by Marcel Mutoni / @marcel_mutoni

At one point last night, everyone assumed Matt Barnes would be living and working in Toronto next season. Barnes certainly did.

Now, however, that might not be the case. Indications are that Matt isn’t headed to the Raptors; not for the time being, anyway.

The reasons are financial — as in neither Orlando or Toronto has the money to pay Barnes what he wants — and the Orlando Sentinelcobbled together the details:

According to Yahoo! Sports, the deal would be worth $9 million over two years, including a player option for the 2011-12 season. (ESPN.com is reporting the deal is worth $10 million over two years.) But the Toronto Raptors are out of cap room and already have used their midlevel exception this offseason to acquire Linas Kleiza as a restricted free agent from the Denver Nuggets. Therefore, the Raptors don’t have the ability under league rules to pay Barnes $4.5 million a year.

So, where would Barnes get that money? The original ESPN.com report by Marc Stein said the deal would be contingent on the Raptors working out a sign-and-trade deal with the Orlando Magic. But it’s clear that the Magic don’t have $4.5 million to give Barnes as a prelude to a sign-and-trade.

It appears that Barnes and the Raptors will have to agree to a new deal — one for significantly less than $4.5 million. If they can’t reach a new deal, Barnes would remain on the free-agent market.

This is unfortunate for Barnes, whose agent and the GMs in both Toronto and Orlando seem to have all dropped the ball here.

It’s back to the free agency drawing board for everyone involved in this deal.