Matt Barnes announced on Monday night that he is going to sign with the Raptors.
However, ESPN.com's Marc Stein reports that Orlando's limited sign-and-trade options may scuttle the deal, according to sources.
Barnes is expecting to sign a two-year, $10 million deal.
The Raptors and Magic will resume discussions on a sign-and-trade Tuesday. However, because of the financial standing of both clubs, it's possible that Barnes may have to agree to new terms.
Toronto recently spent the bulk of its $5.8 million mid-level exception to sign Linas Kleiza. They don't have the available funds to sign Barnes outright to a deal that starts in the neighborhood of $4 million.
The Magic are prevented by salary-cap rules from starting a sign-and-trade deal for Barnes at higher than $2 million, because Orlando doesn't have Barnes' full Bird rights after employing him for only one season.