The Orlando Magic were never going to have a quiet summer this offseason.
After an injury-filled 41-41 season saw them face many of the same issues and end in the first round for the second straight year, the Magic are expected to be active to improve their team. They gained confirmation that their two stars can compete when the pressure is ramped up, and they can clearly see the flaws that need correction.
President of basketball operations Jeff Weltman has promised that the team would make moves with a "win-now lens" as the Magic seem to put winning more in the crosshairs than the development tack the team has taken for much of the last four years.
With Paolo Banchero and Franz Wagner establishing their potential for stardom, the Magic certainly feel ready to strike.
But they are working under some strict financial restrictions. Unlike last year, when the Magic entered the offseason with loads of cap room to spend, they have precious few resources to add to the roster.
The Magic are expected to be a tax team next season at minimum and a potential first-apron team. That severely limits their ability to chase free agents. Most of Orlando's work this offseason will likely come from trades. The Magic are likely scrounging the bottom of the barrel for free-agent bargains.
But the Magic still have a path to enter free agency. With the recent reporting that Orlando could be one of the teams sniffing around for Minnesota Timberwolves guard Nickeil Alexander-Walker this offseason.
To do that, Orlando has to jump through some hoops and make some sacrifices in the process.
So how do the Magic maximize their free agent spending? There is a way for the Magic to gain access to the non-taxpayer mid-level exception and some ability to spend in free agency?
It will take some work. But Orlando can get there and maximize some spending power in free agency. That does not come without some consequence though.
Orlando will see major increases in payroll this year with Franz Wagner and Jalen Suggs beginning their fresh extensions signed last year. The Magic also plan to give Banchero his own max extension.
The team is dealing with the realities of both paying the luxury tax and flirting with the restrictions that come with the first apron. This is not a summer to go on a spending spree and add tons of future financial obligations.
Hitting free agency comes with its own set of consequences. It requires a lot of planning on the Magic's part.
The Magic are slated to have $175.2 million in guaranteed salary next season. That includes the estimated max extension for Franz Wagner, that will start at an estimated $38.7 million.
That leaves the Magic already above the $154.6 million salary cap. it leaves them about $12.7 million below the $187.9 million luxury tax line.
That would give the Magic at least some access to use the non-taxpayer mid-level exception -- a tool to spend beyond the salary cap worth at most $14.1 million.
But to get that much wiggle room, the Magic have to decline all team options they have pending this offseason. That would be Moe Wagner's $11 million, Gary Harris' $7.5 million, Cory Joseph's $3.5 million and Caleb Houstan's $2.2 million. Orlando owns Bird Rights on Wagner, Harris and Houstan so the team could decline those options and still re-sign them.
Orlando can indeed create some room under the luxury tax line and offer a roughly $12.7 million contract to someone like Alexander-Walker, if the team gets there.
Still, even that comes with some consequences. Using the non-taxpayer mid-level exception would hardcap the team at the first apron of $195.9 million. That is inviolable for the team to overcome.
That would leave about $20.4 million to spend in total if the Magic dip below the tax. That would mean the Magic would not be able to sign Alexander-Walker and bring back Wagner on the same salary the team had just declined.
These are some of the tough decisions the Magic would have to make. Spending the mid-level exception might bring in a quality player, but it comes with another cost.
And then, eventually, Orlando has to look ahead to the 2027 season when Banchero's extension kicks in and the team wades deeper into apron territory.
Orlando has $99.9 million in guaranteed salary for the 2027 season before accounting for Paolo Banchero's extension or Kentavious Caldwell-Pope's final year on his three-year deal. It does not include Anthony Black's $10.1 million team option for the final year of his rookie contract either.
Banchero is set to make an estimated $42.5 million if he fails to make All-NBA and $51.0 million if he makes All-NBA. Assuming they pick up all of those options and Banchero makes All-NBA to receive the supermax, the Magic's guaranteed payroll is already at $182.6 million.
The luxury tax line is projected to be $206.7 million and the first apron is projected to be $215.5 million. Orlando would stil have $24 million in wiggle room before the tax and $33 million before the apron. But a fresh contract for a free agent and Moe Wagner's new deal -- not to mention any rookies or trades that add to the payroll -- eat into that quickly.
Orlando has to consider how much the payroll might balloon with every move. Clearly the Magic can keep themselves under the first apron, but they cannot freely spend or add salary.
The Magic should be exploring every avenue to improve. That includes looking into this path with free agency. If the right target is available -- and there is a signal the team can get him -- the team should pursue it.
But it comes with major consequences. Especially as the Magic's payroll increases and their young players become much more expensive.
Everything will get taken in turn. Orlando will hit the trade market and know what the landscape looks like on draft night before hitting free agency and making final decisions on those team options -- Wagner's team option deadline is June 29.
But the Magic have to navigate a tricky landscape. They must know their targets and execute their plan to find success.