LTIR - The Basics Please

[Bobieque]

All, as it's the dog days of summer...this may be the time for this thread.

I need help understanding LTIR, and I know we have several experts in HFOil.

To make it simple: I get that we have Klefbom at $4.16 M as a salary.

We put him on LTIR, and that means we can exceed the cap by $4.16 M with a replacement.

Questions (remember I need simple explanations):

1. Why would any team want to trade for someone on LTIR to assist in cap management?

2. Why is LTIR less advantageous than cap room at the trade deadline? I'm confused on accumulation.

Thanks, I figured this topic would get lost if posted during the season. My thanks in advance to those that are more familiar with this and can teach me.

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[McDNicks17]

1. There's a few reasons teams would trade for LTIR players.

a) Most players in LTIR are covered by insurance, so tanking teams can add the player's cap hit to reach the cap floor, but not actually have to pay the player's salary. Recent examples being Ben Bishop in Buffalo or Brian Little in Arizona.

b) If you're in LTIR, there's basically no drawbacks to adding more. The recent Dadonov for Weber trade is an example. Vegas needed cap space and essentially traded Dadonov's contract without any salary coming back because Weber will be on LTIR.


2. The big reason why LTIR is worse than cap space is because you don't accrue cap space while on LTIR.

The cap is actually calculated daily. Think of it almost as a daily allowance. You get the salary cap divided by 186 days for each day of the season. I think that was roughly $440k per day last year. Let's say you aren't on LTIR and your team's daily cap hit is $400k. That means you accrue $40k that day and carry it forward in the season. You can then use those accrued savings later in the season to exceed the daily cap. That's what let's you trade for rentals that would seemingly put you over the cap.

When you're on LTIR, you don't accrue those savings. As Holland said, it's dollar in, dollar out. You never have savings to exceed the daily cap, so you have to send out as much cap as you bring in.

 

[Bobieque]

1. There's a few reasons teams would trade for LTIR players.

a) Most players in LTIR are covered by insurance, so tanking teams can add the player's cap hit to reach the cap floor, but not actually have to pay the player's salary. Recent examples being Ben Bishop in Buffalo or Brian Little in Arizona.

b) If you're in LTIR, there's basically no drawbacks to adding more. The recent Dadonov for Weber trade is an example. Vegas needed cap space and essentially traded Dadonov's contract without any salary coming back because Weber will be on LTIR.


2. The big reason why LTIR is worse than cap space is because you don't accrue cap space while on LTIR.

The cap is actually calculated daily. Think of it almost as a daily allowance. You get the salary cap divided by 186 days for each day of the season. I think that was roughly $440k per day last year. Let's say you aren't on LTIR and your team's daily cap hit is $400k. That means you accrue $40k that day and carry it forward in the season. You can then use those accrued savings later in the season to exceed the daily cap. That's what let's you trade for rentals that would seemingly put you over the cap.

When you're on LTIR, you don't accrue those savings. As Holland said, it's dollar in, dollar out. You never have savings to exceed the daily cap, so you have to send out as much cap as you bring in.

Thanks, much appreciated, I'll have to mull over 2 and may come back with more questions.

 

[Drivesaitl]

All, as it's the dog days of summer...this may be the time for this thread.

I need help understanding LTIR, and I know we have several experts in HFOil.

To make it simple: I get that we have Klefbom at $4.16 M as a salary.

We put him on LTIR, and that means we can exceed the cap by $4.16 M with a replacement.

Questions (remember I need simple explanations):

1. Why would any team want to trade for someone on LTIR to assist in cap management?

2. Why is LTIR less advantageous than cap room at the trade deadline? I'm confused on accumulation.

Thanks, I figured this topic would get lost if posted during the season. My thanks in advance to those that are more familiar with this and can teach me.

Thanks. I never understand this and probably won't even after this thread. So glad we have income tax software now. heh.

I got lost on 1B.

If I read anything where theres 12 points and 53 sub conditions and 38 clauses my mind melts. I just put it down and never go back to it.

This is me: