The Maple Leafs signed Roman Polak on Sunday, brought him onto the roster on Monday, and removed Calle Rosen.  The net result on the space available to use for future roster moves or signings was a small increase.  Rosen, on an ELC, has a cap hit of $925,000 while Polak was signed for $1.1 million.

That doesn’t seem to add up, does it?

It does when you use the right math.  It’s not a big deal, but why not clear up the confusion and get a chance to look at how LTIR transactions actually work with a real example.

In case that seems boring, have this goal video instead:

Before Polak was signed, the Leafs had $4,550,000 in salary pool from LTIR to use.  We might casually call that cap space, but it’s not.  It is a measure of how much of the original total of LTIR salary pool is left. The Leafs began the year over the cap, and have been using LTIR from the beginning.

Maple Leafs have made roster decisions because of LTIR and bonus rules

A team’s cap hit is mostly made up of the salaries for players on the active roster, which is usually the 23 players plus anyone hanging around on IR. There’s other amounts for buried salaries, buyouts and last year’s bonuses as well. Given that, by adding Polak and subtracting the cheaper Rosen, we might expect the net result to make the cap situation tighter.

Instead the salary pool available has gone up to $5,450,000.

The reason is bonuses.  Because the Leafs were over the cap and using LTIR when they added Rosen, they had to consider his salary as using up that salary pool shown on the right in the chart above, and his bonuses as using up the performance bonus pool as shown in the middle column.

The Leafs’ performance bonus pool starts at zero because no one on LTIR had bonuses in their contracts.  That’s what fills the pool to begin with.  So when they added Rosen he cost an extra $850,000 in salary pool.  When the bonus pool is dry, it siphons from the salary pool.  So Rosen used $1,775,000 in total of the salary pool.

Polak uses less overall because he has no bonuses.  But I believe it’s not $1.1 million either, it’s a prorated amount based on his full cap hit because he was a free agent added after the season started.

Okay, and now I’ll tell you that I don’t get how Cap Friendly went from $5,150,000 in salary pool used with Rosen on the roster (as shown in the post linked above), to $5,100,000 used now.  I think there’s some rounding or proration in there that’s created a gap of $225,000 in the simplified numbers.  But the end result is that with Rosen’s salary and bonuses off the books and Polak’s prorated salary added, the Leafs have $900,000 more room than they had before.

Edited to add November 5, 2017: I found a comment by CapFriendly that says they corrected an error on how the original LTIR and ACLS calculations were done. I think that affected the base amount coming out of the salary pool so that’s most of the discrepancy, the earlier numbers they posted contained the error.

Now, to be clear, this consideration isn’t why I think the Leafs signed Roman Polak.

All of the defence depth options the Leafs have and most of their young forwards with callup potential are in the same neighbourhood for cap hit.  Some cost more than others for use of the salary pool, but none of the differences are large.  It’s essentially irrelevant now, and will stay that way unless the Leafs add a player to push their use of the pool to the limit.  If that happens, a few thousand in cap hit or bonuses might matter.

Bonus content: With Eric Fehr clearing waivers today, he may be sent to the AHL. If that happens, the salary pool available should go up by $1.025 million, the amount of Fehr’s salary that can by buried in the AHL.  That would put it at over six million.

If Calle Rosen is called back, his $1.775 million drains the pool again.  Miro Aaltonen has the identical salary and bonuses.  Kasperi Kapanen’s total is $863,333.