[Music] [Music] Closer closer closer closer closer closer. What's going on, Magic fans? Welcome to another episode of The Closeup, a part of Orlando Magic HQ. My name is Stephen Cameron, and today we have a really good show. We got Keith Smith of Spot Track Front Office Show. He is an awesome awesome guest. Keith's been on the show many times. We talk about the Magic's financial situation going into the offseason. It's a deep dive. So, if you want to understand where the Magic are at salary-wise, how different aprons will affect them, the first or second apron, and how they can move around those aprons to get players to improve this roster, this is the show for you. It was a long conversation. We're going to split it over two episodes. So, you'll hear part one today and then you'll hear part two on Friday when we release the second episode. It's a really, really good conversation. Keith is so smart about all this. He actually teaches this show or teaches the the CBA and and all this stuff. He's he's in a workshop course this summer with Bobby Marks and a bunch of other cap specialists, Eric Pinkis. Um, it's we talk about that, too. So, if you have interest in that, you know, tune in. But it's a it's a really good conversation that we have and Keith does such a great job of explaining things in a very easy and digestible way. So if you have confusions about what restrictions the Magic might have, this is the show for you. We even talk about the Magic's player contracts that they currently have and if are they negative value, are they equal value or are they positive value? So we you'll get to hear a good amount of that if you're like, "Hey, I wonder what player X would be in a valued in a trade." Hey, we we talk about that a lot in this episode. So, I think you're really going to enjoy it. For those of you that are curious about how the Magic will improve this team this summer, cuz you know, we heard Jeff Welman say they're in win now mode. They're looking to improve the roster, improve the offense, and you know that this is a big summer for the Magic to take that next step and be more than a first round exit team. So, I hope you all enjoy the show. If you want to find any more of Keith's work, please check the show notes on either YouTube or whatever podcast app you are listening to. You will see links to his content and where you can find his work down below. And as always, please make sure you are liking and subscribing to our channel, whether you're watching it on YouTube or give a review on your podcast platform. It really helps us in the algorithm. And if you want to consider supporting Orlando Magic HQ in a bigger way, check out our Patreon program for a small monthly subscription. You get extra content, you get integrated into our community, uh, group chat, and it just helps us continue to do things and operate at a high level. So, we thank you for listening and tuning in, supporting HQ, and we hope you enjoy this conversation with Keith Smith. All right, everyone. Like I said, we got my man Keith Smith. He comes on regularly during these times of the year, you know, off season, trade deadlines. He's my go-to guy for any cap related stuff. Keith, good morning, man. How you doing today? I'm doing well. Thanks so much for having me. Yeah, of course. These are always my favorites. We always say we're going to talk short and then they always go really long. And uh we'll see how we do today. All right. Um how you enjoying the postseason so far before we get into all the Magic stuff? How are you enjoying the, you know, the the semifinals going into the finals? Yeah, it's been crazy. I mean, we've had all these nuts, you know, uh, finishes like they've just been, you know, completely bonkers like games and it's that that's made it a lot of fun. I had that the game one of Pacers Knicks, the the Aaron Smith, you know, making everything down the stretch, then Hallebert and that ball was in the air for so long after it hit the back rim before dropping through. And then the Knicks kind of took control early in the overtime and the Pacers had to find their poise and come back to win it a second time, I guess, is the best way to put it. Like, yeah, a lot of fun. It's been a really fun playoffs. It seemed like there was Steph Curry on the court for a minute and then that Kawhi Leonard moment in 2019. That's kind of what I felt was happening right then and there. And it like as soon as that ball hit, I'm like, "This is going in. It's it's gonna go in." It just it felt like um it felt so much like that that moment in 2019 with Kawhi Leonard versus the 76ers to get them to the finals. Obviously not as dramatic cuz it wasn't as many bounce but with how high that one got into the air and going back in it was like it had the same kind of dramatic feel to it and you know it would have been probably just as crazy feeling if it was a three-pointer. He was on the by like a half inch he was on the line. Um, but yeah, it's been a lot of fun. Who are you going for? Your Celtics are out. My Magic are out. Who do you Do you have a pulling interest one way or another on any conference? No, I don't care really at all. I just want whoever it is to get through healthy. Yeah. So that we have a uh, you know, really fun um, finals. Like like that's all I really want. Like I just don't it doesn't matter to me with like who gets there or anything. just get there healthy and have a good finals. I all four of these teams I don't really have any major emotional feelings towards any of their players too much. Obviously, there's some fun players and whatnot, but I just like there's no like crazy ex-Magic player that plays for them. So, there's just not a lot of emotional pull either way. So, it's it's more like one of my closest friends is a Wolves fan. It'd be nice if he was happy. He's probably not going to be happy, but it'd be nice if he was. And so, that's kind of how my my rooting interest went. But, yeah, I'm like you. I just want healthy teams, good competitive series, a strong uh a strong finals matchup. Oh my gosh, my phone's going crazy. Yeah. So, all right, cool. And I know you have a busy summer going on because this is when your work continues to ramp up, getting ready for transaction season, getting ready for new contracts coming out. Uh you're also participating in the the Las Vegas, what is that? What is that actually called? Sports business classroom. the sports business classroom. You're one of the instructors on that. That sounds like a really cool program. By the way, I was listening into the uh to the little workshop, the 45 minute hourlong workshop that Bobby Marks and um I forget the other person's name, but they hosted. Yeah. Eric Pinkis. Like I I listened to that for uh an hour the other the other week when they did that like kind of preview of what to expect of the workshop. That seems fun. What is your role within that workshop this year? Yeah. So, we'll be helping folks learn the salary cap in the CBA. So, uh the students who sign up generally the vast majority of them would like to work in basketball one way or another. So, they come out, they spend a week with us at summer league. Uh they get immersed in summer league. There's about about eight hours a day of classroom learning where we go over a lot of different things. Students are asked to to pick a major so they can major in in the CAP and CBA. They can also major in like data and analytics and scouting. And then there's a group that can do media and broadcast. And then there's a new group this year that's it's more around agents working both at the professional and collegiate levels with the advent of NIL becoming such a big thing in college basketball that that there's a lot of people who can do that. So there's by no means a guarantee that if you finish the program, you'll get a job in the world of basketball, but it'll open a lot of doors for you. And as I've been putting it to folks who have been asking me about it, if you want to do it, it will open the door for you, but it's up to you to put the work in and then step through that door. Yeah. You know, no one's just going to hand you anything at the end. But yeah, it's a lot of fun. It's uh, you know, it's really intense uh week of learning. Uh the weekends all the students no matter what their major is take part at the end in a mock trade deadline uh competition where we have students covering all the teams and they they basically go out and then they make a bunch of mock trades and and then they have to present why they did what they did for their team and where they felt, you know, hey, we're on the way up so we wanted to make an all-in move to go chase the title or we're trying to rebuild or whatever. And then then there's a group of judges uh folks from within the league and folks from in the world of basketball and they judge them and it's a fun little competition to wrap up the week and they can put together all the kind of things that they learned throughout the course of the week in their majors and in the general sessions. So I'll be there helping everybody learn and we're excited for that. I I was looking into it this year. I'm not gonna be able to make it this summer with just some other family plans that we have going on, but it's it's one of those things where I'm like, man, I'm not really trying to work in the NBA at this point. like my my career that I'm down is is pretty fun and I am enjoying it, but it would still be so nice just to like be in that environment and get those deep dive conversations and those learning experiences to just be even better understanding the game of basketball from the perspective that I enjoy analyzing it from. And so, yeah, I think that's so cool that you guys are doing that. Um, all right. Let's talk about some Magic Basketball for a second because that's what we're here for and that's what the listeners are wanting to do. So, before we talk about the off season, I would love to get your opinion on just general thoughts of last year. Obviously, we know there was some good expectations for them to be a pretty competitive team after their nice seven round series versus Cavs the year prior. and they came in healthy, made a big acquisition in the summer getting Contavius Caldwell Pope, who was one of the higher, you know, kind of sought after free agents in that class, but then, you know, classic Magic injuries throughout the entire season just kind of derailed. They held it together enough to be in the, you know, the playin, won their game, got the seven seed out in five verse Boston Celtics. When you look at last season, what are some of the things that stood out to you about this team? Yeah, I think for the Magic in general, this is going to sound weird in a season where they went 500 and were out in the first round, but I think it was still a pretty good season for them. They could have very easily when Pollo went down, then Fron went down, and then just other guys were in and out of the lineup. They could have very easily said, "It's not our year. Let's punt. We'll take our lumps. We'll get another high draft pick, and we'll get back at this a year from now." But they didn't. They kept fighting. They They kept playing well. Felt like for a little bit there, the more guys who were out, the better they played, which is completely backwards from the way it should go. But I thought, you know, then when Paulo and France came back, they really kind of went to a different level. I thought the second halfish of the season, I'll say is because it's not exactly second half, but they played really well down the stretch. Unfortunately, Jaylen Suggs them went out, they were able to fight. And then in the playoffs, even though it was a short series in the terms of games, they were competitive in all but really the one game that they were right there. And I think this is good to see a couple things, right? One, they had enough depth and enough fight and the coaching staff. I know there's a lot of Magic fans who are critical of them, but they kept them together and they fought. They were able to get to the playoffs. Then in the playoffs themselves, you got to see, all right, Paulo's the guy, right? Like now, no questions asked, he is the guy. He went against the defending champs when they were mostly fully healthy and gave them everything that they could have ever wanted. Fron is a really, really good number two. And now from here, it's let's figure out all the rest of it, right? And it's not that we didn't already know those things. NBA history is littered with guys who have had one good playoff series in their career. Now we're a couple in and it's like, "All right, we feel pretty good about these two. Now let's figure out all the rest." And that that's not a bad place to be. Bismac Bybo got an $80 million contract off of one good playoff series. So that no, I agree. I thought many aspects of the Magic season were successful despite all the adversity they went through. I mean, you look at other teams that had the same type of major injuries the Magic went through. talking about like the 76ers, talking about the the New Orleans Pelicans, teams that went into last season expecting to be like really competitive playoff level teams and they tanked both I mean not tanked but they cratered and both of those teams ended up being you know lottery teams um you know like some of the worst teams in the league and for the Magic to have those same similar types of games missed to such key players and to maintain a top three defense the entire time which kept them competitive. Like it wasn't their offense. We know it was their defense but like you said there was a week where it was a couple weeks where it was like yeah most of the roster's missing. They're playing two-way guys and wow they still beat X team this night. Like it was wild. It was wild to see. But yeah, and then you're right, you know, getting more clarity on the the key guys because, you know, we we watched the Cleveland series last year and Fran had a couple of really nice games, but he also had some other games where you're like, where are you going to fit within this? And then now this year we've seen, no, no, dude, you're you're going to be awesome and we know you are clearly that. And some of those questions have been answered within that. Um, and then, you know, I think it was like a good experience for younger players like Anthony Black to kind of get some real reps in and meaningful games in the playoffs, whether he's with the Magic longterm or not. You know, just a great development opportunity for them. And I'm also of the believer that the more highlevel competitive basketball games you can play, the better the players that are going to be around long term will be because of that. So, when we we've all kind of digested, it's been a few weeks now, but we've all had time to think and digest some of the comments that Jeff Welman and the staff made in exit interviews where they are now kind of transitioning to win now mode. When you look at this Magic roster and the comments of Jeff Welman, not just that, but he talked a lot about, you know, how trades are part of their transactions and the way they're going to be moving this team and how, you know, there was a clip about him talking about, yeah, we might have to sacrifice some defense for offense. When you hear those comments and then you kind of look at this Magic roster, what are some of the thoughts that come into your head just on how they can improve? Yeah, I go back to So, let's start with the whole idea of we might have to give up some defense for offense. I think about the Knicks from a few years ago, the the team that signed Evan Forier when he was a free agent and they when they signed him, it was we need to get better offensively and that that was it. It didn't end up working out, but at the time Forier was a consistent 17 18 point per game guy, pretty good shooter, could create his own looks, all those things. Nice secondary, third Paul handler. Yeah, exactly. And the Knicks were in a spa where their defense was elite and they needed to get better offensively. But what ended up happening was they took a defense that was way up here and brought it down to like here and they took an offense that was way down here. They brought it up like here. It didn't it didn't equalize. So that's my thing with the Magic is you have to be careful, right? What makes them special right now is the defense. They are an incredible defensive team. there. You know, you know, one of the best defensive teams in the league. I get it. They have to get better offensively. They have to add more shooting. You know, we got to figure out what goes on when guys get off the plane. I I think there's some magic portal on the trams at MCO that makes them lose their uh shooting ability. I don't blame the Yeah, exactly. Yeah. I'm not sure what happens, but something happens when they get here to Orlando. But I think, you know, you just got to do this in a careful way. And I trust that they will be, you know, there. Now, the it's time to move forward. It's we're we're contenders. It's win now. Whatever phrasing Jeff Welman used and you want to use, I 100% agree. They can no longer be baby steps, baby steps. It's time to time to push in because what happens in the NBA and I'm not saying that this is Orlando's in danger of this today, but if we're two years from now and Paulo's still sitting here saying he's on a max deal now, but he's like can't get out of the first round or like we're okay in the second round, but that's it. The reality is we all know how it's going to go. He's not going to want to stay. He's going to want to go somewhere else. That's just how it works in the NBA. guys don't don't stay forever hoping to eventually win. They need to start winning at a level that they feel good about. And I think for Orlando, they recognize that now. I think it's been baby steps, baby steps. We're building. We're building. Now it was last year was all right, we got Cwell Pope. Now it's looking around and saying, "All right, we're not going to be players in free agency." That's okay because there's nobody to really sign anyway. It's not a good free agent class. But trades are going to be the way forward for this team. They have all their own draft capital. They have some extra picks as well. I think you're going to see them be aggressive this summer in getting targeted help. It's guys who can defend, but guys they really feel like all right is at least if they're an above average defender. We don't need to just add elite defenders anymore. We gota add guys who can really push this offense forward while not being somebody who eight minutes left to go in a playoff game we can't can't have on the floor like it's gonna have to be they got to hold their own but you you could you could sacrifice a little bit there and that's probably going to mean some familiar faces that Magic fans have become attached to aren't going to be here anymore but that's all part of it if you want the team to win you can't be so precious with your own players forever where it's well you know what I like that guy I like that guy I like well you rosters are limited to 15 standard guys and three two-way guys. You you want you want to get something good, you're going to have to give up something again. I've I've been kind of preaching some of the same things you just brought in to your opinion there where it's Yeah. they're going to sacrifice defense for offense, but they're probably not going to completely let go of their philosophy, right? You mentioned they have to be like, you know, at least an average above average defender. I totally agree. And that's why when I look at someone like Taius Jones, he's just not going to be on the table. You know, we can cover up some people, but when you're in the when you're in the playoffs, it's fine to be able to cover their flaws in the regular season, but we have to improve they have to improve this roster for the playoffs. And that is where, like you mentioned, if you can't play them in the last quarter, the last eight minutes of the play of a playoff game, then it's not really helping the problem get solved. So, I agree with you. They will sacrifice some defense for offense, some magic players, but I still think there's got to be some guys, whether they're younger with at least some tools to grow into a good defender or if they're a little bit more established. Okay, they're not a complete zero on the defensive end and they can be used as well to help improve this team because they're still going to be a defensive team. Like, I agree with that. that's their that's what's kept them so competitive these years and what is going to be their calling card moving forward. But yeah, they have to improve the offense somehow and that's what that's going to look like. Before we get into that, I let's just talk a little bit about the Magic's summer situation, right? We we kind of mentioned the picks that they have, but we can get into that a little bit more as well, but I want to talk salary. There's this a weird free agent class, but they're kind of not really a in a position to be a free agent team. I got spo track up right now and you know it's you run it it's it's great very easy to digest and you know the magic are going into next year as a first apron team if they accept everyone's player opt or team option there will actually be a second apron team roughly 209 million I believe is is that number can you just explain a little bit more on how the Magic are sitting in financially this summer sure yeah so this is one where as they've grown the team and as what happens, life comes at you very fast, right? Fron and Suggs starting their rookie scale extensions next season. They're no longer the nice to have good players on the rookie scale contract. Now we're into the next contract. Fron didn't obviously make all NBA wasn't even eligible. Suggs didn't get there either. So they're both on the Well, Suggs had already signed a lesser deal, but Fron gets his money. But those two guys, just this basically sums it all up. They went from making a combined $16 million last year to they're going to make 73 and a half uh next year. So that gives you a sense of this is where things are going for the Magic, right? As you resign guys, they're there. Then you have Cwell Popes there at 20 uh I think it's what it's 22 million almost. So then you got Paulo, last year of his rookie scale deal, 15.3. Last time you're ever going to see him on a number that low. Then you get into all the rest of the guys as they've extended and resigned players over the years. So you get Jonathan Isaac, Cole Anthony, Wendell Carter Jr., all double digit guys. We'll see what happens with Mo Vagner's team option. My guess is it gets declined, but then they resign him to a lower number just to be a little bit more palatable. Then you have guys like Goa Batad, Gary Harris, guys who are on not monster contracts, but those kind of mid-range type salaries. So now you're in a spot where if you are the um the Magic, you add it all up and that's how you end up being an apron team. You've got the couple guys on a well, one guy on a max, one guy on a near max, then you've got a couple other guys who are expensive in the middle there and then it just kind of all adds up. Here's the good news. No one of those players is on a bad contract where it's like, "Oh, no. We can't trade this guy. It's such a terrible deal." They're in a place where all of those contracts are very movable fairly easily. And that's important for the Magic because they are looking to be active in the trade market. What could get challenging though is bringing in more money in trades is going to be a challenge for them. So, what you may see is this could be an off seasonason where you see a handful of moves that get made. It could be like a and I'm I don't want anybody to think I'm reporting anything. I'm pulling these out of thin air, but uh Goabat traded off into somebody's exception because that doesn't bring back money. Now, we created 8 million in clearance for ourselves in the next deal. And those how you start to kind of be able to build up things. It could be Gary Harris is just gone, right? He just we we can't afford that 7.5 million, so we decline the team option and off he goes. The other piece of good news is the Mad We're Well, maybe good news. Let me let me rework that a little bit. Magic ownership in the past, now that was under the dad before he passed away, never shied away from paying the luxury tax when the team was really, really good. They were they they were never deep deep deep into it. They never got in deep into the repeater tax range or anything, but they would always go into the tax if they felt like we have a team that can. We're going to find out with the the the new not new new ownership, you know what I mean? Uh you know, different different place, different family members. Yeah. This is the first time the team's been good enough to even consider being a tax team. they haven't been good enough, yo, over the last few years to even for that to even be a consideration. So, we're going to find out, you know, what is the what what is the appetite to pay the tax, how deep into the tax and all that. And then last thing I'll say is you have to be very conscious of the aprons. Let's say they get the go-ahhead. Hey, do what you got to do. We want to win. You'll go. The aprons come with a whole set of restrictions around them. you can hard cap yourself if you do certain things and that can become tricky to work around. So, they're in a good place. I think they'll be okay moving forward. I think you're going to see a lot of change in this roster uh through trades and the like, but it's probably going to amount to a team that is pretty expensive and then is if they do a lot this summer, I don't know how much we'll see them do like at the trade deadline. Sure. And moving forward because I think it's going to be one or the other for the Magic. Uh there's multiple things we will get to from what you just said. I want to talk more about the aprons and the different restrictions that come with them and where we think they could possibly land in that area. But before we get into that, I want to circle back to the Magic roster and the players contracts, there are a lot of, you know, very tradefriendly type of levels of contracts. But when you look at the players and their performance versus their numbers, are there any contracts where you look at it and it's like almost negative to how the player performed where they might have to include a draft asset and you know some second round picks or some sort of protected first round pick to make that deal a little bit more equal or do you think like you know Jonathan Isaac, you know, he had a kind of a down year definitely with his shooting. His defense was good, but not great that we're used to. Um, you know, long-term still multiple years left on his contract like you know, Wendo Carter could be any of these guys have multiple years left or long question last long. When you look at the Magic contracts, do you see any of them as negative value? No, not negative value. The closest is probably Isaac and Carter. and Carter's just because of the extension that comes after this season at 10 10.8 8 million. That's great. Starting level center for less than the mid level. That's awesome. It's the 18 million and plus as you move forward. Jumps up to like 10% of the cap space, I think, roughly around that. Yeah, it's not. And it's not bad, right? It's not Those are the closest though. The biggest thing with Isaac is he this past year he he stayed healthy throughout the season, but there's a belief, I think, within the Magic, even if they've never directly said it, but certainly around the league that he just can't play more than like 20 minutes. Yeah. You know, Yeah. in the regular season, he played just over like a thousand minutes for the entire regular season, which was not great. And that's tough, right? If you are the Thunder and it's Alex Caruso playing a lowminute role and it's like go all out because if you get hurt or whatever, we have the depth to cover for it. That's fine. On the right team, 15 million for Isaac to do do what he does in a short minutes role. That's okay. But it's got to be the right kind of team. Like Orlando right now is the right kind of team. But you saw in the playoff series against Boston, it got to be so rough with him offensively that they kind of had to go away from it, right? They were like, "We just we we can't have you on the floor. They're just not guarding him." Um, you know, now we're playing four on five and in the couple of times he was out there with other guys at the Celtics, we're not going to guard that guy either. And that just collapses everything. So, but by no means are those contracts ones where it's like, well, we got to put a draft pick in to get off those. The Magic will just keep them before they would do anything like that. I think it's more likely to be, hey, Isaac's the primary salary match in a trade, but we're going to plus up our offer with Anthony Black or with Tristan Dilva or whatever. It's not to dump Isaac's contract. It's we're we're using him as the primary salary matching vehicle and we're plusing up the offer with a young player or potentially a draft pick down the line. That makes a lot of sense. Um because I think, you know, fans get emotionally charged when they see players and contracts and like, oh man, if we're gonna have to move that person, we're gonna have to add a draft pick. And I I I tend to agree with you. I think most of them are probably more of a neutral, right? Not really a great value because of they're not like crushing it and playing outside of their contract, but not really so bad or the contract is so big that teams are going to look at it and be scared to take it on without additional help. It's more like you mentioned like we just want to have a more competitive offer. let's include some sort of some sort of draft capital or a young player uh or both depending on the type of return they're they're looking at. So, that's that's good to know. I'm going to stop sharing my screen for a second just so I can share my notes. Yep, I got to stop sharing or it's going to share the whole thing because I didn't share properly. Cool. Where where I want to talk to you now is more specifically about the apron situation for the Magic. Again, we don't really expect this. If they bring back everyone, they are just at the cusp of the apron. They're going to be at like 207 million if they pick up every single option. That's probably not going to happen. They're probably going to sit closer in the first apron world. But let's just get a good understanding here. If they stay in the second apron, what are the consequences that come with that? And then we'll do the same exercise with the first apron. Yeah. So, the second apron, the easiest way I can explain what you can do in the second apron, you can sign your draft picks, you can resign your own free agents, and you can sign players to minimum contracts. That's it. That's if you start as a second apron team. If you are hardcapped as a second apron team, you can only go up to the second apron and you can't go past it. That's the same if you're hardcapped at the first apron as well. If you there's a whole lot of things that trigger the hard caps. The things that trigger a second apron hard cap is if they use the taxpayer mid-level exception. If they aggregate players together in a trade, so that means like Isaac and Wendell Carter for 25 million to go out to go get a player. That's aggregation. That would hard cap you at the second if you send out cash. Magic probably aren't going to do that. But if they were to buy a draft pick and we can get into why I think it's more likely to go the other way for them, but that would also hard cap you. Then if you use a trade exception that you had from like a prior year, I don't know that Orlando has any meaningful ones and they do not. So that's kind of all kind. But if you did that, that would would hard cap you as well at that second apron. It's important to know with a hard cap, you cannot exceed it for even a single dollar. The best example we got of this was last year. The Dallas Mavericks were short-handed. They were hardcapped at the first apron via a series of different offseason transactions that they made. You cannot get a player to come in when they are when you are hardcapped. Even if you're short-handed, you have to figure it out another way. That's why I had to wait till there were four days left in the regular season to sign Brandon Williams. They were out there running around with like no guard depth because he was out of two-way games. He wasn't eligible to play anymore in his two-way contract and they had to wait. That's just that's how it works. When you're hard capped, you're hardcapped and you got to figure it out another week. Now, let's do the same question exercise cuz I I think we both agree and can kind of predict there probably not going to be a second apron team. It's just kind of too premature. No matter how much they say they're going to win now, it's too you don't go ask ownership to pay that level unless you are really ready to to go after it. Mhm. That also means just just in terms of finances that means being $20 million over the luxury tax. Yeah. Which is just that that's that's probably a bridge too far for the Magic. And yeah, I agree with that. The first apron might be a little bit more realistic for the Magic. The first apron is I please feel free to correct me. I'm just going off of a random screen grab right now. The Bobby Marks like kind of like direct end of season card that he always makes. Um 195 million is the first apron level. It seems kind of realistic that the magic could operate in the first apron. How would first apron like what are the restrictions that come with the first apron? Yeah, so there's there's quite a few with that one. So if you're already over the first apron, you cannot you can't use the non- taxpayer. That's the bigger one. That's, you know, the the larger MLE. You you can't use the by annual exception. You can't acquire a player in a signing trade. So, let's say there was a guy the Magic really liked. Uh, Fred Van Vele. Let's say becomes a free agent. They couldn't sign and trade for him. You can't sign any buyout players who made more than the uh non-t taxpayer Emily on their previous contract. So that's the kind of Kevin Love rule, if we will, where it is, you know, player makes 20 million, gets bought out, and then the team goes and signs him. You can't do that if if you're um above the first apron. You can't use more than 100% salary matching in a trade. So by example of Isaac and Carter for 25 million to go get a $30 million player, not allowed. you would not be allowed to do that because you can't do that and you can't use a TPE that was created in a prior season. So meaning if the the TPE rule on the second apron is a sign and trade TPE, this one is a you can't use it in a prior season. And the reason why is if you do any of those things, you get hardcapped at the first apron. So, easiest way to think about it, and people share it all the time on social media. People people have taken a call on it the stoplight chart where I created this little it's green, yellow, orange, and red. And it's green is under the cap. You can do whatever you want. Yellow is you're over the cap, but you're not near the first apron. You can do a lot of things. You just don't have cap space. And then you have the orange, which is we're getting kind of dangerous. We're over the over the a first apron. And then the red is second apron. And it's it's important to know whenever anybody looks at that. If you're already over, you can't do all the things that would hardcap you, right? Because it closes that loophole. If you're hardcapped, you can't do a thing that would would make you above the hard cap um if you're already above it. And then if you're not there, but you do those things, you get hardcapped at the first apron. So, let's say the Magic are under the first apron, but acquire a player by a sign and trade, they would get hardcapped at the first apron. And the most important thing to note with all this stuff, signings or trades or anything, it's where you are at the end result of whatever the transaction is. So if the Magic were 10 million under the first apron and they wanted to use the non- taxpayer MLE to sign a player to a $12 million contract, they would not be able to do that. It wouldn't go through because that would hardcap them at the first apron. Now, if they did another move that shed 2 million bucks and now they're 12 million under, go ahead, go right up to it. But again, trigger that hard cap. You can't even go over by even so much as a dollar. Is there a specific time period that a team can operate like as soon as you hit a certain number of cap, do you start having those restrictions or can they operate a certain way in the off season and then when the season starts just have to kind of clear those books? You can always drop under the the aprons or you could drop under the tax and free up more flexibility for yourself. The the the they call it the snapshot is what the league calls it. They don't take the tax snapshot till the end of the season. So that means let's say the Magic were that they are 10 million into the tax line and they're like, you know what, we we're just not good enough to pay the tax. We got to get under the tax. So they're like, "We have a team who will just take Wendell Carter's $10.1 million contract. They'll just take it. Get us out of the tax and we're good." You can do that. Really, it's by the end of the season, but it's really the trade deadline because you're not you can't make big moves like that after the trade deadline. So, as long as you get under by the trade deadline, you've now freed up the flexibility you need to do other things. But yeah, really it's whatever you kind of set your status at or you trigger the status when the off seasonason starts. That's kind of the way you're operating for for a little bit. There's certain things you can do, but yeah, the only hard and fast deadline, which won't apply to the Magic at all, is by the start of the regular season, if you're not at least at the salary floor amount, you then there's two things that happen. you lose any cap. Let's say you're 10 million under the salary floor. You get an artificial cap hold put on your books that brings you to the salary floor and then you have 24 hours. You have one day to get over the salary floor. Otherwise, that ownership group loses out on any of the revenue sharing from the tax teams. So, they would lose that. The Pistons were in that spot very briefly. They did a series of moves and a bunch of cap minutia to to get themselves in a position where they they ended up over in season because they were one of the only teams. And the reason they closed that loophole is for a series about a decade teams were carrying tons of money into the regular season below the cap. And then it was well we'll get to the floor by the trade deadline because we'll just bring in all these guys. Like Philadelphia became notorious for this under Sam Hanky where it was one year was like we'll take Javal McGee's $16 million contract cuz we're 30 million under the salary floor and that's great. We'll just we'll bring it in and that helps us get to where we need to be. They close that loophole because the idea is they want you to spend that money, right? The 16 million eating a contract, that's not new money introduced into the system. That money already exists. Let that sit on the other team's books. We want you to eat it. not eat it, but we want you to spend it early versus just bringing in, you know, old money that already existed. That makes sense. Kind of circling back to the previous question where I was talking about when are things triggered. So, basically, I just want to recap, make sure I understood that properly. If the Magic make a series of moves to drop below the second apron, but are hitting the first apron even in this off season, this summer, they're going to go into the season with all those restrictions. they're just not going to have to pay the financial tax on it until the end of the year or like you said, more like the trade deadline is kind of like the the mock deadline because then it gets really hard to get below things afterwards. Um, okay, that makes sense. Thank you for clearing that up because yeah, I just wanted to know. All right, you may be going to go here, so apologies if I'm stepping on your point here. So for the Magic right now, if we project them to pick up Gary Harris's option, pick up Mo Vagner's option, pick up the option for Caleb Houston, but let Corey Joseph go or at least not pick up his option because that's a little more money than what you probably want on the books. The magic will be because it's important. This is where this gets lost a lot. They have two first round draft picks and those do count like in the formula. So you have to add those back in there. They're they're only about 4.5 million under the second apron. They're about 7.5 million over. So now let's say they were like, well, you know what? We're getting rid of we're going to we're going to we're going to wipe the books with Harris, Vagner, Houston, Joseph. We're going to we're going to let them all at least go initially. Now what you've done is by letting all those guys go, you're 5 million under the tax, you're 13 million under the first apron and you're 25 million under the second apron. So that's where if Magic fans here, I think Mo Vagner is probably the more pressing concern out of all these guys. Sure. Magic fans here, they declined his option. That doesn't mean he's out of the picture and he's leaving. Yeah, I would even say that it's probably not even close to meaning that. It just is we don't want to pay him $11 million next year. We'd like to pay him more like six or seven million, which they can do because they would have the free agent rights to be able to do that. So, what they would do is decline the option, bring them back at a smaller number, but here's the important thing. They'll do it after they do their other stuff. So, if it's now we're look at all the clearance we created, right now we can aggregate players in trade. We can take on a little bit of money in a trade. I think that's very likely how this goes. And then it'll be all right, we did a move that, and I'm just making up, but we made a trade that triggered a First Apron hard cap and we have 5.5 million under it. 5.5 million goes to Mo Vagner. That's what we've got left for him. And and off we go. Versus him sitting on the books at 11 million, which is, you know, probably always a little bit of an overpay. And I think Orlando overpaid him this past off season for two reasons. One, it was they got the team option, so they have the ability to get out of the contract. Sure. And two, it was we're going to overpay you because then if we sign you for for five next year, look at that as a two-year $16 million contract. Yeah. And now you're in a position where, you know, we're in pretty good shape. So, those are those are the things you need to kind of look for as the off seasonason starts. In addition to there's a real roster crunch here as well. They are running out of roster spots. So, you can't bring everybody back because you have the two draft picks. And yeah, I guess one of those could go to a drafting stash guy that stays overseas for a year and maybe. But that's where you're you're you're running into it here because they've drafted, developed, retained, resigned so many guys over the years. the roster is getting a little stuffed. When you look at the Magics's, I was going to go in a different direction, but you've brought it to a spot that I think is wonderful. When you're looking at the Magic this summer and how they're going to operate with trades, obviously players are included in trades, but when you're looking at the draft capital, right, do you feel like it's more likely they would try and use one or possibly both of their first round picks this year, or would they want to potentially go and use like a future first round pick? How do you think the Magic are looking? And for the listeners, the Magic have their own pick at 16 and the Denver pick at 25 this year, plus two additional second round picks. You know, they have all their own first round picks going into the future. And then they have swap rights that are a little bit complicated with the Phoenix Suns. So, long story less long, there's a bunch of like rules with the Phoenix Suns, but they're probably going to have a better pick than their own pick. The ability to swap with someone else with the Phoenix, whether it's Washington or Memphis or whatever, they're going to have an option to swap for a better have about 15 teams combined, I think, in the conditions there is the way we're headed with that one. But yes, I So, I'm going to make a prediction right now. The Magic will not use four draft picks in this draft. One of those second rounders will go at least. They just don't have space for four players. 57 and what what is the other one? I think it's 46. Something like that. Yeah, those are kind of in two-way range anyway. Like that's the range where you draft a guy with the idea of them being on a two-way contract. 46 is about where that starts in the middle of the second round. 57 is obviously in that range. So, if the Magic can't move one of those two, that's probably what you're looking at is guys drafted to be on two-ways because it's at this point highly unlikely M. McClung comes back on another two-way contract. Guys just don't really do that beyond a couple of years. Um, and then Treving Queens in a very similar situation. I don't think he'll be back. Uh, with Orlando on another I don't think he can be anymore. I think he's kind of hit his years of service for the Magic. I don't know how many you could do three years with the same team. Okay. On a two-way. So, I'd have to look on those guys. But, yeah, if they've already done three years, then they can't even do it. I think he's done two. So, he's got one more that might be eligible. And they'd have to also look at the years of service for those guys because if you have four or more years of service, and remember that's not in your fourth year. Four years of service means you're going into your fifth year. Yeah. Um the years of service is one year behind the year you're playing. You don't get credited until after the season. But a so a guy with with with uh four years in his fourth year is still eligible eligible for a two-way. But anyway, they're gonna have to do something now to the first rounders because that's what really matters. And I've had a couple people ask like, "Well, can we package those together and move up to like 10?" Probably not. It's just they're not valuable enough. Um there the it the NBA draft is so different than the NFL draft. And I think it's very funny because those questions come in almost always like on the heels of the NFL draft because it's like I just watched this team do this. Yeah, but there's seven rounds and there's, you know, 400 draft picks. Like the NBA isn't that way, right? There's there's there's only two rounds and this year there's only 59 picks because the Knicks forfeooted one. So we're in a position where Yeah, it's just not that much. And I've even had people say, "What if they add in, you know, the two seconds? Those are no like those are going to have no value. zero value for jumping up with the seconds. Yeah, exactly. Jumping up. So, what's more likely is you take one of those two and let's say there's a team that is like, man, we really need Yo X and we love this guys on the board and we'll we'll give you future draft capital, whatever. Yeah. And you kick it down the road. Those trades are those are NFL style trades, but they are becoming more popular in the NBA where it is we don't have the spot. And again, it goes back a lot of that goes back to what I referenced before. The Magic roster is just a little stuff. I think you want to use one of those picks just because you always want to have one young cost control player in the pipeline that you're working with. But yeah, I I I I would say everything else is probably on the table with the magic as far as let's let's look to move those picks, whether it's we put them in a trade with an outgoing salary to go get a player or we we move it for, you know, all right, we'll take a second and a first next year or the year, you know, whatever it is down the line. Well, we'll do that. The Magic have done that in the past, especially with seconds where it's all right, we'll trade this year's second for two seconds down the line and bet on because we think you're probably going to be worse than we are, you know, down the line. And it's worked out a couple times. Couple times it hasn't worked out, but you know, they're second round picks. That's kind of the games you play with those a little bit anyway. Yeah, a little little gamble there. I remember I think the last time they did it was like two years ago with the Milwaukee Bucks. They did Bucks didn't have a pick. We traded ours to them or the Magic traded theirs to them. Couple years in back. Yeah, there's a couple years in there where they sold picks to the Lakers a couple different times and and that's I wrote a thing, you know, a while back about common trade partners. And teams often go back to people they've done trades with before, especially if it's a certain type of trade because, you know, you're working with somebody that you've been able to work with in the past and you both kind of come out with what you're looking for. There's not a bunch of foolishness involved in there. So, it wouldn't be surprised at all cuz the Lakers have one pick. I think it's 55. It wouldn't shock me at all if the Lakers somehow got involved with like, hey, can we get 46? Cuz they just need to add some depth to the back end of their roster. And if the magic were like, "Okay, sure. Yeah, we're not going to use it anyway. Why not get two future seconds out of this or whatever it may be." So, yeah, it's just it's it's a weird spot because you never want to be like, "Man, they've got four picks. This isn't great, but you don't want four picks when you already have like 14 guys on the roster." Totally. You can't roster everything. All right, Magic fans, that wraps up part one with Keith Smith. We are going to continue this conversation on the next episode of this show on Friday. So, make sure to tune in on Friday and you'll hear part two of the conversation with Keith Smith. Thanks for tuning in.