The Magic like Matt Barnes, but the team's limited money to spend in free agency and the luxury tax might make it tough for the team to re-sign him (Photo by Gary W. Green, Orlando Sentinel)
Frustrated by the Orlando Magic’s seeming inactivity on the free-agent front?
Well, understand this: There are reasons why the Magic have moved slowly so far.
And those reasons have everything to do with their salary-cap situation.
Already well over the projected salary cap for the 2010-11 season, the Magic will have to parcel out their available exceptions wisely as they attempt to re-sign J.J. Redick and Matt Barnes and add depth at point guard behind starter Jameer Nelson.
It will be critical for the Magic to try to spend as little money as possible on each player, because the cap leaves the team with limited resources to work with and because the team will have to pay another substantial luxury-tax penalty next season.
Waiting for the market to settle might help prevent the Magic from overpaying for some of their own players.
Because the Magic are over the cap, the team has the following exceptions to work with in the days and weeks ahead. Keep in mind that none of the exceptions can be combined:
• Bird exception: This applies only to restricted free agent J.J. Redick. Since Redick played for Orlando for the prior three consecutive seasons, the Magic can use this exception to pay Redick up to a maximum salary.
• Non-Bird exception: This applies only to Barnes and Jason Williams, because they played for Orlando for only the prior season. Under this exception, the Magic can pay Barnes and Williams a salary up to the greater of (a) 120 percent of their salary for last season or (b) up to 120 percent of their applicable minimum salary under the collective bargaining agreement.
Since Barnes made .6 million last season, the Magic can use this exception to pay Barnes up to .92 million in 2010-11.
Since Williams’ minimum salary for the upcoming season would be ,352,181, the Magic can use this exception to pay him up to ,622,617 next season.
• Midlevel exception: The money teams can spend on the midlevel exception will be announced on Wednesday by the league, but its value is expected to be around .5 million for next season. This money can be divided among multiple free agents. Any player can receive this exception, including a team’s own free agent. So, all or part of this amount could be used for Barnes.
• Biannual exception: The Magic can use this exception to sign a player or players to one- or two-year contracts. But the total salary for next season cannot exceed .08 million.
• Minimum salary exception: The Magic can fill any roster spots by signing players to the minimum salaries outlined by the collective bargaining agreement.
So, now that we know what the Magic have to work with, let’s discuss how the Magic can approach each player:
• Redick: As stated above, the Magic can use the Bird exception to pay Redick anything up to a maximum salary. Of course, Redick isn’t a max-salary player. Still, the Magic have the right to match any offer that comes his way.
• Barnes: Barnes’ case is the most complicated of all. The Magic’s biggest nightmare is if a team offers Barnes something far above the .92 million per year the Magic can spend using the non-Bird exception. If that happens, Orlando could use all or part of the midlevel exception to re-sign Barnes. But using the midlevel exception would leave less money for the Magic to land a free-agent point guard such as C.J. Watson to serve as Nelson’s backup.
• Williams: The Magic could use the non-Bird exception to pay Williams up to ,622,617 next season. Or the team can use the biannual exception or even part of the midlevel exception on Williams.
All that said, none of these players’ individual situations can be viewed in a vacuum.
Let’s remember that the Magic will be well into the luxury tax next year. The Magic will have to pay a penalty for every they spend over the tax threshold.
The tax might make it financially unpalatable for Orlando to re-sign Redick and Barnes if both receive rich offers from other teams.
Of course, the Magic still could engineer sign-and-trade deal to acquire a marquee free agent. But to pull off a coup like that, Orlando would have to find a team willing to take Vince Carter or perhaps a combination of Brandon Bass, Marcin Gortat and Mickael Pietrus.
Thank you to Larry Coon for his help dissecting salary-cap rules. Follow Josh Robbins on Twitter at @JoshuaBRobbins and e-mail him at jrobbins@orlandosentinel.com. Subscribe to our Orlando Magic newsletter at OrlandoSentinel.com/joinus.
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