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What is LTIR?

When a player has an injury of which they are expected to miss a minimum of 10 NHL games and 24 days in the NHL season, the team can place them on long term injured reserve (LTIR). LTIR can be used to exceed the salary cap. LTIR is a very complicated aspect of the NHL operations and the vast majority of details are not specified in the CBA.

When a player is placed on LTIR, their cap hit remains on the teams cap payroll and it continues to count as it always did. It also does not provide the club with additional cap-space savings that can be banked for future use while the team operates above the salary cap. Instead, LTIR provides relief if the club's averaged club salary, or payroll, begins to exceed the upper limit. The amount of relief that the club receives is calculated on the day the player is placed on LTIR. There are three equations that are used to determine the LTIR relief, the first, the basic equation, can be used during the season and during the off-season. The second, the training-camp equation, can be used on the final day of the off-season in preparation for the first day of the season. The third formula is used when the team already has a player on LTIR.

When a player is deemed fit to play, the team must activate them.

What is the Accruable Cap Space Limit (ACSL)?

When a team goes into LTIR, their effective salary cap, or upper limit, is changed. This adjusted upper limit is calculated as a function of the teams cap space and the player’s cap hit. This value is the “accruable cap space limit” (ACSL), and is the first value calculated. Second are the salary and performance bonus relief pools that are later explained below.

The accruable cap space limit is the teams new upper limit excluding their LTIR relief pools. If the team operates below the ACSL, they begin to accrue cap space. A team can operate up to the ACSL without using their LTIR relief pools, once they operate above the ACSL, they begin to use their LTIR relief pools. In the majority of cases, a team using LTIR will be using their relief pools. Only in uncommon circumstances does a team operate below their ACSL.

The ACSL is only calculated when a team first enters LTIR, if a player is placed on LTIR while another player is already on LTIR, the ACSL is not recalculated. In the event that a team stops using LTIR, their ACSL resets to the default upper limit of the active season, upon reentering LTIR, the ACSL is again recalculated.

Two methods can be used to calculate the ACSL:

  1. The Basic Equation

    The basic equation can be used throughout the NHL regular season, and during the off-season:

    ACSL = Salary cap upper limit - team cap space

    Example: The 2017-18 upper limit is $75M, a team with a projected cap hit of $74.9M places a player with an AAV of $5M on LTIR:
    Upper limit = $75M
    Team cap space = $0.1M
    ACSL = $75M - $0.1M = $74.9M
    If the team decides that they do not need to recall a player, and instead reassign a player to the AHL, they would begin to accrue cap space because they are operating below the ACSL.


  2. The Training-Camp Equation
    The training camp equation can be used on the last day of training camp in preparation for the first day of the season:
    ACSL = Team cap hit - LTIR player’s cap hit

    Example: The 2017-18 upper limit is $75M, on the last day of the off-season a team has a projected cap hit of $78M and places a player with an AAV of $3.5M on LTIR:
    Team cap hit = $78M
    Player’s cap hit = $3.5M
    ACSL = $78M - $3.5M = $74.5M
    To accrue cap space while the team continues to use LTIR, they would need to trade players to get below a projected cap hit value of $74.5M.

The ACSL will always be less than or (in the optimal scenario) equal to the league upper limit. The closer the ACSL is to the league upper limit, the greater the team will be able to exceed the upper limit.

How is LTIR Relief calculated?

LTIR relief comes in the form of two values: a salary relief pool, and a performance bonus relief pool.

These pools are determined the day the player is placed on LTIR. The salary relief pool is the player’s averaged salary excluding performance bonuses (their cap hit value). The performance bonus relief is the player’s total performance bonuses for this season (games played, A and B bonuses), regardless of if they are still achievable.

What if the team already has a player on LTIR?
The teams ACSL remains the same, and their salary relief pool increases by the player’s cap hit, and the performance bonus relief pool increases by the player’s performance bonuses.

How does a team use the base salary and performance bonus relief pools?

As explained above, two pools are created when a player is placed on LTIR, a salary pool, and a performance bonus pool. If recalling a player would result in the team exceeding the ACSL, the team must have enough relief in the necessary pools. Only the players achievable performance bonuses are considered when they are recalled, for example, if a player has an 82 games played performance bonus of $500,000, and it is impossible for them to achieve those 82 games, the $500,000 performance bonus is no longer considered.

The following must be met to recall the player:

  1. Players with no performance bonuses
    If a player has no performance bonuses, the team must have a salary relief pool that is equal to or greater than the player’s cap hit (annual averaged salary excluding performance bonuses).

  2. Players with performance bonuses
    The team must have a salary relief pool that is equal to or greater than the player’s cap hit. After the salary relief pool has been considered, the sum of the teams performance bonus pool and remaining salary relief pool must be equal to or greater than the player’s max achievable performance bonuses of the current season (the player’s achievable performance bonuses can come out of both the salary and performance bonus pool).

How much can teams exceed the league upper limit by?

Once the team exceeds their ACSL, they start to use their relief pools. They can exceed the upper limit until they have exhausted the necessary relief pools. A rough estimation is as follows:
Exceed value = ACSL + salary relief pool - league upper limit
*It is notable that this estimation does not take into account the performance bonus pool: if the team were to recall a player with performance bonuses and did not have a suitable amount of space in their performance bonus relief pool, they would have to use their salary relief pool to make up the difference. An example is presented below.

Can LTIR be used in the off-season?

Yes, LTIR can be used in the off-season while the 10% off-season cushion is active. LTIR in the off-season is calculated using the basic equation outlined above, which permits a team to exceed the off-season salary cap. To use off-season LTIR the team must provide doctors proof that the player in question will continue to be injured at the beginning of the regular season for 10 NHL games and 24 calendar days.

At the start of the season the teams LTIR relief & ACSL is recalculated when the 10% cushion is removed.

Basic Equation Example

The league upper limit is $69M. A team has an averaged club salary of $68M and a player with a 35+ contract with an AAV of $5M ($3M cap hit and $2M in performance bonuses) becomes injured and the team places him on LTIR. The LTIR relief pools are calculated as follows:
  1. AAV of LTIR player is $5M
  2. Cap space = $69M - $68M = $1M
  3. ACSL = $69M - $1M = $68M
  4. LTIR relief:
    1. Base salary relief pool: $3M
    2. Performance bonus pool: $2M
Once the team operates above $68M, they have $3M in salary relief, and $2M in performance bonus relief pools.

To add to this example, if the team were to recall a player from the AHL with a cap hit of $950k, the ACSL would be maximized, allowing the team to further exceed the league upper limit:
  1. AAV of LTIR player is $5M
  2. Cap space = $69M - $68.95M = $0.05M
  3. ACSL = $69M - $0.05M = $68.95M
  4. LTIR relief: $3M
    1. Base salary relief pool: $3M
    2. Performance bonus pool: $2M
For this reason, when a player is activated onto LTIR, one day recalls are relatively common as they can be used to maximize the ACSL.

Training-Camp Equation Example

The league upper limit is $69M. A team has an averaged club salary of $71M and a player with a cap hit of $5M ($5M cap hit, $0 in performance bonuses) becomes injured and the team places him on LTIR. The LTIR relief pools are calculated as follows:
  1. Team cap hit = $71M
  2. ACSL = $71M - $5M = $66M
  3. LTIR relief:
    1. Base salary relief pool: $5M
    2. Performance bonus pool: $0
Once the team operates above $66M, they have $5M in salary relief, and $0 in performance bonus relief pools. When using the training camp formula, 100% of the relief pools are used when the player is initially placed on LTIR.

LTIR Operations Example

The league upper limit is $75M. A team has an averaged club salary of $74M and a player with a cap hit of $5M ($5M cap hit, $0 in performance bonuses) becomes injured and the team places him on LTIR:

ACSL = $75,000,000 - $1,000,000 = $74,000,000

Event: Initial $5M player goes onto LTIR
P.BONUS RECALLEDSALARY RECALLEDP.BONUS POOLSALARY POOL
INITIAL$0$0$0$0
CHANGE---+$5,000,000
RESULT$0$0$0$5,000,000


Event: Player recalled ($925,000 cap hit, $0 performance bonuses)
P.BONUS RECALLEDSALARY RECALLEDP.BONUS POOLSALARY POOL
INITIAL$0$0$0$5,000,000
CHANGE-+$925,000--$925,000
RESULT$0$925,000$0$4,075,000


Event: Player recalled ($650,000 cap hit, $65,000 performance bonuses)
P.BONUS RECALLEDSALARY RECALLEDP.BONUS POOLSALARY POOL
INITIAL$0$925,000$0$4,075,000
CHANGE+$65,000+$650,000-
-$650,000
-$65,000
RESULT$65,000$1,575,000$0$3,360,000


Event: Player reassigned ($925,000 cap hit, $92,500 performance bonuses)
P.BONUS RECALLEDSALARY RECALLEDP.BONUS POOLSALARY POOL
INITIAL$65,000$1,575,000$0$3,360,000
CHANGE-$92,500-$925,000
+$92,500
-$65,000
+$925,000
+$65,000
RESULT-$27,500$650,000$27,500$4,350,000


Event: Player is placed on LTIR ($2,000,000 cap hit, $1,000,000 performance bonuses)
P.BONUS RECALLEDSALARY RECALLEDP.BONUS POOLSALARY POOL
INITIAL-$27,500$650,000$27,500$4,350,000
CHANGE--
+$1,000,000
+$2,000,000
RESULT-$27,500$650,000$1,027,500$6,350,000