The Magic will be over the salary cap this summer, but they could shake up the roster with some interesting trades to create more cap room for 2021.
Even among the COVID-19 public health crisis, the NBA still projects the salary cap for the 2020-21 season to be $115M (the tax will be $139M). The Magic project to have about $103M committed in salary for next season. Once the team adds free agent cap holds, the Magic will have about $122M in projected salary and can only sign players through bird rights, the Non-Taxpayer MLE and Bi-Annual exception. This projection also assumes that the team will sign Chuma Okeke, retain its draft pick, and keep Melvin Frazier Jr.
It’s safe to assume Evan Fournier and James Ennis III will opt into their player options this summer and increase the Magic’s salary commitment. There are only 6 teams projected to have cap space this summer and none of them seem like ideal landing spots for Fournier. In sum, the Magic will be above the salary cap with a projected salary of $143M, but should have tax space (the tax is calculated differently).
Even if Fournier and Ennis opt out, the Magic, at best, could only create about $13M in cap space. At that point, it would make more sense for the Magic to resign players to bird rights and use their exceptions to absorb new players, as the value of the exceptions are about $13.5M. Fultz and Isaac will be up for contract extensions this summer, but I don’t think the Magic should offer extensions at this point to preserve cap space if needed for 2021. The Magic also have the added benefit of making Fultz and Isaac restricted free agents
In lieu of free agency, the Magic should be opportunistic on the trade market this summer to find a go-to perimeter scorer. The team could trade for a perimeter player like Zach Lavine, Bradley Beal, or Devin Booker and then use that to start the conversation with Giannis Antetokounmpo, if he becomes a free agent in 2021 (he is eligible for the supermax this summer). Any trade would likely have to include at least two of Gordon/Fournier/Vucevic/Bamba and most certainly a first-round draft pick. Even if the Magic make such a trade, it would still have to clear additional cap space to sign Giannis.
As it currently stands, the Magic could have $43M in cap room in 2021, but that would mean renouncing the team’s bird rights to both Fultz and Isaac, which I don’t see as a realistic possibility. It is possible that the team could renounce Isaac to create more cap room and then sign Giannis, but the team should hold off on doing so until it knows Giannis will sign. Ideally, the Magic wouldn’t have to cut either Fultz or Isaac to create cap room and they could find a deal for Vucevic and Fournier to create additional cap room, while keeping the restricted free agent rights to Fultz and Isaac. Giannis’s max contract would be for 30% of the cap, with 5% raises, over 4 years.
1. D.J. Augustine, Wes Iwundu, Gary Clark, and Michael Carter-Williams