Everyone knows Chris Pronger is never going to play again, so the Flyers have been, and will continue to rely on LTIR to get the cap relief they need to replace him. However, many fans mistakenly think LTIR just makes the cap hit disappear; or at worst, that it allows the team to exceed the ceiling, for effectively the same result.
That’s not the case. When it comes down to it LTIR is bad. It has negative ramifications and if you don’t have to use it, you shouldn’t.
For the sake of keeping this piece short and sweet, I’ll keep the discussion at a really high level. The salary cap is calculated on a daily basis, not a yearly basis. It’s almost as if, every day the Flyers are given a chunk of money to use to pay their players for that day. If they don’t use it all, they can pocket the difference, and use it later.
The simplest example of this is to think about it from a yearly cap space perspective. If you have $1 million in cap space. Once you are 50% of the way through the season, you can acquire a $2 million player. You can afford their $2 million daily cap hit because you only have to pay it for 50% of the season, and you’ve been saving up a little bit of a time for that first half of the season.
The Flyers however, do use all of that daily money. In fact, they use even more. LTIR allows them to spend even more than that daily allowed sum. The difference with LTIR though, is that if a team doesn’t use all of their possible LTIR, they don’t get to pocket the difference.
The end result is that a team will never be able to have buying power exceeding the cap hit of the player(s) on LTIR. Whereas a team that is truly under the salary cap can get more for their money later in the season.
Capgeek has a great chart that shows every team’s cap space both today and at the trade deadline. Notice the theme here for the five teams that are relying on LTIR?
Each of those team’s “today” space is identical to their “deadline space”. Again, that’s because with LTIR it is “use it or lose it”. They will never be able to pocket daily savings, and use it at a later date.
Now let’s look at a couple of team’s that are truly under the salary cap ceiling.
A team like St. Louis has a very mild amount of salary cap space; only just over a million dollars. However, $1 million dollars effectively becomes over $5 million dollars at the trade deadline. So St. Louis can go out and acquire a really good player at the trade deadline if they want…all because they have $1 million in cap space today.
Calgary I just added because it’s amusing. They have the most cap space in the league at almost $15 million. At the deadline, they could add an absurd $71 million in contracts and still be cap compliant.
LTIR isn’t a death sentence by any means. The reality is it’s a necessary evil for some teams; especially teams like the Flyers or Bruins who have super long term injuries to expensive players. However, it is important to understand how using that LTIR affects the team. The end result is that it does hamper them.
