2009 Teams With Cap Concerns: Orlando

This post is an update to the previous Magic cap concerns article. A new post was written to take into account the acquisition of Vince Carter and to assess how that changes things for Orlando.

Orlando Magic Salaries

Let’s start off by looking at who is currently on Orlando’s’ books for next season.

Here are the contracts over five million dollars

• Dwight Howard – $15.2 million
• Vince Carter – $16.12 million
• Rashard Lewis – $18.01 million
• Jameer Nelson – $7.7 million
• Mickael Pietrus – $5.3 million

That totals $62.33 million for five players.

Rashard Lewis, Dwight Howard and Jameer Nelson all have four years remaining on their contracts. Pietrus has three years with the final year being a player option. Their new addition, Vince Carter, has three years left on his contract with the final year only being partially guaranteed.

Now let’s have a look at the rest of their contracts

• JJ Redick – $2.84 million
• Ryan Anderson – $1.32 million

These two contracts add up to $4.16 million. Both player are on their rookie contracts, Redick entering his final season of his contract, and Anderson just finishing his first season.

That brings Orlando’s total up to $66.5 million for seven players.

Other costs

• Player Option — Anthony Johnson — AJ has a player option worth $2.06 million. AJ is fairly close to a certainty for picking up this option with Rafer Alston now out of the way.
• Open Roster Spots — The Magic would have eight players if AJ stays. That leaves them with a minimum of five roster spots to fill, which will cost somewhere between $2.375 million and $4.125 million. Since Orlando is contending for a title and needs to fill out the bench, it’s safe to say they’ll be hiring veterans to minimum contracts and that the figure will pretty much be the latter of the two.

Additional costs = $6.19 million

Ergo, Orlando’s total salaries will be a little under $72.7 million.

The Cap+ Luxury Tax Line

We don’t really know what will happen to the salary cap heading into next season, although it looks most likely that the cap will decline (secondary possibility that it holds steady). However, if my memory serves me, I believe I read somewhere that the league was more definitive over the luxury tax and said that it would definitely decrease this summer.

The league handed out a memo just before the trade deadline containing estimates on possible cap figures. That memo had the tax threshold decreasing from $71.15mil to $69.4mil. Here is an extract from ESPN with information on those numbers

On Feb. 18, Stern authorized the dispatch of a memo to all 30 teams projecting a drop in the salary cap from $58.7 million this season to $57.3 million in 2009-10 and a subsequent drop to $56.5 million in 2010-11, with a projected decline for the luxury-tax threshold as well: $71.2 million this season to $69.4 million in 2009-10 to $68.5 million in 2010-11.

For the purposes of these posts — teams facing cap concerns in 2009 — I will be solely using that suggested figure – $69.4 million – from the league’s front office.

Magic versus Luxury Tax

Therefore, the Magic are $3.3 million above the luxury tax threshold.

The Problem – Orlando’s Two Key Free Agents

Orlando have two key free agents

• Hedo Turkoglu — I regard him as their sthird best player following the acquisition of Vince Carter
• Marcin Gortat — Key role player

How much money will those two players command in free agency?

• Hedo Turkoglu is likely to command a contract worth $10 million per annum.
• Marcin Gortat will likely command a contract worth $4 million to the MLE.

Orlando’s Main Options

What are Orlando’s main options?

• Pay a ridiculous luxury tax bill
  
  • The Magic would be around $13 million over the luxury tax line after signing Hedo, for a total payroll of almost $100 million after you account for the luxury tax payments.
  • The Magic would be $17 million over the luxury tax line if they signed both Hedo and Gortat, for a payroll over $100 million.
  • The Magic would be $7+ million over the luxury tax threshold if they signed Gortat but let Hedo leave.

What are Orlando likely to do?

Hedo Turkoglu is gone. There’s no hope of Orlando hanging onto him.

Marcin Gortat is as good as gone too. There’s no point paying that type of money, a minimum of $4 million doubled up, for a backup center who plays 12 minutes a game. It’s ludicrous.

I think the Magic try to keep Gortat if he receives a contract at or under $3 million, but I’m guessing there or thereabouts is the cutting off point.

Where does this leave Orlando?

Starting five – Nelson – Carter – Pietrus – Lewis – Howard

Bench Rotation – Johnson – Redick – Player X – Player X

In other words, Orlando have no bench. They’ve gone from one of the best bench units in the NBA to one of the worst.

Would Orlando spend the MLE?

I think they’d be reluctant to do so. They’d be spending that money on a 20 minute a night bench player, so it’s hard to see them accepting an $11 million hit for that.

Good chance that they spend a portion of it, say somewher around $2.5 million to $3 million.

So Orlando are largely restricted to minimum contracts now?

Yes, pretty much, yes.

They could spend more but they’ll be hesitant to do so. I think it would take a very good player to convince them to open up their wallets further.

What about trade assets, do they have any?

They won’t want to part with their big four.

That leaves Pietrus, Redick, Johnson and Anderson. I think Redick is the only player there that has good trade value, and could be upgraded through a trade. Not much in the way of trade assets.

They have future first round draft picks … not much in the trade coffers.