On June 1, 2007, Billy Donovan was named the new head coach of the Magic, agreeing to a 5-year, $27.5 million deal with the team. Donovan had previously led the University of Florida basketball team to back to back NCAA National Championships in 2006 and 2007. However, on June 3, 2007, Donovan decided to return to the Gators (according to ESPN's Andy Katz). The Magic can decide whether or not to release his contract as early as the 4th, even though he has been under contract for only two days. On June 5, 2007, multiple sources reported that Donovan and the Magic have agreed upon a non-compete clause, requiring Donovan to refrain from coaching in the NBA for five years as one of the terms of his release from the contract. The clause would address Orlando's concerns that Donovan could accept another NBA job in the near future. Also on June 5, the Magic made a formal offer to former Miami Heat coach Stan Van Gundy to become the head coach. On June 6, 2007, the Magic released Donovan from his contract. According to ESPN and the Orlando Sentinel, the Magic have signed Stan Van Gundy as the new head coach. The deal is reportedly for 4 years, $16 million.
On July 2, 2007 it was reported on an Orlando television station that Rashard Lewis agreed to a 5-year, $75 million deal with the Orlando Magic. He ultimately went to the Magic on July 11 in a "sign and trade" with the Seattle SuperSonics, who got a mid-level salary cap exemption and a 2008 second-round draft pick in exchange. Lewis signed a six-year league-maximum contract believed to be worth over $110 million.
On July 17, 2007, the Orlando Sentinel reported that the Magic will sign center Marcin Gortat[8], whose rights they obtained from the Phoenix Suns the night of the 2005 NBA Draft.
At the NBA China Games, the Magic swept the three games in China, twice against the Cavs and once against the Chinese national team in games held in Shanghai and in Macau.
On November 15, 2007, Bob Vander Weide, the son-in-law of Richard DeVos, officially took over as owner of the team.