Quoting: TanSor
Should have said up to 80%. But either way, I still don't understand how that increases your cap space
It provides some relief to go above cap ceiling. Since MIN is just under cap now, if they added Weber, they would need $5.5 million that would come in LTIR relief. But they would be adding $7.8m cap hit, so it would give them less room to maneuver.
A few things I see going on here:
1. There is an off-season benefit (but things have to line up perfectly). Say you are at $81m with $82m cap and need Fiala to resign. And say he wants $10m a year. Off-season rules would allow you add 110% of cap ceiling onto roster ($90.2m). So the most you could sign Fiala for would be $9.2m (90.2 - 81 = 9.2). But if you add LTIRetired player at $8m a year, you be at $89m with $90m ceiling and off-season limit of $99m. So then you could sign Fiala at $10m a year (99 - 89 = 10). This was the Marner / Clarkson example a few years ago. But there are few instances where this actually helps.
2. There could be cash-flow reasons that could be beneficial if they are moving other cap out. And I think some a confusing these "savings" with a reduction in buyout penalties. They are not related and there is no way to pay down one with the other.
3. Insurance is completely unrelated. And each policy is taken out by teams as they see fit. Some policies are transferable, some are not. Considering the size of Weber's contract and his age, I am sure that the Habs had a policy on him. And we have no idea if that policy is transferable. If its not, a new team would not be able to get insurance on him now. But this is all cash flow conversation for the team and completed unrelated to salary cap.