ORLANDO, Fla. — After his team formally announced a 10-year, $40 million agreement to name the new downtown arena Amway Center, the Orlando Magic’s chief operating officer said Wednesday that the franchise can continue to spend aggressively on payroll as long as the franchise meets several conditions, including a high level of on-court success.

“We can sustain it into this new building provided that we do have a great product on the floor and provided that we sell and market it well,” Alex Martins said. “We can sustain this level of salary if we’re able to do that. And right now, we are able to do that because our fans see the value of the product, the value of the brand and the fact that we are investing in the team on the floor. So, as long as we continue to be competitive on the floor, we’ll be able to continue to reinvest.”
After a busy summer, the Magic’s payroll for the upcoming season has ballooned to nearly $80 million, well above the league’s luxury-tax threshold. At the end of the regular season, any team with a payroll over $69.92 million must pay a dollar-for-dollar tax for the amount above $69.92 million.
The Magic currently have 11 players under contract, and General Manager Otis Smith wants to sign another backup point guard and another big man. When contacted Wednesday, Smith said he doesn’t expect any deals for the next couple of weeks.
“Still looking and having conversations,” Smith said.
Former Miami Heat player Jason Williams could be a possibility at point guard, but the New York Knicks have the exclusive rights to negotiate with him through Thursday. The Magic had been interested in Golden State restricted free agent C.J. Watson, but the only realistic way the Magic could obtain him would be through a sign-and-trade deal with the Warriors.
With the major offseason additions already made, Martins said the Magic will lose $40 million during the upcoming season. But the team hopes to break even once it moves into Amway Center. The revenue from the naming-rights deal will help reach that goal, he said.
According to Martins and Amway’s chief marketing officer, Candace S. Matthews, the agreement required 15 months of negotiations even though Magic owner Rich DeVos is Amway’s co-founder. The family of Amway’s other founder, Jay Van Andel, has no financial interest in the Magic and could have prevented the naming-rights agreement.
“I can honestly say it wasn’t a done deal,” Matthews said. “It was a true negotiation. But the Orlando Magic is such a wonderful team to work with, and this venue offers so much.”
Matthews raved that people driving on I-4 might see ads for Amway products because a giant electronic media wall will be affixed to the building’s exterior facade. Over 1,000 electronic screens inside the building will carry ads that can be tailored to specific audiences. Also, there will areas within the facility—areas Matthews called “experience centers”—where people can test Amway products.
The agreement’s formal announcement came Wednesday morning in a ceremony on the roof of a parking garage across from the new arena. The only hiccup came as All-Star center Dwight Howard and former Magic player Nick Anderson, both dressed in hard hats and fluorescent yellow vests, stood at the construction site and attempted to unfurl a banner with the Amway and Magic names.
The banner became stuck, and several minutes passed before it was untangled.
“We have this saying in our business: Banners and trophies are hard to achieve,” Martins quipped. “And this is no different.”