UPDATE - ESPN: Orlando Magic Sign Matt Barnes; Oakland Tribune: C.J. Watson Will Sign Orlando's Offer Sheet

According to Marc Stein of ESPN.com, the Orlando Magic have agreed to terms with free-agent small forward Matt Barnes on a two-year contract. The exact dollar amount of his deal is not yet known. The news corroborates what a source told 3QC when the Magic signed Brandon Bass 10 days ago, that Barnes would be the next player to sign with Orlando.

UPDATE: Adrian Wojnarowski of Yahoo! Sports reports the deal is worth $3.2 million over two seasons, with the second a player option.

Barnes, 29, is a 6'07", 235-pound small forward who has played for 6 teams in 6 seasons. He posted career-high averages of 10.2 points, 5.5 rebounds, 2.8 assists, and 27.0 minutes for Phoenix last season, notably spending some time at power forward as well. His career averages are 7.0 points and 4.1 rebounds on 43.4% shooting, and 33.2% from three-point range. He was a teammate of current Magic forward Mickael Pietrus in Golden State from 2006 to 2008.

In this scouting report composed before last season, ESPN.com analyst John Hollinger breaks down Barnes' skills in greater detail. An excerpt particularly relevant for the Magic:

When he isn't spotting up for 3s, Barnes basically plays as an energy guy who can come in at either forward spot. Though he's dramatically undersized for power forward at 6-7, 235 pounds, he's very tough and manages to hold his own on the glass. His problem is size mismatches in the post, which is why he tends to play in the frontcourt only in small-ball lineups; that was every day in Golden State, but is likely to be less often with his new employers.

Barnes handles the ball very well for his size and can be used as a point forward. He'll get out of control on drives to the basket at times and doesn't have the strength to post up or muscle his way to the hoop off the dribble, which is why he's mostly used as a spot-up shooter.

It's possible that Barnes could spend some time at shooting guard with the Magic, in a pinch. A more likely outcome is his splitting time with Pietrus at small forward, and perhaps even starting in order to keep Pietrus in the sixth-man role in which he excelled in the playoffs. Barnes' point-forward skills, to which Hollinger alludes, could make him a replacement for the departed Hedo Turkoglu in some offensive sets.

The timing of this signing definitely piques my interest. Over the weekend, NBA FanHouse reported the Magic were about to present an offer sheet to restricted free-agent point guard C.J. Watson. However, Orlando has yet to officially ink Watson to that offer, presumably because it wanted to get Barnes nailed down first. Signing Watson to the offer sheet would have tied up the Magic's money for a week while Golden State mulled matching it, during which time Barnes could have signed with another team.

The Magic have $1.85 million of their mid-level exception left, after using $4 million of it to sign Bass. Barnes played last season in Phoenix for the minimum salary, and we expect him to have signed with Orlando for most, if not all, of that remaining $1.85 million. Signing him to the remaining portion of the mid-level would mean the Magic could only offer Watson a minimum contract.

The picture with Watson will become much clearer once financial terms of Barnes' deal become available. What we know for sure now is that Orlando has added much-needed depth at small forward for the next 2 seasons.

UPDATE: well, that didn't take long. Marcus Thompson II of the Oakland Tribune reports that Watson will sign an offer sheet with the Magic after having spent all of Monday with his representatives negotiating terms of the offer with Orlando. He's already turned down a $2.3 million offer from Philadelphia because he wants long-term security. It's probable that Orlando's offer will offer a lower annual salary, but a higher total dollar value.

Golden State will have a week to match once Watson signs the offer. Thompson addresses that possibility:

Warriors general manager Larry Riley has said all along he's a fan of Watson, who went from NBA Development League call-up to reliable backup in less than two full seasons. Before the draft, Riley said whichever point guard Golden State brought in would have to beat out Watson.

Of course, that was before guard Stephen Curry fell to the Warriors and became coach Don Nelson's favorite rookie (and, at worst, the backup of starting point guard Monta Ellis). Before the Warriors acquired point guards Acie Law and Speedy Claxton from Atlanta. Now, Watson is expected to be in a battle with Law for the No. 3 point guard slot.

Carrying four point guards is probably excessive for the Warriors, who, according to a team source, are looking to cut expenses by carrying 14 players instead of the maximum 15. Law is already set to make just over $2 million. If Watson gets a deal in that ballpark, the Warriors would be paying more than $4 million for a third-string player.

$2 million for a player of Watson's caliber is a relative bargain, but the Warriors are in the unenviable position of having a lot of money committed to mediocre players in long-term contracts. They're on the hook for almost $59 million in 2010/11 and nearly $62 million in the season after that.

Watson would be a solid addition for the Magic, who've already had one heck of an offseason.

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