Magic Keep Spending With Van Gundy, Smith Extensions
The Magic extended the contracts Wednesday of both coach Stan Van Gundy and general manager Otis Smith through the 2012-13 season, including a $1 million bonus for each of them if the team wins a championship.
The Magic also will have a player payroll estimated at $90 million, second highest in the league, leaving them just below the two-time defending champion Los Angeles Lakers, and deep into the punitive luxury tax territory.
"We believe we are on the brink of being a championship team,'' said team president Alex Martins, whose contract also was extended as part of his promotion from chief operating officer. "It's just a matter now of taking the final step. This is part of that.''
Under Van Gundy, the Magic won 59 games in each of the last two seasons, losing in the 2008 NBA Finals to the Lakers and then in the 2009 Eastern Conference finals to the Boston Celtics.
As part of his two-year extension, Van Gundy will earn an estimated $4.3 million annually, putting him among the top 25 percent of coaches in the league. According to league sources, who confirmed his bonus clause, his contract is much like other NBA coaching contracts in that he will receive only a portion of it if the 2011-12 season is shortened because of the expected labor dispute.
Although the Magic were unable to complete a potential trade earlier this summer that could have landed point guard Chris Paul of New Orleans -- and they refused even to acknowledge the topic Wednesday -- outside league sources confirmed that they indeed were willing to increase their future payroll significantly (i.e., taking Emeka Okafor's bloated contract) to facilitate the deal.
Like every other NBA team earlier this week, the Magic received a memo from the league office reminding them of tampering restrictions with players under contract to other teams -- and specifically Paul -- according to league sources.
Yet despite rough economic times, and an uncertain future with its labor force, the Magic have not backed away from spending what they think will help them win a title.
In the last two summers, they have matched bigger-than-expected offer sheets given to their restricted free agents, pushing them further into the luxury tax.
They will be paying backups J.J. Redick and Marcin Gortat $7.5 million and $6.3 million, respectively, this season, figures that double under the luxury tax. They also will be paying forward Rashard Lewis $20.5 million, making him the second-highest paid player in the league behind Kobe Bryant.
"We're willing to put in the dollars, the time and the energy to make it (a championship) happen,'' said Bob Vander Weide, chief executive officer and part of the ownership group.
The biggest reason the Magic have been willing to spend is Rich DeVos, billionaire team owner and family patriarch. He is 83 years old and had a heart transplant 12 years ago. And the Magic also are moving into a new arena this season, which will help create a much bigger revenue stream to support the spending.
"At some point the business model has to make sense,'' Vander Weide said. "But for now, he (DeVos) is loving the team, and what we've done. We wants us to compete for the championship.''
And despite what the Miami Heat have done this summer -- creating a superteam with free agents LeBron James, Chris Bosh and Dwyane Wade -- the Magic still feel like the title is as close as ever.
"We're thinking every day, 'How can we beat Miami, how can we defend them?' '' Vander Weide said. "But it's still a team game. They still have to play together, and they haven't won a single game yet. Our expectations post-All-Star Game last season was that we were the best team in the league and we expected to win it. That's how we're going to training camp this fall. We still have the pieces to win a championship.''