NBA's new TV deal makes it more important than ever for Orlando Magic to spend now

The Orlando Magic face a lot of decisions with their roster this summer.

After reaching the playoffs for the first time behind an All-Star debut season from second-year forward Paolo Banchero, the pressure already seems to be on for the Magic to continue taking steps forward and climbing the Eastern Conference standings.

Orlando is one of the few teams with cap room this offseason—roughly $32 million but potentially near $50 million depending on what the Magic do with certain contracts and cap holds on their books—and is expected to use it to add at least one starter-level player.

There are at least a few options out there—whether it be hunting for big fish like Klay Thompson or Paul George or going for younger up-and-comers like Malik Monk or Tyus Jones. The Magic will have to weigh both which players will fit into their overall plans and how much to pay them to align their books and maintain some cap flexibility.

What the Magic ultimately pay their free agents and plenty more will likely come down to how they assess another factor in their offseason: The NBA's new TV deal.

It has long been anticipated that the NBA would be seeing a massive increase in revenue from their new TV deal. And now the details are starting to emerge.

The league should announce in the coming days or weeks a $7 billion per year television deal with ESPN, Amazon and NBC (dropping Turner's TNT package). The details on when and where games will be on starting in the 2026 season will be released when the TV deal goes public.

But the massive influx of cash is going to dramatically change business in the league.

The new TV deal will have a huge impact on the salary cap

It is expected with this new deal that the league will see the salary cap increase by the maximum 10 percent for the foreseeable future—this was a new provision put into the CBA to prevent a massive spike in the cap like there was when the last TV deal kicked in during the summer of 2016.

If the salary cap indeed comes down at $141 million for the 2025 season, that would mean the cap would likely sit at $155.1 million in 2026, $170.6 million in 2027, and $187.7 million the following year. It is expected to keep going up and up from there.

In other words, one of the biggest challenges this offseason will be to pay players to fit under this year's cap while also acknowledging they will be mostly playing under a new cap environment. Players the team signs to a big contract today may not cost as much down the road thanks to this inflationary effect.

For example, signing Malik Monk to a four-year deal starting at $20 million with maximum five-percent raises would total $86.2 million. That is a decent chunk of change. But his fourth-year salary of $23.2 million would account for only 11.2 percent of the total cap in that final year.

That is pretty reasonable for a starter-level player or even a high-level bench player. Cole Anthony's first year under his extension—worth $12.9 million costs the Magic only 9.2 percent of the projected cap for next year.

Signing Monk to a more generous deal at $23 million with five-percent raises would cost 16.3 percent of the cap in the 2025 season. But by the end of the deal, it would be $26.6 million in the final year and 14.2 percent of the cap.

Again, a fairly reasonable sum to pay a starter-level player. Even if there is some bleeding in the short term.

If Jeff Weltman swings his favorite style of contract—the front-loaded deal—that would create tons of savings on the back end of the deal as the cap continues to increase. Right now agents should be warning their clients away from that or telling them to sign short-term and wait for the TV money to come in and the cap increases to hit fully.

These changes will influence the Magic’s decisions this summer and beyond

For the Magic, it is more advantageous to spend more percentage of their cap now, knowing that it will slowly decrease through the contract's life. The salary cap is going to keep going up—just as it will for everyone.

The Magic will have to consider all of this and think about how they want to align their contracts moving forward.

Because there is another decision to make this offseason beyond free agency. A far more important decision.

Perhaps the bigger task this offseason will be to try to secure young stars Franz Wagner and Jalen Suggs to long-term extensions as their rookie contracts come to an end. All the while, the Magic are preparing for a big contract extension for Banchero next summer.

It is still unclear where the Magic stand with contract extensions. The fan base is divided on whether to give Wagner a max contract. But he—and eventually Banchero—will get new contracts under the new cap environment, albeit at the beginning of that time.

Expect those numbers to be eye-popping.

For instance, Wagner's max contract —25 percent of the cap—would start at an estimated $38.8 million for the 2026 season. A five-year deal with eight-percent raises would total $227.5 million and finish with a final-year salary of $52.8 million.

Banchero's max contract, if he reaches supermax status by making the All-Star Game the next two years, would take up 33 percent of the cap—an estimated deal starting at $56.3 million!

This is all to point out that the money is about to get very large. The new TV deal is going to have a massive effect on salaries around the league.

President of basketball operations Jeff Weltman has already acknowledged that Orlando's time of free spending and cap room is going to come to an end. Every young team has to pay for its roster at some point. While Orlando is not concerned with the luxury tax line, the Magic know they have a small window to spend before that bill comes due. The salary cap's increase will help them only so much.

The time to spend appears to be this summer.

That is why there is so much anticipation for what the Magic are going to do. They likely know that their bill is coming due, and everyone is going to get some sticker shock on what players will get.

That may start this season, as the teams with cap room understand they can spend a little bit more now and still find some savings in the near future.