The New York Knicks bolstered their playoff playing rotation on Tuesday by adding Quentin Richardson. The Orlando Magic waived the veteran swingman in training camp, choosing to give his roster spot to undrafted rookie DeQuan Jones instead. Orlando was still on the hook for the money it owed Richardson--$7.37 million, according to ShamSports--over the 2012/13 and 2013/14 seasons, but decided that getting a long-term look at Jones' potential was worth eating Richardson's salary.
Orlando will realize some cap savings as a result of Richardson's joining the Knicks. "If another team signs a player who has cleared waivers, the player's original team is allowed to reduce the amount of money it still owes the player (and lower their team salary) by a commensurate amount. This is called the right of set-off," says Larry Coon in question 64 of his salary-cap FAQ page. "[....] The amount the original team gets to set off is limited to one-half the difference between the player's new salary and the minimum salary for a one-year veteran."
Brian Serra of Magic Basketball Online crunched the numbers and found that Orlando will only save "a marginal few thousand dollars" in 2012/13 as a result of Richardson's signing with New York. However, Serra says that if Richardson plays in 2013/14 the impact could be $100,000 or more.
That money isn't enough to sign a free agent, not even an undrafted one with no NBA experience, but it's nonetheless a bit more in Orlando's proverbial pocket.