Orlando Magic is not generic. The owners of the Orlando Magic basketball team own a bunch of trademark registrations for ORLANDO MAGIC. If the domain name is <OrlandoMagic.tld>, and your friend is a fan of the team, and he operates a purely non-commercial fan site with no advertising revenues, whatsoever, he might get to keep it. The law is grey on the issue and other factors can come into play, such as how long he's had the name for, what other names he has, etc. The closer a fan site is to the exact name of a celebrity or team, the harder it can be to convince some judges and panelists that the name was registered in good faith.
Brett Lewis
www.lewishand.com
www.trademarkattorneys.com