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Using LTIR To Beat The Salary Cap

We are a couple days into the new NHL season and there are already five teams that are on pace to exceed the salary cap this season.  They are the Boston Bruins, Calgary Flames, New Jersey Devils, Philadelphia Flyers and Vancouver Canucks.  All of them knew that they would have salary cap issues after their rosters took form this summer and planned to use injuries to solve them instead of having to make player moves that are hard to reverse (either trades which are irreversible or sending players to the minors who will require waivers and re-entry waivers to get back into NHL spots).

Each of these teams made an effort to get as close to the salary cap as possible when neglecting their injured players because as soon as a player is placed on long term injured reserve, they are able to exceed the salary cap by up to the salary cap hit of the injured player if his replacement places them over the salary cap.  Thus if there is an injured player with a $3 million salary cap hit, the goal is to make your team salary cap (excluding that player) as close to the $59.4 million cap.  Then you can exceed the cap by as much of the injured player’s $3 million salary as possible for as long as he stays hurt.

In order to do this, teams made some roster moves that are otherwise unexplainable.  For example, the Vancouver Canucks roster on opening day included goaltender Eddie Lack, defenceman Lee Sweatt and forward Cody Hodgson.  None of these players are actually expected to play with the team - unless they become call-ups as the season progresses.  All of these players have bigger salary cap hits than Cory Schneider, Jeff Tambellini and Alex Bolduc who are actually going to play and have been recalled before the Canucks first game.  This allows the Vancouver Canucks more salary cap space as long as Sami Salo and Alexandre Burrows remain on the long term injured reserve. 

The Canucks had been rumored to be on the verge of making a trade to dismantle their defence by trading a key player, likely Kevin Bieksa to make the salary cap.  They never made this move due to the extra salary cap room that injuries allowed.  As soon as Sami Salo tore his Achilles tendon, the Canucks knew that that kind of a move would be unnecessary.  In some ways, they are just as happy to see Salo hurt as they do not have to make a trade they did not want.

Calgary demoted then recalled defenceman Brett Sutter on back-to-back days for salary cap purposes.  They have David Moss, Daymond Langkow and Ryan Stone all injured.  In order to come as close as possible to the salary cap with their injuries, they wanted to pretend Ales Kotalik was healthy and take his salary cap hit in the first day cap hits counted and then put him on long term injured reserve the next day.  The injured Kotalik took Sutter’s roster spot for his one fictional day of health before he was listed as injured. 

The New Jersey Devils started the season with Bryce Salvador and Anssi Salmela injured.  In order to have as much salary cap room as possible in for their long term injured reserve placement of Salvador, they had Matt Taormina on their roster as of the first day of the salary cap calculation and recalled Adam Henrique in his place.  New Jersey had been rumored as a team that seemed likely to be making a salary cap related trade as their signing of Ilya Kovalchuk placed them above the cap.  They may still have to do something to get below the salary cap when Bryce Salvador gets to be healthy, but look for him to not be declared healthy until another injury opens up salary cap room.  In fact in the first year of the salary cap, New Jersey had defenceman Richard Matvichuk on long term injured reserve the entire season, except for the final game of the regular season and the entire playoffs, when they finally had enough salary cap room to re-activate him.  If the appropriate injury does not come along, New Jersey might keep Salvador injured for far longer than his medical situation should require.

Philadelphia kept Andreas Nodl on their roster for one extra day to maximize their salary cap space with Ian Laperriere and Michael Leighton on the long term injured reserve.  In fact there has been some discussion about Laperriere retiring due to his concussion issues, but I think the Flyers asked him not to.  They would much rather keep him on LTIR.  This allows them to exceed the salary cap by a larger margin than they otherwise would be able to.  While that margin is the salary that they are paying to Laperriere, that room can be used later on in the season for a player with a higher priced contract and bigger salary cap hit than they otherwise would have had room for at that point.

Boston did not make any roster moves that are as hard to explain in order to maximize salary cap room with Marc Savard, Marco Sturm and Trent Whitfield injured.  They already had over $7 million in extra cap space due to the amount of players who are injured.

The problem with these rules is that teams are making moves that are really hard to understand.  You have to be a diehard hockey fan with some significant understanding of the CBA in order to make sense of all the early season moves.  Players “make the team” and then get sent to the minors before the first game of the season and other players get sent to the minors then called up before the first game.  This doesn’t make any sense.  It is needless complication that makes the game harder to understand. 

In order to try to track salary cap situations such as this the best site on the internet is capgeek.  I don’t have any problem with teams making moves like this to maximize their advantage.  I do have a problem with a system existing where such moves should matter.  That system is unnecessarily difficult and hard for the fan to understand.

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J.J. from Kansas's avatar

look for him to not be declared healthy until another injury opens up salary cap room. 

If the appropriate injury does not come along, New Jersey might keep Salvador injured for far longer than his medical situation should require.

I know this isn’t the way LTIR is designed to work and I very sincerely hope that it isn’t the way it actually works, because doing what you’re saying they’ll do involves collusion of team doctors, team executives, and the player involved.  I don’t know why a player would agree to be kept on LTIR longer than his medical situation would require.

The Philadelphia situation with Laperriere’s status would not give them “extra room” against the salary cap.  They have to remain cap compliant with their active roster at all times. 

What this is doing behind the scenes on the long-term scale is adding to the actual club salary paid, which is the basis for calculating escrow.  A player in the minors or in Europe means his salary isn’t factored into the players’ share when the numbers dictate how much is owed back to the league.  Having a player on the roster, but on LTIR instead of buried in the minors gives the teams a small, but measurable break in how much they’re spending on salaries.

I hope that in the next CBA, they fix this loophole.  I would suggest that every salary over the AHL maximum that the team has for a player, regardless of whether he’s on injured reserve or in the AHL or in Europe, counts against the cap (which would have to go up to accomodate the extra space.)

Posted by J.J. from Kansas on 10/09/10 at 12:38 PM ET

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imageThe Puck Stops Here was founded during the 2004/05 lockout as a place to rant about hockey. The original site contains over 1000 posts, some of which were also published on FoxSports.com.

Who am I? A diehard hockey fan.

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