Hennigan, 30, a protege of Thunder GM Sam Presti and product of the San Antonio tree of executive success, becomes the youngest GM in the league. Hennigan and the team entered contract talks Wednesday and quickly agreed to terms, a source said.
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"A true product of the San Antonio tree," said an executive in the league who knows Hennigan.
Orlando CEO Alex Martins spearheaded the hiring process, which reached the ownership level in the past week with three finalists traveling to Grand Rapids, Mich., to meet with Magic owner Rich DeVos. Hennigan was chosen over Spurs assistant GM Dennis Lindsey and former Hornets GM Jeff Bower.
Despite his youth, Hennigan is well regarded and has risen quickly through the ranks of the Thunder organization under the respected Presti, who had two candidates in the race. Thunder assistant GM Troy Weaver was interviewed, but did not make the final cut of candidates who went to Michigan to be vetted by DeVos.
Hennigan's first order of business will be to deal with the delicate Dwight Howard saga, with the inevitable outcome likely being that Hennigan's first major transaction in his new role will be to trade the All-Star center. Having been groomed by Presti, Hennigan is well versed in building organically through the draft and being patient with free-agent spending and diligent with the use of cap space. He will have even more resources in Orlando, where DeVos is not opposed to spending money to win.
In addition to preparing for next week's draft and plotting his strategy with Howard, Hennigan also will hire a head coach to replace the fired Stan Van Gundy. It is strongly believed that Pacers assistant Brian Shaw, who is well-liked by those in the Orlando organization, is the early favorite.
Hennigan worked for San Antonio first as an intern in 2004-05 before being promoted to director of basketball operations in 2007. He was hired by the Thunder as director of college and international scouting in 2008 and was promoted to assistant GM/player personnel before the 2010-11 season.
He's a native of Worcester, Mass., and attended the same college as Presti, Emerson College.
In their search for an executive to replace former GM Otis Smith, the Magic had been seeking a candidate with championships on his resume. Only Lindsey among the finalists had those, but Orlando seems to be doubling down on the patient, long-term building plan that Presti and other disciples from the Spurs organization have used to propel the Thunder to prominence. The Thunder went from being a 20-win team in their last season as the Seattle SuperSonics to back-to-back 50-win seasons with conference finals appearances in 2011 and '12, culminating with a trip to this year's Finals, where they trail the Miami Heat 3-1.