for the team.
They seem willing to spend and push this team to win and spend what it takes. It may not be useful to look back at the team's history to predict their spending future.
Building a title team
But the reality is that the new collective bargaining agreement exacts a price on everyone. Even the owners and teams eager to spend are not going to be able to spend forever. The way the collective bargaining agreement is structured, it forces teams to make decisions at every turn.
Teams inevitably reach a point of diminishing returns where they are no longer able to improve their team without breaking it apart. The second apron restrictions -- essentially only being able to add players through minimum contracts -- make it too hard to improve the team.
A lot of teams are being proactive about this like the Denver Nuggets were in letting Kentavious Caldwell-Pope walk and giving the reins to Christian Braun. It becomes more important to get draft picks right and supplement the roster with cheap contracts -- it is a reason it is easy to think Noah Penda is a replacement for Jonathan Isaac.
The Magic have built themselves to be top-heavy. Orlando has more than 90 percent of its salary cap committed to its top four players. That is likely not sustainable.
But that means the Magic must win now. Their title window is open. And there is no chance for this team to wait unless they are reducing payroll.