How much salary cap room do the Flyers have, exactly?

By now most Flyers fans are at least moderately aware of the Flyers’ salary cap situation. Sites like Capgeek make it exceedingly easy to see that the Flyers have an estimated $4.558 million in cap space on a projected $71.1 million salary cap.

The salary cap is calculated slightly differently during the offseason than it is during the regular season. For one, teams are temporarily allowed to exceed the upper-limit by 10% during the offseason for the sake of maneuverability. With an estimated salary cap of $71.1 million, that means the temporary threshold for this offseason would be $78.21 million.

So what counts towards this $78.21 million?

From section 50.5(d)(i)(A) of the CBA:

From July 1 until and including the last day of Training Camp of each League Year, “Averaged Club Salary” for each Club for that League Year shall be calculated as the sum of the Player Salary and Bonuses for that League Year for each and every Player, from the following categories:

It’s important to note that it says “for each and every player”. That means players that don’t figure to be on the active roster will still count against the salary cap in the offseason. That must be accounted for because it obviously affects how the active the Flyers can or cannot be during the offseason. Chris Pronger is the obvious example. By now almost everyone knows he will count against the cap. The Flyers won’t be able to place him on long-term injured reserve (LTIR) until the start of the season. There are, however, a lot more players that most people probably just omit when considering the Flyers’ cap space. If you want to paint yourself an accurate picture of the Flyers’ offseason cap situation, you’ll want to consider that.

A later paragraph then denotes that after training camp, only the players on the active roster (or injured players) would count.

(B) From the day following the last day of Training Camp until and including June 30 of each League Year, “Averaged Club Salary” for each Club shall be calculated as the sum of the following amounts:

(1) The Averaged Amount of the Player Salary and Bonuses for that League Year for each Player on the Club’s Active Roster, Injured Reserve, Injured Non Roster and Non Roster;

The section specifies the following categories as counting against the cap in the summer (I’m summarizing to save you some reading):

1. each player under a one-way contract
2. all deferred salary and bonuses
3. all ordinary course buyout amounts
4. any amount offered in a Qualifying Offer for Restricted Free Agents (proportionate to time spent in NHL)
5. each player under a two-way contract (proportionate to time spent in NHL)
6. any salary retained in a retained-salary transaction
7. any cap-advantage recapture penalties
8. any amount paid in a salary or bonus dispute

Right off the bat we can eliminate number two as I have not seen or heard anything that indicates the Flyers will have any bonus overages heading into 2014-2015. (Side note: this is something that will probably occur in 2015-2016 as Kimmo Timonen’s new contract will likely result in bonuses he will achieve, and chances are that some or all of those bonuses will not fit under this year’s upper limit.)

We can also eliminate number three as the Flyers no longer have any ordinary course buyout penalties. Previously, the Flyers had some penalties for buying out Oskars Bartulis.

Numbers six, seven, and eight can also be jettisoned. The Flyers did retain salary when they traded Andrej Meszaros, but his contract expires on July 1, so there is no longer salary being retained. The Flyers (and every other team in the NHL other than the Devils, for that matter) do not have any cap-advantage recapture penalties. Lastly, there are no salary or bonus disputes to consider.

That leaves the following:

1. each player under a one-way contract
2. all deferred salary and bonuses
3. all ordinary course buyout amounts
4. any amount offered in a Qualifying Offer for Restricted Free Agents (proportionate to time spent in NHL)
5. each player under a two-way contract (proportionate to time spent in NHL)
6. any salary retained in a retained-salary transaction
7. any cap-advantage recapture penalties
8. any amount paid in a salary or bonus dispute

Players under a one-way contract

Players under a two-way contract

Things start to get a little tricky with number four and five. I’ll explain number five first, players under two-way contracts, as it has one less layer of complication.

From 50.5(d)(i)(A)(5) of the CBA:

For any Player under a Two-Way SPC, the NHL portion of the SPC will be counted at a rate reflective of the Player’s time on an NHL Roster (including days on Injured Reserve, Injured Non Roster and Non Roster status) the prior League Year

Scott Laughton is actually the only player that applies this year, so we’ll use him to illustrate this. Laughton is signed for the 2014-2015 season on a two-way contract. His cap hit (excluding bonuses) is $863k, however, he did not spend the entire season with the Flyers. In fact, Laughton didn’t play a single game with the Flyers in 2013-2014, but he did spend two days on the NHL roster before he was sent down.

Therefore, when calculating his impact towards the 2014-2015 cap in the offseason, we only account for the time he did spend in the NHL. Laughton spent two days out of the 195 in a full season in the NHL. Therefore, we take his $863k cap hit and multiply it by (2/195) to get a measly $8,854. Just to be clear that is eight thousand not eight million. That is the number that is factored into the offseason salary cap. (Full disclosure, I’m not certain if I should use his $863k cap hit or the $1.106 hit including bonuses for this calculation; but the difference is negligible.)

Other players, like Kris Newbury, Tye McGinn, Jason Akeson and others spent time on the NHL roster however they are all impending free-agents so this does not apply. We’ll cover what to do with restricted free-agents and qualifying offers next.

Still others, like Nick Cousins and the many other prospects that are under two-way contracts don’t count because none of them spent a single day in the NHL in 2013-2014. Cousins’ cap hit multiplied by zero (for zero days in the NHL) just comes out to zero.

So in this case, Scott Laughton is our only player under the “two-way contract” category.

Any amount offered in Qualifying Offers

This one is similar to the two-way contracts in that it is proportionate to time spent in the NHL, but there’s an additional wrinkle.

The Flyers have 11 restricted free-agents: Brayden Schenn, Jason Akeson, Tye McGinn, Erik Gustafsson, Cal Heeter, Kyle Flanagan, Tyler Brown, Brandon Manning, Marc-Andre Bourdon, Cullen Eddy, and Tyler Hostetter.

In order to retain the rights of their restricted free agents the Flyers must make a Qualifying Offer to the player. The amount of that qualifying offer can vary.

The first step, of course, is to figure out which of these free-agents will actually be given a qualifying offer. I would think it’s a safe bet to assume that Schenn, Akeson, McGinn, Heeter, and Manning will get them. Also, while Gustafsson has signed in the KHL, I would expect the Flyers to make him a qualifying offer as well, to retain his rights. Flanagan and Bourdon are probably toss-ups; and I would think Brown, Eddy, and Hostetter are unlikely.

For the sake of being conservative in this exercise, we’ll proceed with just Schenn, Akeson, McGinn, Gustafsson, Heeter, and Manning.

From section 10.2(a)(ii):

(A) if the Player’s prior year’s Paragraph 1 NHL Salary is less than or equal to $660,000 for that League Year, 110% of the prior year’s Paragraph 1 NHL Salary.

(B) if the Player’s prior year’s Paragraph 1 NHL Salary is greater than $660,000, but less than $1,000,000 for that League Year, 105% of his prior year’s Paragraph 1 NHL Salary, but in no event to exceed $1,000,000.

(C) if the Player’s prior year’s Paragraph 1 NHL Salary is equal to or greater than $1,000,000 for that League year, 100% of the prior year’s Paragraph 1 NHL Salary.

So if we use Tye McGinn as an example, his NHL salary last year was $775k. Because of that, his qualifying offer would fall under the 105% category, which would then increase that salary to $813k.

However, McGinn only spent 44 days on an NHL roster. $813k X (44 days/195 days) comes to $183k. McGinn should count for about $183k against the cap this summer.

Now of course, these numbers become invalid if and when these players sign new contracts (be it with the Flyers or another team)

The totals

So if we add it all up, the Flyers offseason cap-space is as follows.

1. each player under a one-way contract = $66.541 million
2. all deferred salary and bonuses
3. all ordinary course buyout amounts
4. any amount offered in a Qualifying Offer for Restricted Free Agents (proportionate to time spent in NHL) = $2.111 million
5. each player under a two-way contract (proportionate to time spent in NHL) = $8,855
6. any salary retained in a retained-salary transaction
7. any cap-advantage recapture penalties
8. any amount paid in a salary or bonus dispute

Our conservative total comes to $68,662,099. Remember, the Flyers could offer more qualifying offers, and Laughton’s number could be based on his bonus number which would bump it a couple thousand; but this seems like a safe total for the time being.

With the 10% overage threshold of $78.21 million that means the Flyers have about $9.548 million of room to play with during the offseason before they can account for Pronger on LTIR, demote players, and ultimately become cap compliant. The Flyers may even be required to count the additional $2 million in bonuses for Timonen at this time, which would further reduce that $9.548 million to $7.548 million. I have to admit, I don’t know for sure, but I’m inclined to think that is likely.

With Timonen signing such a team friendly deal, the Flyers aren’t in terrible shape; but of course they are tight to the cap as always. Hell, with my current numbers the Flyers currently sit below the actual estimated upper limit by $2.438 million. That’s before the eventual moves that will come to trim the roster.

Now when you’re dreaming up your grandiose offseason trades and signings you’ll have a better idea of exactly how much room the Flyers have to play with this summer before they have to get themselves under the upper limit.

Update (6/29/2014):

Since originally publishing this article a few pieces of information have come out that change things a bit. I thought it would be beneficial to add an update prior to the start of Free Agency on July 1.

• The Flyers traded Scott Hartnell for RJ Umberger
• Brayden Schenn signed a two-year extension
• It was revealed that the Flyers actually do have $345,000 in bonus overages from last season
• The upper limit of the salary cap was set to $69 million. Which leaves a summer overage of 10% at $75.9 million.
• Ron Hextall indicated the Flyers will submit qualifying offers to Jason Akeson and Tye McGinn, but that he’s unsure about Cal Heeter. That differs greatly from my initial speculation. For the sake of this recalculation, we’ll only use Akeson and McGinn./

1. each player under a one-way contract = $68.991 million
2. all deferred salary and bonuses = $345,000
3. all ordinary course buyout amounts
4. any amount offered in a Qualifying Offer for Restricted Free Agents (proportionate to time spent in NHL) = $191,585
5. each player under a two-way contract (proportionate to time spent in NHL) = $8,855
6. any salary retained in a retained-salary transaction
7. any cap-advantage recapture penalties
8. any amount paid in a salary or bonus dispute

That leaves the Flyers at $69.536 million on the salary cap. That obviously has them over the newly set upper limit by $536k. It also means they have $6.364 remaining in their 10% overage cushion for the summer.

Just another reminder that that $536k over the cap includes every number indicated above. It will change as that includes 22 players: 14 forwards, 7 defenseman (one being Pronger), and 1 goaltender. But the point of this exercise is to understand the Flyers’ cap situation during the offseason…not what it will be once the season starts. Now let’s see what Hextall does with it on July 1.