The NHL LTIR Explained

What is the LTIR?

To say that the NHL’s long-term injured reserve (LTIR) is a complicated system would be an understatement. In fact, I’d say that it’s the most complicated system in the league has. Thankfully, you don’t need to know a ton about it most of the time. However, this past week has brought up a scenario where you needed to know some of the ins and outs of it. Given the amount of misinformation I saw being spread around, including by league insiders, I thought I’d break every rule of it down in simple terms here. I’ll also break down how it affects every team who will be using it this season!

Before I begin, I’d like to say a huge thank you to the people over at CapFriendly! They created the guide that helped me understand it (which you can find here) and that this article is based on!

The Oversimplified Version of The NHL LTIR

I figured I’d start with an incredibly oversimplified summary of the LTIR. Basically, it is a system that allows teams to take players who will miss at least 10 NHL games and 24 days due to injury (this includes players who retire due to injury) and put them on it. Once this is done, the team will be allowed to exceed the NHL’s salary cap by the amount of the player’s contract, minus any cap space they had the day they placed them on the LTIR. 

However, if/when that player returns, the team must clear any cap space they gained over and above the salary cap in order to be cap compliant. The player will not be able to be activated until this is done. But, they also can’t stay on the LTIR once they are medically cleared. So, teams must be extremely careful when exceeding the cap if the player is expected to return that season.

Also, to dispel a very popular take on this, one that I saw far too much this past Sunday, the LTIR can be used in the offseason. On top of that, there really isn’t much different about it. If anything the difference, which I will explain later, is helpful. 

Everything You Want To Know About The LTIR

Now, we’re on to the fun part: the complicated details! Yay! Without further ado, let’s dig in.

Accruable Cap Space Limit

The Accruable Cap Space Limit, otherwise known as the ACSL, is a team’s new upper limit once they begin using the LTIR. It excludes the LTIR relief pools. This number is used to determine the amount a team can exceed the salary cap using the LTIR. The closer to the cap a team is before using the LTIR, the more relief they’ll get. So, you typically see one day or otherwise short-term call-ups when teams are about to start using the LTIR. This allows them to be close to, or possibly even at, the cap when the ACSL is calculated. This means they’ll get more relief from it. 

The ACSL during the offseason is calculated using 110% of the current salary cap. This is because every team gets to go 10% above the salary cap during the offseason. So, this is reflected in the ACSL. That means that for this season, the salary cap number used to calculate the ACSL during the offseason would be $89.65 million ($81,500,000*110%=$89,650,000). However, the ACSL gets recalculated using the normal salary cap on the opening day of the season for any team that used the LTIR during the off-season. So, this season that would be $81.5 million.

Lastly, the ACSL is not recalculated if another player ends up being put on the LTIR after the first player (as long as the first player is still on it). The LTIR relief pools simply increase by the amount of that player’s contract. There are two different equations used to calculate the ACSL depending on when a player is put on it. I’ll break them all down here.

The Basic Equation

The Basic Equation can be used to calculate the ACSL during the NHL regular season as well as the offseason. It is as follows: ACSL= Salary cap upper limit- team cap space. So, to provide an example of how this would look, let’s say that a team has $1.5 million in cap space, and are about to place a player on the LTIR that has a $5 million contract. Given that the salary cap is $81.5 million, this would mean their ACSL is $80 million (ACSL=81.5-1.5=80). Once the team hits the $80 million mark, they will have an additional $5 million in LTIR relief. So, they can spend up to $85 million while that player is on the LTIR.

The Training Camp Equation

The other method of calculating the ACSL is the Training Camp Equation. This one is less ideal for teams because it tends to make it so they get less LTIR relief. However, it is the most commonly used on, as it gets used to recalculate the ACSL on opening day if a team was using the LTIR in the offseason, as well as if a team activates the LTIR during training camp in order to be cap compliant on the opening day of the season. This equation is as follows: ACSL= Team cap hit- LTIR player’s cap hit.

So, to provide an example, let’s say that a team has a cap hit of $83 million. The player they are about to put on the LTIR has a cap hit of $4 million. According to the equation, this puts their ACSL at $79 million (ACSL=83-4=79). So, once the team is using over the $79 million ACSL, they will have an additional $4 million in salary relief from the LTIR. One thing to take note of is that whenever a team uses the Training Camp Equation, they will already be using their full salary relief. So, in order to accrue any cap space, they have to shed salary to be below the ACSL. That’s why this equation is less ideal than the Basic Equation.

LTIR Relief Comes in Two Pools

Another detail of the LTIR is that the amount of relief a team gets comes in two pools: a salary relief pool, and a performance bonus relief pool. The salary relief pool is calculated by just taking the player’s cap hit (which is equal to their average salary, excluding performance bonuses). The performance bonus relief pool is equal to the amount of money in performance bonuses a player has, if he has any. The performance bonus relief pool is calculated using any performance bonus in the player’s contract, regardless of whether or not they can still achieve it. 

Once the ACSL is calculated and the LTIR is being used, if the team recalls a player, they must have enough relief to cover both their salary and any potential performance bonuses they could get this season. But, these performance bonuses can come out of either the performance bonus relief pool, or the salary relief pool. So, it is not an issue if the player on the LTIR had no performance bonuses, but the recalled player does. For once, the LTIR took the easy way out in a situation.

LTIR in the Offseason

As I said earlier, the LTIR can be used in the offseason. On top of that, it does not result in the team getting less relief. The only difference between using the LTIR during the offseason and the regular season is during the offseason, teams also get the extra 10% cushion that every team is allowed to exceed the cap by until the first day of the season. On the first day of the season, the team’s ACSL and LTIR relief pools are recalculated minus the 10% offseason cushion. So, it’s really no different. Now, to make sure it’s really sunk in, say it with me: the LTIR can be used in the offseason, and it does not result in the team getting less relief overall.

What Does This Mean For Recent Examples?

Now that I’ve gone through every detail that I can think of that you would ever need to know about the LTIR, I thought I’d break down exactly what this means for the three most recent scenarios that have come up: the New York Islanders, the Tampa Bay Lightning, and the St. Louis Blues.

New York Islanders

Earlier this offseason, Johnny Boychuk announced his retirement due to an eye injury. Because of this, the Islanders will be using the LTIR this season. It is unclear right now as to whether or not Boychuk is already on the LTIR. But, I think it’s safe to assume he isn’t, because the Islanders are already $4 million under the cap. So, they would only get an extra $2 million in relief all season if he was. But, look for Boychuk to be placed on the LTIR once Mat Barzal is re-signed. When this happens, the Islanders will be able to get Boychuk’s full salary in LTIR relief. This is because they will be at (and in fact they’ll be above) the salary cap.

The most helpful scenario for the Islanders is for Barzal from a salary cap standpoint is actually if he signs during the regular season. If that’s the case, the Basic Equation to calculate the ACSL. It ould make so the Islanders have a little more relief to spend as they please, since Barzal will take up most, but probably not all, of the Isles available cap space and Boychuk’s $6 million salary. However, while ideal for the salary cap, it is far from ideal from a play standpoint. So, it is highly unlikely this is done intentionally.

Calculations

Now, let’s use the actual equation for each of these scenarios. All of these scenarios use the $81.5 million salary cap. This is because it’s the only one that will matter come the regular season.

• The Islanders place Boychuk on the LTIR before Barzal signs, and don’t call anyone up (Basic Equation): ACSL=$81,500,000-$3,905,833=$77,594,167. Boychuk’s salary=$6 million. $77,594,167+$6,000,000=$83,594,167. The Islanders would be able to spend up to $83,594,167 for this season.
• Barzal signs before* or during training camp, then Boychuk is placed on the LTIR (Training Camp Equation): ACSL=Total cap hit with Barzal’s contract-$6,000,000=?. This equation is unable to be fully calculated right now as we do not know how much the Islanders will give Barzal (although it is likely in the $8-$9 million range, at least).
• The final scenario sees Barzal signing during the regular season, and then Boychuk is placed on the LTIR. The Basic Equation would be used here. However, it is practically a guarantee that the Islanders would call players up to get as close to the salary cap as possible before signing Barzal and activating the LTIR. So, we know none of the numbers that would be used in this equation right now. Therefore, I decided not to write out the equation. But, the ACSL would most likely be very close to $81.5 million, meaning the Islanders would be able to spend close to $87.5 million. This is the most ideal situation would them cap-wise, but not play-wise as I explained above.

*Technically, if he signs before training camp and the LTIR is activated, the ACSL would be calculated using an $89.65 million salary cap. However, since the ACSL would be recalculated using the $81.5 million salary cap on the opening day of the season, I decided to omit that part as it really doesn’t matter.

Tampa Bay Lightning

Next up for teams that will be using the LTIR this season, we have the Tampa Bay Lightning. The Lightning will have star forward Nikita Kucherov on the LTIR this season. He will miss the full regular season due to a hip injury (although he may be back for playoffs). They will also have Marian Gaborik and Anders Nilsson on the LTIR after the trade they made with the Ottawa Senators. Kucherov has a $9.5 million salary, while Gaborik has a $4.875 million salary, and Nilsson has a salary of $2.6 million. So, all together, they have a $16.975 million cap hit. The Lightning are already using the LTIR. So, their total relief is very easy to calculate. 

Calculations

The only equation that will matter for the regular season is the Training Camp Equation. So, that’s the only one I’m going to do out. Here it is:

• ACSL=$97,316,666-$16,975,000=$80,341,666. The Lightning will be able to spend up to $97,316,666 this season. They are currently spending all of that. So, they will not be able to add any more money unless they move a current roster player.

St. Louis Blues

Last but not least, we have the St. Louis Blues. This situation is actually what caused me to finally write this article. This was where the misinformation was getting spread around after they signed Mike Hoffman to a professional tryout (PTO). Many speculated that this was for salary cap reasons. The most common explanation I saw for this was that signing him to a contract before the season began would allow them to maximize their cap space. However, this is not true. The Blues will already have to use the Training Camp Equation since they are currently over the cap by more than they can realistically shed before the opening day of the season. This means that no matter what, they will be using their full LTIR relief to begin the season.

So, Hoffman was signed for reasons other than the salary cap. My guess is to make sure he fits in with the team. It is well known that he has had some serious off-ice issues in the past. But, obviously, I don’t know that for sure. No matter what though, it is definitely not a salary cap issue.

Calculations

As I said above, since the Blues are above the salary cap by more than they can realistically move, they will have to activate the LTIR before the opening day of the season. Therefore, they will have to use the Training Camp Equation. Both Vladimir Tarasenko and Oskar Steen will be on the LTIR for the Blues to begin this season. Tarasenko’s contract is worth $7.5 million, while Steen’s is $5.75 million. So, they have a combined $13.25 million. For those who want to see the calculation done out, here it is: 

ACSL=Total cap hit with Hoffman-$13,250,000=?. We cannot fully calculate the amount the Blues will be able to spend this season right now since we do not know what Hoffman’s contract will look like (although it is rumored to be in the $3.5-$4.5 million range). However, regardless of what it works out to be, the Blues will have to use their full LTIR relief pools since they will be using the Training Camp equation. Thus, they will not be able to add any more players unless they move one currently on the roster.

Final Thoughts

If you stuck with me throughout this insanely long (around 2600 words to be exact) article and you don’t have a headache, thank you. I also give you a ton of credit because I had a headache trying to figure it out. But anyway, while the LTIR is incredibly complicated, it can be broken down a lot. I hope this guide helped you understand it. If you have any questions, feel free to leave a comment or reach out to me on Twitter! I’ll do my best to answer it. Also, another HUGE thank you to CapFriendly for making their FAQ! It was the basis of the beginning of this article and made me understand it!

-Lydia Murray (@lydia_murray12)

Featured image courtesy of NHL.com.