FTF Example: The salary cap Upper Limit is $60.0MM, and a team currently has a 20 man roster of $59.0MM. There is $1.0MM in cap room available to them. In the first day of the regular season, a player making $2.0MM is hit along the boards, injured, and subsequently placed on LTIR. The team now has that $2.0MM to use in order to bring in replacement player(s) to fill the hole left by that $2.0MM player-- that number is equal to the injured player's salary. They are able to spend up to $61.0MM (or, $1.0MM over the cap) to replace that player.
This is because, at the time of injury, the team had $1.0MM in cap space available to them. Since the injured player on LTIR had a salary of $2.0MM, $1.0MM of that goes towards getting the team to the Upper Limit of that year (which is $60.0MM), and then the remaining $1.0MM is used to allow the team to temporarily exceed the Upper Limit until the player on LTIR is able to return.
Think of it this way-- a $2.0MM player was injured on a team that had $1.0MM in cap room. The cap hit of the injured player ($2.0MM) minus the amount of salary cap space ($1.0MM) equals the amount that team can exceed the upper limit by ($1.0MM).
Originally Posted by Fear The Fin
FTF Example Two: The salary cap Upper Limit is $60.0MM, and a team currently has a 20 man roster of $60.0MM. Right at the limit, absolutely no breathing room. In the first day of the regular season, a player making $2.0MM is hit along the boards, injured, and subsequently placed on LTIR. Using the formula in the last paragraph of example one, we know that the team now has $2.0MM to use to exceed the Upper Limit and bring up players.
However, as we've learned, the player on LTIR still counts against the team's year end cap when he's injured. By promoting a player, they will be over the year end cap and not compliant with the CBA. So what gives? Essentially, if this situation were to occur, a team would have to trade a player right before the injured player returns in order to become salary cap compliant.
I think most of us knew, or at least somewhat knew, how this worked. I just thought it might be useful to anyone that didn't know.
Last edited by BuddyMcCormick: 12-01-2010 at 11:13 PM.
most teams only carry insurance to cover 100% of the top five salaries on their roster. the Wild carry insurance to cover 100% of their top five and then 80% of the next five.
I think... without looking it up... this season is...
Harding doesn't qualify for the insurance coverage. Sheppard is suspended.
The wicket gets sticky with Latendresse, because if he comes back after the trade deadline, we'd have to dump salary into Houston. Pretty sure LTIR isn't pro-rated either.
I had asked Russo about the insurance coverage the Wild carry in the pre-season, after Harding went down. Harding is basically a non-recoverable loss, money wise, but putting him on LTIR is also a wash, because if he comes back post trade deadline, we have to eat salary in the AHL.
From my understand, from what I have read, is that ANY player can be put on LTIR. You will only get that amount of money "taken off the books" when you go over.
Now from what you said I would imagine that the Wild would have to pay the likes of Harding out of pocket. So essentially, this year they are paying for Backstrom, Theodore, and Harding. With Harding being a "ghost" cap hit.
Whereas, with Bouchard being out on LTIR. Insurance would cover the payment of Bouchard, while he was on LTIR, and the Wild wouldn't be paying him out of pocket.
I'm not entirely sure that made sense, but I tried my darnedest.
yes, that would be the case, which is why insurance makes it even more complex when considering LTIR.
if Harding were to hypothetically be placed on LTIR and the Wild are currently at the exact spot they are with the cap, we'd basically have a little under a million to spend over. harding's salary comes directly out of leipold's pocket in that situation.
with latendresse, i *think* his salary is covered 80%... not sure. so all leipold would have to pay out of pocket is the remaining 20%.
really, it only makes sense if you are sure the player is out for the entire season, like bouchard, last year.
I agree. Again, I thought this might be useful to the people that might not be exactly sure how it works and in insurance and it's a nightmare lol.
I also agree upon the only put a player on LTIR if they are done for the year, and even then it can be dangerous. If everyone gets a chance to read that ESPN article it actually dives into the Bruins and Flyers situation a bit and how they came to be there.
For those you despise ESPN, it basically states that even with places a player on LTIR is dangerous to do so when your team has players with incentives. I believe that if you place a player on LTIR and end up spending that amount(which puts you over the cap) that incentives would put you over the cap and the team in penalized the following year.
yeah, this is a topic that caused some animosity towards me over on the wild official boards during the gaborik issue. someone over there was "swearing" that the player's salary came off the books. it doesn't. a few posters were also like "oh! we can go 7 million over the cap!" uhm, no... not really.
i dunno. it's always made sense to me. the Wild don't really have many incentive based contracts, though, so the part about bonuses really only would apply to wellman and sheppard, i think.
Well.. essentially they could have spent 7 million over the cap while Gabby was hurt. Assuming we were at the cap. The problem would have been when Gabby came back, we would have been 7 million over what we could be.
The LTIR makes sense, but it can take a bit to grasp especially when you throw in insurance issues. As a side note, I know you can keep a player on LTIR, at least I've read you can. If that player is healthy, does insurance still play for said player, being that insurance is to pay for injured players?
a team could try to keep a player on LTIR for as long as they want. however, the player, his agent, and the NHLPA would make a stink about it if they kept a healthy player on the LTIR status. that would trigger a league investigation.