In February, the Orlando Magic acquired former No. 1 overall pick Markelle Fultz for Jonathon Simmons, a first-round pick and a second-round pick. While Fultz has yet to suit up for the Magic after due to a nerve disorder that has kept him sidelined since November of 2018, the team’s management is confident enough in the 21-year-old point guard to invest in him for at least another season.
The Magic have exercised the fourth year of Fultz’s rookie contract, which will pay him $12.28 million in the 2020-21 season. That may seem like a small risk because of Fultz’s theoretical upside, but it could have serious consequences sooner rather than later.
As Zach Lowe of ESPN noted, the Magic’s starting point guard, D.J. Augustin, will be up for a new contract in the summer of 2020 and barring some serious roster shuffling, Orlando is projected to have over $110 million in guaranteed salaries through the 2020-21 season. While the Magic have Augustin’s full Bird rights, allowing them to go over the cap to re-sign him, they would be flirting with the luxury tax in doing so.
The roughly $13 million they’ve committed to Fultz also limits their spending power in 2020, when starting-caliber point guards like Kyle Lowry and Goran Dragic hit the open market. Fultz may end up being a better player than the aforementioned players, but that seems like wishful thinking at this point of his career.
If Fultz can stay healthy and show the things that made him worth of the No. 1 overall pick in 2017, the Magic will be in a good situation, but if he doesn’t, they’ll either have to go near the tax or stand pat next summer.