It would not be NBA free agency without a little bit of chaos.
After a mostly quiet first evening of free agency, the Milwaukee Bucks accelerated the craziness of the league by agreeing to sign Myles Turner to a new contract. In order to do that, the Bucks had to do something that was downright unthinkable: Waiving and stretching the remaining salary for All-Star guard Damian Lillard.
It was a massive move, in one instance freeing up enough cap room for the Bucks to add a key player in Turner, but shocking in the amount the Bucks left on the table to be released from their obligations to Lillard.
To stretch the remaining two years of Lillard's contract meant leaving $22.5 million of dead money on their cap sheet for the next five years. That is a starter's worth of money the Bucks cannot do anything with.
Such is the cost of trying to placate a star and remain competitive with a superstar like Giannis Antetokounmpo.
Few teams are in such dire straits to go to this route -- needing to cut a player and take on dead money to create the cap room to improve. The Bucks may have had no other option.
But it is not completely dissimilar from the situation the Orlando Magic find themselves in.
The Magic are bumping against a hard cap after planning to use the non-taxpayer mid-level exception to sign Tyus Jones to a one-year, $7-million contract.
Including Tyus Jones' proposed contract and projected rookie contracts for Jase Richardson and Noah Penda, the Magic are a little less than $6.8 million from the first apron hard cap. That leaves precious little room to add another player and bring back Moe Wagner, if that is what the team wants to do.
Orlando is walking a fine tightrope. The team may have no choice but to use the stretch provision to get the room necessary to get it all done.
The stretch provision would give the Magic plenty of room
Part of the mystery here is trying to figure out how much money Moe Wagner will get on the open market.
The Orlando Magic declined his $11-million team option in a move that was necessary to slip under the luxury tax and gain access to the mid-level exception. All indications remain that the Magic want to bring him back.
Wagner, coming off a torn ACL suffered in December and likely out until around Christmas if not early January, will obviously face a depressed market because of the injury. But it also seems like the Magic still want to make sure they take care of him -- even if that means leaving a team option for the second year and the possibility of doing this all again next year.
With only $6.7 million before the hard cap, it still feels like the Magic will need to create a little more wiggle room to ensure they sign him and still have room to sign a minimum player at some point during the season -- a hard cap is a hard cap, there are no exceptions to it.
Everyone seems to believe that the Magic may look to make a trade to decrease payroll.
Orlando certainly has options to make trades in Jonathan Isaac and Goga Bitadze. But the Magic likely want to reserve those moves for something more substantial, especially in the middle of the season. Bitadze is essential for now until Wagner is back from his injury, anyway.
The best option seems to be to try to offload Jett Howard's $5.5 million salary. As a former Lottery pick, there is the chance some team will want to take a flyer on him, especially if they only need to give up a second-round pick or some other smaller-salaried player.
The important thing in that kind of a deal is to get off the salary.
The Magic could still use the stretch provision. And this is the example to look at to explain how it works mechanically.
What the stretch provision does is stretch the cap hit of a player's contract over twice the remaining time on the deal, plus one year.
For Howard, then, it would take his $5.5 million salary (declining his team option for 2027) and stretch it over three years for $1.8 million cap hit.
That move alone would give the Magic an additional $3.7 million under the first apron, leaving them with roughly $10.5 million before hitting the hard cap. That should be more than enough to retain Wagner and add another player if the team would like.
This all seems unlikely, however. Wagner's market is still undetermined and the Magic are not going to reshape their roster if they do not have to. If the team needs to clear some money, they would surely prefer a salary dump somewhere than a stretch or to get Wagner within their remaining cap room.
Right now, Orlando is exploring all options to figure out how to make the math work to make all sides happy.
How the Magic have used the stretch provision before
Most of the time stretch provisions are not used on small salaries like Jett Howard's. They are done to clear large salaries that are an anchor on the team anyway. Actually in a similar manner that the Milwaukee Bucks used it on Damian Lillard.
The stretch provision became a regular part of the NBA collective bargaining agreement after the 2012 lockout. The Magic first used it on Gilbert Arenas immediately after the lockout ended, stretching a salary worth more than $22 million over three years.
The Magic also used it to stretch Timofey Mozgov's contract in 2019, paying him out a little more than $5 million for two seasons after the team cut him. Timofey Mozgov was acquired as a salary dump to swap out Bismack Biyombo.
In each case, the Magic made that move to free up the cap room and space to get players in free agency. That is what the Magic are looking to do right now. They will certainly hope for a different way to find the extra money.
Or maybe the Magic will not need it.
But as the Bucks proved, this option is firmly on the table.