Hockey 101 will be an ongoing feature throughout the season where Plank looks at aspects of the NHL that are receiving a lot of questions in the comments section of Fear The Fin. Today's lesson will be on the Long Term Injured Reserve.
LTIR has always been a difficult aspect of the CBA to pin down-- there's a lot of misinformation out there on the subject, and the actual enforcement of the rule runs counter-intuitive to how one would expect it to be implemented. Of course everyone realizes that the LTIR is reserved for players who have been hit with some form of long-term injury or another, but how does it effect everything else on the roster? Can players be promoted? What about the cap hit? What happens to his salary?
It's no surprise there's some confusion out there.
Today we'll try to change all that, as well as give all of us a handy place to refer back to if the question ever pops up again.
Let's start with the relevant section of the CBA, Article 50.10. It breaks down the process a team needs to go through in order to put a player on the Long Term Injured Reserve:
(d) Bona-Fide Long-Term Injury/Illness Exception to the Upper Limit. In the event that a Player on a Club becomes unfit to play (i.e., is injured, ill or disabled and unable to perform his duties as a hockey Player) such that the Club's physician believes, in his or her opinion, that the Player, owing to either an injury or an illness, will be unfit to play for at least (i) twenty-four (24) calendar days and (ii) ten (10) NHL Regular Season games, and such Club desires to replace such Player, the Club may add an additional Player or Players to its Active Roster, and the replacement Player Salary and Bonuses of such additional Player(s) may increase the Club's Averaged Club Salary to an amount up to and exceeding the Upper Limit, solely as, and to the extent and for the duration, set forth below.
In order to qualify for placement on the Long Term Injured Reserve (henceforth referred to as the LTIR), a player must be deemed to be unavailable for 24 days and 10 NHL games. If that is satisfied, a player can be placed on the LTIR.
So what happens then? How does it effect the cap space a team has to fill their roster?
(ii) The Player Salary and Bonuses of the Player that has been deemed unfit-to-play shall continue to be counted toward the Club's Averaged Club Salary as well as count against the Players' Share during the League Year in which the Player is deemed unfit-to-play (including during the period such unfit-to-play Player is on a Bona Fide Long-Term Injury/Illness Exception Conditioning Loan to another league);
This means that a player on LTIR doesn't really "come off the books"-- as we'll see later, all it does is grant the team a bit of leeway when promoting players to fill the roster spot vacated by the injured player. He still counts against the year end cap when he is on the LTIR, and doesn't allow the team to gain salary cap space the way sending a player down to the minor league affiliate would. This is a very important note, and where some individuals begin to become confused.
Think of it this way-- everyone remembers the Worcester Shuttle from last season, where San Jose would send down players on an almost daily basis to their minor league affiliate in order to create cap space. LTIR is not like that at all. It does not create cap space in respect to the year-end cap.
So what does it do? Why would teams utilize this tool?
(iv) The replacement Player Salary and Bonuses for any Player(s) that replace(s) an unfit-to-play Player may be added to the Club's Averaged Club Salary until such time as the Club's Averaged Club Salary reaches the Upper Limit. A Club may then exceed the Upper Limit due to the addition of replacement Player Salary and Bonuses of Players who have replaced an unfit-to-play Player, provided, however, that when the unfit-to-play Player is once again fit to play (including any period such Player is on a Bona Fide Long-Term Injury/Illness Exception Conditioning Loan to another league), the Club shall be required to once again reduce its Averaged Club Salary to a level at or below the Upper Limit prior to the Player being able to rejoin the Club.
Essentially, this allows a team to replace the player on LTIR with any number of other players in order to fill the roster hole. The wording in this passage is quite verbose and involved, so a quick and dirty example should serve our purposes fine:
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).
So now let's take the two ideas together-- since the player on LTIR counts against the year-end cap, but the team is allowed to exceed the Upper Limit, couldn't that pose some issues for teams who are close to the Upper Limit already?
Yes, yes, and most definitely yes. In this example, we'll look at what would happen if a capped team was forced to place a player on the LTIR:
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.