Tag Archives: NHL Salary Cap

2021 NHL Playoffs, 2021 NHL Salary Cap, 4 Amigos, Dominic Tiano , , , , , , , , 2 Comments

Dominic Tiano: Circumventing the NHL Salary Cap- If It Walks Like A Duck…

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Dominic Tiano, the resident expert on most matters CBA-related, provides a quick primer on ways that teams are taking advantage of the existing framework to potentially manipulate the salary cap. You’ve probably seen the chatter on Twitter and social media in general, but “The Dom” breaks it down for the rest of us in a manner that’s easy to understand and provides some ideas to keep this from becoming a growing trend league-wide. -KL

What do Nikita Kucherov, Steven Stamkos, Freddie Andersen, Michael Kempny and Evgeni Malkin have in common?

All have missed significant time (in Kucherov’s case, the entire season) which allowed their teams to exceed the NHL salary cap with the Long-Term Injury Exemption known as LTIR.

The problem is, what their respective teams have done does not break any NHL rules. It’s also allowed those teams to go out on trade deadline and make improvements to their rosters in their quest for the Stanley Cup.

And now, they are all set to return at some point in these playoffs because there is no salary cap in the playoffs.

It gets even stranger.

Alex Steen of the St Louis Blues officially announced his retirement on December 17, 2020 yet the Blues used his entire cap hit of $5,750,000 (and then some) on LTIR.

While there has to be some mechanism in place that allows a team to replace a player who is out with a bona-fide long term injury, the NHL and the NHLPA need to sit down and take a look at what some teams are doing, although the latter may not want a change as it puts more money in the player’s pockets.

How would you feel if the Boston Bruins lost Patrice Bergeron for a season and couldn’t replace him because there was no LTIR?

But the NHLPA may want to look a little closer. You need not go back any further then the 2019-20 season when the Ottawa Senators had a whopping $15 million plus tied up in players on LTIR. Marian Gaborik, Ryan Callahan and Clarke MacArthur never played a game and spent the entire 186 days of the NHL season on LTIR. And even though the Sens never used a penny of that LTIR, what did it accomplish? It got them to the cap floor without spending a penny of Eugene Melnyk’s money because they were paid by insurance. That kept money out of other player’s pockets.

If you could ask any General Manager how they feel about the situation, I would be willing to bet that the overwhelming majority have no issue with it because they know one day, it could be them that need to use that avenue.

But ask the now 32 team owners and you would get a different response because it now actually involves dollars. And none may be more vocal than Chairman of the Board and Bruins Owner Jeremy Jacobs who was one of the leaders of bringing in a salary cap. And he carries a lot of weight.

Chris Johnston of Sportsnet said on a Hockey Night in Canada Broadcast that the League is saying “we’re going to watch you closely.”

Well Gary Bettman, the time has come. The playoffs are here.

I’m not one to defend Bettman and his right-hand man Bill Daly but in fairness, they have done a marvelous job along with the NHLPA and the players to make sure the Stanley Cup was awarded last season and we had some sort of season this year.

And their main concern has been to make sure that we get through the season and that we have a normal season next year. They’ve also had to negotiate two massive (in hockey’s case) American Television contracts.

Again Mr. Bettman, the time has come.

There are no easy fixes, but I will take a stab at it.

This is the way The Dom would rectify it:

1- Even though there is no salary cap in the playoffs, rosters must be cap compliant. You could also set an arbitrary cap like the offseason cap. Make it so teams could go over by 5% to carry their “black aces”.

2- If a player misses an entire season due to being on LTIR, then he is not eligible for the playoffs.

3- You can not trade a player who is on LTIR. Personally, I’ve never understood this. If you can’t buyout a player who is injured, why should you be allowed to trade him?

4- If a player officially retires, there should be no LTIR associated with him.

5- If a player is deemed to have a bona-fide injury and is going to miss 10 games or 24 days (the minimum required to go on LTIR), then the LTIR space allowed is based on the team’s “new” salary cap on the day of the injury. Right now, a team is allowed to make recalls to get as close as possible to the salary cap to maximize LTIR.

Example: With a salary cap of $81.5 million, if a team has a cap hit of $80 million, they can recall player(s) making up to $1.5 million to get to the upper limit. If a player with a $5 million cap hit goes on LTIR, they can then exceed the cap to $86.5 million. Under my scenario, the team’s cap hit on the day of the injury would be used, or $80 million making their new “upper limit” $85 million.

If you have any ideas, post them in the comments below!

Enjoy the Stanley Cup Playoffs!

2021 NHL Salary Cap, Boston Bruins, Dominic Tiano , , , , , , , , 2 Comments

Dominic Tiano: Salary Cap 101- Explaining the Bruins’ Cap Situation

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Dominic Tiano provides this helpful tutorial on NHL capology and how the constant juggling act currently affects the Boston Bruins. We couldn’t break it down and answer your many questions about the nuts and bolts of the NHL’s economics without our resident capologist and 4th Amigo- KL

I never would have imagined that one tweet about deadline cap space would generate as many questions as it has. With that said, I will try and explain it in detail what that means as your Boston Bruins enter uncharted territory (for them) with a boat load of cap space and how the brain trust of Don Sweeney and Evan Gold use it to their advantage.

To begin with, there are two changes that you’ll have to remember. First, a normal NHL season usually has 186 days in that season. Because of the shortened season, that number is now 116. Second, there are 26 days remaining in the season after trade deadline.

The next focus is on the taxi squad. The taxi squad is considered being in the AHL, so while a player is on the taxi squad, his cap hit does not count. The NHL cap is calculated daily so when a player is on the taxi squad, his cap space is not being counted towards the cap, thus “banking cap space”.

The best way to explain that is to use Trent Frederic as an example since the Bruins have used him the most in paper transactions to bank some cap space. Frederic carries a cap hit of $925,000 and that is what the Bruins would be charged if he were to remain on the roster for the full 116 days.

Today marks day 26 of the NHL season. Frederic has been on the NHL roster for only 14 of those days with the other 12 on the taxi squad. If you take $925,000/116 that gives you a daily cap hit of $7,974. By sending Frederic to the taxi squad his accumulated cap hit is now $7,974 X 14 or $111,638 where as if he remained on the roster throughout the full 26 days it would be $7,974 X 26 or $207,325. That’s a savings of $95,687. (numbers are rounded as we aren’t using fractions of dollars).

The affects can be seen in the following charts:

The cap hit is calculated by the cap hits of the players on the roster and those that have been on the roster at any point during the season. Earned bonuses have no current affect as they are not charged to the team until the end of the season, although they may want to plan for it.

The projected cap space is what you need to focus on here (ignore the Deadline Space for now, we’ll explain that later). The projection is based on the current roster if it remains the same until the end of the season. However, we know that it will not and there will be changes almost daily.

As you can see, the Bruins cap space projects to be $3,578,368 if the roster remains unchanged until the end of the season with a Deadline Space of $15,965,026 (again, we will explain Deadline Space later). 

The chart below shows the difference between moving Frederic up and down to the taxi squad and if he had remained on the roster for the full 116 days of the regular season. 

As you can see, the projected cap space decreases to $2,765,006 and the deadline space to $12,336,181 (I promise we will get to the Deadline Space).

While it’s true the difference between Frederic’s current cap hit (14 days on the roster) and his $925,000 normal cap hit is substantial, thus skewing the numbers a bit, it must be remembered that at some point Jake DeBrusk, Jack Studnicka and Ondrej Kase are going to come off of injured reserve. That would put the Bruins at a 24-man roster therefore, someone is going to have to go back down to the taxi squad to get to the 23-man roster limit (barring any further injuries) so the numbers aren’t really that skewed.

Now, to the dreaded deadline space.

The replies I have received suggest it is some form of cheating and that they can exceed the cap. That’s not true and I hope this will clear that up for you. Deadline space is the average annual value (AAV) of contracts that can be added and still remain compliant at the end of the season.

If you refer to the second chart above again, the Bruins have $12,336,181 in deadline space. That means they can add two players with an AAV of $6 million each and still remain cap compliant at the end of the season.

Remember, the cap is calculated daily, and there are only 26 days remaining in the season after trade deadline, so the actual cap hit to the Bruins is $6 million/116 for a daily cap hit of $52,724 and over 26 days that’s a cap hit of $1,344,824. For two players carrying an AAV of $6 million that comes to $2,689,648, and that puts them below the $2,765,006 in the cap space they would have had at the end of the season.

So, the question becomes “how do you know what AAV you can add at trade deadline and remain compliant?”

If you don’t want to dig out your calculators that’s okay, I will do the math for you!

Using the second chart, if you take the Projected Cap Space of $3,578,368 and divide it by 26 (the number of days remaining after trade deadline) that gives you the daily cap space of $137,630. If you then multiply that by 116 (the number of days in the NHL season) that gives you $15,965,026 or the AAV that can be added at trade deadline and remain cap compliant.

I hope that clears it up for you.