How does ltir work Re: Smid

[KPat99]

I'm just looking for some classification regarding Smid as I have heard people saying maybe his cap hit is holding up Johnny's contract. The way I understand it is that you only gain the cap space rewards of the difference between your cap and the guy going on ltir, so if you have 7 mil in cap space you would get no relief but if you had no room you would gain the full value of his contract in relief. Thoughts?

Sent from my LG-H812 using Tapatalk

[AC]

That seems to be the suggestion from CapFriendly.

Basic Formula
This formula is used throughout the season and during the off-season
Amount team can exceed the cap = Cap hit of LTIR player - Amount of cap space available

Basic Formula Example
The league upper limit is $69M. A team has an averaged club salary of $68M and a player with a cap hit of $5M becomes injured and the team places him on LTIR. The team is now permitted to spend up to a new limit of $72M:
Cap hit of LTIR player is $5M
Amount of cap space available to team = $69M - $68M = $1M
Amount team can exceed the cap = $5M - $1M = $4M
New limit = $68M + $4M = $72M

https://www.capfriendly.com/ltir-faq

So the roster moves tomorrow might be pretty fast and furious.

[KPat99]

That's what I thought but I wanted to see some people clear it up for me.

Sent from my LG-H812 using Tapatalk

[taxbuster]

Seems to me there was a comment in the (overwrought) Johnny thread about a difference between putting LS on LTIR before or after the season had begun. Is there actually a difference in allowed amount, or does it simply not matter until final rosters/cap compliance date?

[14]

LTIR does not come into play till game #1 of regular season and you hae to be witin the Cap on that date also.

[getbak]

Until Gaudreau is signed, the Flames aren't anywhere close to the cap, so LTIR doesn't matter. Once he is signed, they'll want to be as close to the cap as possible with Smid's salary on the books so that they can maximize the LTIR space available.

Giordano, Mark		$6,750,000.00
Monahan, Sean		$6,375,000.00
Hamilton, Dougie	$5,750,000.00
Wideman, Dennis		$5,250,000.00
Brodie, TJ		$4,650,400.00
Brouwer, Troy		$4,500,000.00
Frolik, Michael		$4,300,000.00
Backlund, Mikael	$3,575,000.00
Smid, Ladislav		$3,500,000.00
Stajan, Matt		$3,125,000.00
Engelland, Deryk	$2,916,667.00
Elliott, Brian		$2,500,000.00
Bouma, Lance		$2,200,000.00
Johnson, Chad		$1,700,000.00
Bollig, Brandon		$1,250,000.00
Tkachuk, Matthew	$925,000.00
Bennett, Sam		$925,000.00
Jokipakka, Jyrki	$900,000.00
Ferland, Micheal	$825,000.00
Chiasson, Alex		$800,000.00
Vey, Linden		$700,000.00
Kulak, Brett		$656,667.00
Hamilton, Freddie	$612,500.00
	
Raymond, Mason (Buyout)	$1,050,000.00
	
Bonus Carryover?	$630,500.00
	
TOTAL:			$66,366,734.00

Available Cap Space: $6,633,266.00

That is a cap-compliant 23 man roster. The Flames could file that with the league tomorrow and be okay.


If Gaudreau's contract is high enough to put the Flames over the cap, they can do a paper transaction with one of the guys who have cleared waivers (Vey, Bollig) or one of the waiver exempt players (Bennett, Kulak) to bring the team into cap compliance (the closer to the cap, the better). Then, once they're compliant with Smid's salary on the books, they can put Smid on LTIR and create that extra cap space.

[AC]

Yes but the question was about how to maximize LTIR benefits. It sounds like you actually want to be as close to the cap as possible when you place Smid on LTIR.

[KPat99]

Ugh 6.6 isn't enough space for Johnny. Actually Bollig and Vey down plus a couple other paper transactions would more than get us there now that I think about it.

Sent from my LG-H812 using Tapatalk

[Finger Cookin]

Originally Posted by KPat99

Ugh 6.6 isn't enough space for Johnny. Actually Bollig and Vey down plus a couple other paper transactions would more than get us there now that I think about it.

Bollig and Vey alone would bring the available cap space up to about $8.28M, which should be much more than enough.

[KPat99]

Yeah I was half done the post when i started really thinking about it... Figured I might as well finish the thought

Sent from my LG-H812 using Tapatalk

[getbak]

Originally Posted by AC

That seems to be the suggestion from CapFriendly.

Basic Formula
This formula is used throughout the season and during the off-season
Amount team can exceed the cap = Cap hit of LTIR player - Amount of cap space available

Basic Formula Example
The league upper limit is $69M. A team has an averaged club salary of $68M and a player with a cap hit of $5M becomes injured and the team places him on LTIR. The team is now permitted to spend up to a new limit of $72M:
Cap hit of LTIR player is $5M
Amount of cap space available to team = $69M - $68M = $1M
Amount team can exceed the cap = $5M - $1M = $4M
New limit = $68M + $4M = $72M

https://www.capfriendly.com/ltir-faq

So the roster moves tomorrow might be pretty fast and furious.

I believe Cap Friendly's math is wrong here. It's all explained correctly, but they use the wrong number in the final calculation. They use the team's existing payroll total (68), rather than the Upper Limit (69) when calculating the new Upper Limit.

It should be 69+4 for a new limit of $73 million because the team can exceed the cap by the additional $4 million. They're a million under the cap and can use the player's $5 million cap hit in LTIR, but the first million of that counts towards the upper limit. They can exceed the upper limit ($69M) by an additional $4 million.




Here's the example that's in the CBA:

A Player with a Player Salary of $1.5 million becomes unfit to play for more than 24 calendar days and 10 NHL Regular Season games. At the time the Player becomes unfit to play, his Club has an Averaged Club Salary of $69.5 million, and the Upper Limit in that League Year is $70 million. The Club may replace the unfit-to-play Player with another Player or Players with an aggregate Player Salary and Bonuses of up to $1.5 million. The first $500,000 of such replacement Player Salary and Bonuses shall count toward the Club's Averaged Club Salary, bringing the Averaged Club Salary to the Upper Limit. The Club may then exceed the Upper Limit by up to another $1 million as a result of the replacement Player Salary and Bonuses. However, if the unfit-to-play Player once again becomes fit to play, and the Club has not otherwise created any Payroll Room during the interim period, then the Player shall not be permitted to rejoin the Club until such time as the Club reduces its Averaged Club Salary to below the Upper Limit.

To make it easy, here's how you would calculate the amount of LTIR space available for Smid this season:

LTIR Space = Smid's Cap Hit - (Team Salary Cap - Flames Payroll with Smid)

Plugging in the real numbers:

$3.5M - ($73M - Flames Payroll)

Moving the numbers around:

LTIR Space = Flames Payroll - $69.5M

Right now, the Flames payroll is less than $69.5M, so there would be no LTIR space created.


Now, let's say Gaudreau signs for $7.3M. To be cap compliant with today's roster, they'd have to send Vey to the AHL:

$66,366,734.00 (today's payroll) + $7,300,000 (Gaudreau) - $700,000 (Vey) = $72,966,734 (Cap Compliant w/Smid)

Plug that into the LTIR Space formula:

$72,966,734 - $69,500,000 = $3,466,734

That would maximize the LTIR space available.


There are a few different roster moves they could make to maximize the space available depending on how much Gaudreau signs for.

Either way, it's incorrect to suggest that the signing is delayed because they're waiting until after the roster deadline tomorrow to maximize the LTIR space available.

[taxbuster]

Originally Posted by getbak

Then, once they're compliant with Smid's salary on the books, they can put Smid on LTIR and create that extra cap space.

So then suspect that varies during the year with callups/send-downs.

The accountant in me imagines that there is a cap monitor on each team that makes sure that at noon (or whenever), the team is always cap-compliant. So, with Smid on LTIR, the Flames have a fair bit of wiggle room (assuming they keep whomever they need to be close to cap without him).

So why doesn't Smid just retire? I'd assume he still collects his insurance and then relieve the Flames of having to track him?

[sureLoss]

Originally Posted by taxbuster

So then suspect that varies during the year with callups/send-downs.

The accountant in me imagines that there is a cap monitor on each team that makes sure that at noon (or whenever), the team is always cap-compliant. So, with Smid on LTIR, the Flames have a fair bit of wiggle room (assuming they keep whomever they need to be close to cap without him).

So why doesn't Smid just retire? I'd assume he still collects his insurance and then relieve the Flames of having to track him?

After the start of the season, the NHL won't allow any roster moves that will make a team non-cap compliant. Pretty easy job, whenever a team makes a roster move they just quickly calculate if it will put them over the cap floor or ceiling.

And if a NHL player retires, his NHL contract stops being paid out regardless of insurance (assuming Smid's contract is even insured, which it might not be)

[taxbuster]

Originally Posted by sureLoss

And if a NHL player retires, his NHL contract stops being paid out regardless of insurance (assuming Smid's contract is even insured, which it might not be)

Thanks, sureloss. So, if I understand right, Smid wants to continue getting his money (who wouldn't?) and the only option the Flames have to recover the $$ is LTIR as they, like any other team, can't one-sidedly "retire" a player. They pay out the contract or buy it out if available and pay for the cap hit to do so.

[sureLoss]

Originally Posted by taxbuster

Thanks, sureloss. So, if I understand right, Smid wants to continue getting his money (who wouldn't?) and the only option the Flames have to recover the $$ is LTIR as they, like any other team, can't one-sidedly "retire" a player. They pay out the contract or buy it out if available and pay for the cap hit to do so.

Not sure what you mean by the Flames recovering the $$.

All LTIR does is allow the team to exceed the salary cap by the same amount of the cap hit as the players on the LTIR. Flames don't get any money back (unless his contract is insured, then they pay only a percentage of the salary). They are still on the hook for Smid's salary and still have his cap hit count against them. They can however add an additional $3.5 million over the cap if they need to.

[taxbuster]

Yep - that's what I was getting at - sorry, bad wording.

[Finger Cookin]

So Cap Friendly has the Flames with $539,933 in space after Gaudreau's deal, with a 23 man roster. Paper transactions to demote Vey and recall someone like Jankowski or Morrison spends another $225,000 in space. So the opening roster should come in ~$315K under the cap. Meaning Smid's movement to LTIR will allow the Flames to exceed the cap by ~ $3.18M.

[sureLoss]

Or they just demote Vey and start the season with $1.2 mil cap space and 13 forwards. They don't really need to start the season with 23 man roster.

$1.2 mil in cap space if it stays unused through the season would be $4.8 million in salary the Flames could take on at the trade deadline.

[Finger Cookin]

Using getbak's roster, but adding Gaudreau:

Giordano, Mark		$6,750,000.00
Gaudreau, Johnny        $6,750,000.00
Monahan, Sean		$6,375,000.00
Hamilton, Dougie	$5,750,000.00
Wideman, Dennis		$5,250,000.00
Brodie, TJ		$4,650,400.00
Brouwer, Troy		$4,500,000.00
Frolik, Michael		$4,300,000.00
Backlund, Mikael	$3,575,000.00
Smid, Ladislav		$3,500,000.00
Stajan, Matt		$3,125,000.00
Engelland, Deryk	$2,916,667.00
Elliott, Brian		$2,500,000.00
Bouma, Lance		$2,200,000.00
Johnson, Chad		$1,700,000.00
Bollig, Brandon		$1,250,000.00
Tkachuk, Matthew	$925,000.00
Bennett, Sam		$925,000.00
Jokipakka, Jyrki	$900,000.00
Ferland, Micheal	$825,000.00
Chiasson, Alex		$800,000.00
Vey, Linden		$700,000.00
Kulak, Brett		$656,667.00
Hamilton, Freddie	$612,500.00
	
Raymond, Mason (Buyout)	$1,050,000.00
	
Bonus Carryover?	$630,500.00
	
TOTAL:			$73,116,734.00

So only $116,734 over. Assigning Kulak and recalling Wotherspoon on paper saves $31,667. Leaving another $85,067 to be cut. Might see something weird like Bennett assigned on paper and a cheaper forward like Pollock or Mangiapane recalled on paper to get as close to the cap as possible.

[Finger Cookin]

Updating the totals factoring in the Versteeg and Grossman signings, and the Vey assignment, the Flames have a 24 man roster at ~$73,941,734. Looks like a Bollig assignment is going to be needed to get the Flames (barely) under. That would leave a 23 man roster at $72,991,734.

2 G, 8 D (including Kulak and Grossman, not including Smid as a player count but including his cap hit), and then 13 F (including Versteeg).