The LTIR Question Thread
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Michael Farkas
Celebrate 68
I have distanced myself from CBA things in recent years. But my understanding now is that there are two types of LTIR. LTIR in the offseason (or, prior to the season...if differentiation needs to be made) and in-season.
There are different ramifications between enacting it prior to the first season day vs the in-season variety that we were all so used to. I think many readers (including the author) would enjoy the Explain It Like I'm 5 version of the differences between those two (or more?) version of LTIR.
Thank you.
There are different ramifications between enacting it prior to the first season day vs the in-season variety that we were all so used to. I think many readers (including the author) would enjoy the Explain It Like I'm 5 version of the differences between those two (or more?) version of LTIR.
Thank you.
mouser
Business of Hockey
There are actually three kinds of LTIR:
A) LTIR in the regular season.
B) LTIR on the final day of training camp to be cap compliant for the regular season.
C) LTIR during the offseason
(A) LTIR in the regular season requires the team to first be cap complaint, whether that's on day 1 or any other day of the season before exercising LTIR. The amount of relief available to the team is based on the team's Averaged Club Salary at the time of the LTIR. Short and simplified version is the team can replace the LTIRed player's contract even if it would have caused the Averaged Club Salary to go over the Upper Limit.
example: Cap of $81.5m, team has a Averaged Club Salary of $80.9m and places a $2m player on LTIR day 1 of the season. The team can now have a maxed Averaged Club Salary of $81.5m and exceed the Upper Limit by $1.4m, for a total cap of $82.9m.
(B) LTIR on the final day of training camp is usually only done when it's impossible for the team to be cap compliant on Day 1 of the season and use option (A). With option (B) the team's Averaged Club Salary is calculated on the final day of training camp and a player or players are placed on LTIR to satisfy the amount the Averaged Club Salary is over the Upper Limit. One notable difference with (B) is that LTIR generates no extra space--the team enters the season with zero free cap space. Note that the roster on the final day of training camp must be a legal roster with 20-23 players on the Active Roster.
example: Cap of $81.5m, team has an Averaged Club Salary of $82.6m and places a $2m player on LTIR on the final day of training camp. The team can now have a max Averaged Club Salary of $81.5m and exceed the Upper Limit by $1.1m for a total cap of $82.6m (the amount on the final day of training camp). The LTIR player is considering to "fulfill" the overage with no free space remaining.
(C) LTIR during the offseason works the same as (A) except it applies to the summer 110% cap. Note this LTIR doesn't carry over to the regular season, a team using (C) will still probably need to do (A) or (B) to be cap compliant for the regular season. To my knowledge Toronto this summer is the first time it's ever been used. (Yes, Toronto claimed they could do it a couple summers ago but never ended up doing so)
Given the choice between (A) and (B) more often (A) will generate greater cap relief for the team and is preferred over (B). However this isn't a hard rule and there can be scenarios where (B) will result in greater relief.
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So with regards to example B, the LTIR on the final day of training camp, if the LTIR player returns at some point in the season, does the team then need to make other moves to drop salary? Possibly they do not have to do so right away due to pro-rating if it's early enough in the season, but just by the end of the season.
mouser
Business of Hockey
To activate a player off LTIR the team must bring their Averaged Club Salary to less then or equal to the Upper Limit. If the team has been using LTIR space consistently since day 1 of the season then the team will have accumulated zero payroll room, and thus simply needs the active roster to have total AAV less then or equal to the Upper Limit.
Continuing with our example (B): Team has been running a max roster of $82.6m since day 1 of the season. When the LTIRed player with the $2m AAV contract becomes healthy to play the team will have to reduce their roster AAV back down to be $81.5m or less. So in short the team needs to shed $1.1m AAV in contracts to activate the LTIR player.
The equations become more complicated if the team has a player on LTIR, but is actually accumulating payroll space because they aren't using a single dime of LTIR relief. Pittsburgh for example is in this situation--they have players on LTIR but have actually reduced their payroll below where it was at the time LTIR was activated.
To deal with this the LTIR formula calculates a figure called the Accurable Cap Space Limit (ACSL). The ACSL is set to whatever the team's Averaged Club Salary was on the day the LTIR was activated for (A) and set to whatever the Averaged Club Salary was on the final day of training camp minus the LTIR players for (B). If we look at Pittsburgh for example their ACSL is $81,431,625. As long as Pittsburgh runs a roster below this $81.43m figure (i.e. using zero LTIR relief) they will accumulate payroll room.
Returning once again to example (B): The team's ACSL would have been $80.6m. If the team operated below $80.6m for one or more days during the season then it would have banked some payroll room and the amount necessary to activate the player from LTIR would be less then the $1.1m AAV required when there's no payroll space.
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Thanks, really sound explanation even if I had to read through it twice. A quick, maybe unrelated follow-up; the CBA appears to not cover all the aspects of LTIR and probably some other stuff. Is there a publicly available source for this, or is it simply gleaned piece-meal from interviews and inductions from transactions?
mouser
Business of Hockey
The CBA covers the high level LTIR concept, but many of the mechanics of how LTIR is implemented are in unpublished side agreements or other non public documents. The best source I’m aware of right now for LTIR is Capfriendly’s FAQ. It includes many details like the ACSL that aren’t mentioned in the CBA,
LTIR FAQ - CapFriendly - NHL Salary Caps
GoBluz24
Established 1967
mouser
Business of Hockey
There is no pro-rating of LTIR relief. At the moment CF shows St Louis with a ACSL of $81.354m and a projected cap of an identical $81.354. So the Blues have $7.5m of untapped LTIR relief and could run a cap up to $88.854m.
If nothing else changed going forward the Blues could add $7.5m AAV in contracts to the roster today. Or they could wait a couple months and add $7.5m AAV in contracts to the roster. Or on the trade deadline they could add $7.5m AAV of contracts.
Unused LTIR Exception space effectively disappears. It doesn’t bank up to allow a team to add more AAV in the future. That’s the main difference between have unused LTIR relief and having unused Payroll Room by being under the cap. A hypothetical team with $7.5m in free Payroll Room could add $15m AAV in contracts at the halfway point of the season or $34.9m AAV in contracts at the trade deadline.
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GoBluz24
Established 1967
Tank's for taking the time to explain this. It sure would be nice to get Hall or Kieder by the trade dead line, even if only for a rental.
Context, Kyle Okposo just went down with his 4th concussion.
Question:
If KO and the Sabres both decide, "yeah we're done here," and put him on LTIR, can he stay there even if he could or did clear the concussion protocol? Would the NHL step up and argue that this is cap circumvention. Would whoever insures that contract contest it?
Also, if KO just retires, would the Sabres be subject to a cap penalty?
Question:
If KO and the Sabres both decide, "yeah we're done here," and put him on LTIR, can he stay there even if he could or did clear the concussion protocol? Would the NHL step up and argue that this is cap circumvention. Would whoever insures that contract contest it?
Also, if KO just retires, would the Sabres be subject to a cap penalty?
Might need a doctor to recommend that he not return to the ice.
last thing a player should do is continue playing when they are at greater risk and end up suffering symptoms throughout the term of their contract like savard, Pronger.
last thing a player should do is continue playing when they are at greater risk and end up suffering symptoms throughout the term of their contract like savard, Pronger.
Sheppy
Registered User
tony d
Registered User
He should stop playing. Whether that means he can go on LTIR to collect the remainder of his contract or if he can't do that, then he should retire. Last thing he should want is to suffering from PCS for the rest of his life.
mouser
Business of Hockey
If the team doctor(s) and potentially an independent doctor brought in by the NHL agree that Okposo should stop playing hockey then the NHL won't contest it.
Whoever insures the contract probably has an option to have the player examined by other doctors to confirm the diagnosis. Also, Okposo did have at least one concussion prior to signing this contract. It's possible, though I'd guess unlikely, that the contract is not insured for further concussions.
If Okposo retires then he receives no further money and there's no cap penalty. Meaning it's unlikely he would retire, but rather go on permanent LTIR.
