Edited to add: This article has been rendered obsolete by newer information that came to light after it was published.
Last year, the Toronto Maple Leafs put Nathan Horton and Joffrey Lupul on LTIR and then never used the space. Well, they used like twenty bucks of it for a pizza one night, that’s it.
That choice seemed to be about flexibility. They could have traded for more players at the deadline — they wanted Cody Franson, Lamoriello said — but they ultimately didn’t find anyone, and the whole 10.5 million in space went unused. They were enough of a cap team that the entire stack of bonuses paid to rookies got rolled into this season, however.
And that brings me to the first point. The philosophy of a cap team with some LTIR space available is simple. Unspent cap space equals unscored goals, so use it all or use none because bonus overages are a worry. There is no point in having it, and only using some of it.
If the Leafs don’t use all the LTIR room, they could cut back their cap hits back to be three million or so below the cap to make room for this year’s bonuses. That is a difference of as much as $14 million in space not spent on players on the ice. That’s room enough to add two more overpaid UFAs, not one. And as overpaid as Patrick Marleau is, he’s going to score goals.
The Leafs should worry about bonus overages only if they think they can’t make the playoffs this year, so they shouldn’t do that.
Leaving cap space on your team in the current year “in case” you find another player later is fine while you’re still assembling your team. But if you’re planning to make the playoffs and see how far your current core of players can take you, you want a full roster in training camp. If you want to move out a guy at the trade deadline to get someone else in to fix a weakness, you better have movable players. That’s where your flexibility comes from.
The only thing worse than leaving a space to fill later in the year is saving up the cap space now for those big contracts you have to sign years down the road. You know who does that? Budget teams who are trying to win without a full slate of players. It’s the dumbest cap strategy in the NHL, and when you see a team do it, you see a team that plans on being bad for years.
So now that we’re used to the idea that the Leafs are going to spend, spend, spend all the time, from now on without stopping, how much space do they have right now?
As of now, not one thin dime. According to CapFriendly, and as detailed by us a couple of days ago, the Leafs are in the red on the salary cap. So the Leafs are already into LTIR territory a little. Sort of. You don’t actually get to use LTIR in the summer. And the players listed by CapFriendly right now are likely not quite who will be on the active roster come the first day of the regular season. Read that earlier story for more details on that idea.
You don’t have an active roster in the summer either. Many fans know that you can go over the cap by 10 per cent in the off-season. But with no active roster to use to add up the cost of the team, as opposed to all the other guys who are in the minors, who counts towards that inflated cap?
The Athletic tackled this idea here, and came to the conclusion that the Leafs have room for one more player. They apologized for the complexity of the topic.
This is the new reality for Leafs fans. We have to learn this and get used to it because the Leafs will be a cap team with LTIR space for three more years while Nathan Horton’s contract runs out. So, sit up straight and pay attention. You will be tested on this, and if you fail, you have to become a Habs fan.
Edited to add: the basic concept is sound, except the league says teams can, and the Leafs are using LTIR during the off-season.
Ten per cent of the cap is $7.5 million. So the cap during the summer is $82.5 million. On opening day, you have to cull your cap hits down to $75 million, and that’s when you get activate LTIR and bury contracts in the AHL. The amount of cap hit you can bury in the AHL this year is $1,025,000.
You might as well buck up right now and realize that Ben Smith, with his cap friendly minimum-salary contract of $650,000, may well stay on the active roster while players you think are better get sent down. Josh Leivo’s even lower cap hit will also make him a man worth keeping around as an extra. We might finally have the definitive answer on why the Leafs chose to protect him over Brendan Leipsic.
The Leafs’ LTIR space this season is 10.55 million, and this is (hopefully) the only time their LTIR space is greater than 10 per cent of the cap. So this year is more complicated.
The Leafs can have a larger total cap hit on day one of the regular season than they can in the summer.
The Cheat Code
This is the quick and dirty way to think about this. You can go over by 10% in the summer. On day one of the regular season, you can put players who can’t ever play on LTIR. The difference between the 10% and the LTIR space for the Leafs this year is about $3 million. So the Leafs can add a player costing around that, but that can’t do it until October.
The Long Version
The long version means wrapping our heads around how you add up the cap hits in the summer. This is all contained in Article 50 of the CBA, and it’s not super complex, but it is not what CapFriendly shows on their site.
You take everyone on a one-way contract (suddenly these one-way vs two-way contracts mean something again) plus everyone on a two-way contract, prorated by how many days they were on the NHL roster in the prior year. So if that’s zero, like for the recently signed Justin Holl, his contract is irrelevant.
This is relatively simple to do for the Leafs because only three members of the team on two-way deals played some number of days last year other than zero or all of them. Garret Sparks, Nikita Soshnikov and Kasperi Kapanen are the three that need to be prorated.
Note that if Sparks had signed a one-way deal for this season, his whole cap hit would be added in, not four days of it, so that oddball deal structure helped the Leafs out this summer.
I’d get right down to business and do the math, but someone else already did:
This is what I've calculated pic.twitter.com/r8ijEorHhG— Matthew Gooding (@matthew_gooding) July 4, 2017
And that is almost right. One thing is missing. The blank spaces beside Connor Brown and Zach Hyman shouldn’t be blank. Our reading of the CBA shows that all qualifying offers, including offer sheets, have to be added in to the off-season cap hits as if they were contracted amounts until they expire.
Any amount offered in that League Year by the Club in a Qualifying Offer or in an Offer Sheet to a Restricted Free Agent from the date of such offer until the earliest of the following: (A) the Restricted Free Agent signs an SPC with the Club; (B) the Restricted Free Agent signs an SPC with another Club; or (C) the Qualifying Offer expires pursuant to Section 10.2 (for purposes of Two-Way Qualifying Offers, the NHL portion of the Qualifying Offer 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 so that, for example, a Player who spent forty-six (46) days on an NHL Roster (including days on Injured Reserve, Injured Non-Roster and Non-Roster status) in a 184-day regular season, and receives a Qualifying Offer for $525,000 (NHL) / $50,000 (AHL), the portion of his Qualifying Offer that will count for off-season accounting purposes will be 46/184 x $525,000 = $131,250)
Since both Hyman and Brown played a full year with the Leafs, their full qualifying offer amounts have to be added in. That is $850,500 plus $715,000 (using CapFriendly’s QO calculator) for a total of $1.5655 million.
So the actual off-season space is: $1,858,352. Cough. Well it was. Up until last night. So I shall now redo that correction to Matthew Goodings numbers with Hyman’s actual AAV in there and Brown’s QO:
New off-season cap space calculation
So $458,852 is the actual cap space right now — not so much space as a thin, uncomfortable cushion — until the QO for Brown expires on July 15, and then it balloons up again to a massive $1,173,852.
Matthew Gooding has a spreadsheet to track this, and he’s corrected a couple of tiny mistakes.
I don’t think Brown is signing for that. So until the Leafs move out a player or players to make cap space, Brown will remain unsigned.
Now we’ve learned another cap team lesson: Your team might wait a long time to sign the RFAs for cap reasons and not any big drama over negotiations.
Edited to add: since the Leafs are using LTIR right now of an unknown amount (Horton and Lupul or just Horton?) they have at least six million in space, so they can sign Brown at any time. The issue of getting a roster to fit in the regular season cap space still stands. It depends on who is on the active roster.
Regular Season Space
The cap space in the regular season is simple. It’s $75 million. Period. It doesn’t expand like Joey’s Thanksgiving pants on Friends. It is a hard cap. LTIR space isn’t extra. It’s just there to mitigate the fact that teams have players who can’t play cutting into the usable cap space.
This is glossing over the complexities of setting a roster and designating players to LTIR, but effectively, you can think of it as Lupul’s and Horton’s contracts are erased from the list of cap hits when they are put on LTIR. Then you just need to know who the 23 players are on the active roster and add up their cap hits and toss in that dead space from buyouts and retained salaries, etc. and you have your regular season total.
To calculate that now is speculation. But it’s less than that off-season amount. It might be lower by a lot, so there will be more room.
The off-season amount discussed above includes two AHL players on one-way deals. It also includes all the extra forwards and defenders currently on the team on one-way deals. So out of all the Leafs players, pick 23, make your roster, see what it costs. Then you know how much the Leafs could spend on opening day — enough for a UFA defender perhaps, one who has quietly gone unsigned so far.
Lou Lamoriello’s Next Move
He can do nothing. Technically, the Leafs can carry this crew as is into training camp and just not sign Brown until after opening day, and everything is fine. That’s not likely to happen.
The more likely scenario is that the Leafs simply trade a few players off this roster sometime in the next two months, sign Brown, and then make the decision on using the rest of the available regular season space when the regular season is upon us.
But they should use it, all of it. Spend it all on goals, score as many as you can, and see how far that takes you. That’s how it should be from now on.