NHL Hard Salary Cap Has Forced Teams To Exploit LTIR

With Jack Eichel returning to the lineup for the Vegas Golden Knights on Wednesday night against the Colorado Avalanche, chatter has picked up again in regards to cap circumvention especially when it comes to long-term injury reserve (LTIR).

However, the Golden Knights are the first team and won’t be the last team to exploit this loophole in the CBA. Similar to what the Tampa Bay Lightning did last year with Nikita Kucherov, the Golden Knights had to make space for Eichel’s $10 million salary cap. Many people thought they would have to trade a key player. However, instead, Vegas put Mark Stone on LTIR because of his injured back. Stone’s $9.5 million does not count against the cap thus freeing up the money necessary to allow Eichel to play. Vegas also made another move here and there to get right up against the cap.

The kicker is nobody knows how long Stone will be out of action. If the reports are correct, the earliest he will return is the playoffs. Just in time for the salary cap to go away and allows the Golden Knights and other teams to go over the salary cap.

As previously mentioned, Tampa Bay did this last year and there was this giant uproar when Kucherov came back. Now Kucherov was a big reason why the Lightning won back-to-back Stanley Cups, but still, the Lightning were $17.3 million over the salary cap. But they were not the only team over the salary. Towards the end of the 2020/21 season, 17 teams were over the salary cap. So the phrase every team does it is not for off. General manager Julien BriseBois just did a better job than the other general managers.

But do not get mad at the Lightning or Golden Knights, they are just following what the Chicago Blackhawks did back in 2015. Remember, Patrick Kane went on LTIR right before the trade deadline allowing the Blackhawks to add three pieces that were crucial in them winning their third Stanley Cup in six years. And you can’t fault any of these teams really for taking advantage of a loophole.

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While fans cry about their team not doing this, it is totally legal under the current system set up by Commissioner Gary Bettman and the NHL during the 2004-05 lockout. Not only that but since the Kucherov incident of a year ago, the NHL is closely monitoring injuries and the use of LTIR. With Stone, his back has been bothering him and has missed significant stretches during the season.

Over time GMs would figure out ways to circumvent the cap to sign players to these back-diving long-term contracts. The league would see another lockout in 2012-13 to address those contracts. Out of that lockout, teams could only sign their free agents to eight-year max deals and any unrestricted free agent could get a max seven-year deal.

Even though the salary cap has risen since 04-05, it hinders the ability for good teams to be great teams for long stretches. Granted, most GMs are good at manipulating the salary cap not. But Instead of criticizing the NHL for having the LTIR loophole, maybe address the fact the hard salary has allowed for exploiting of the CBA instead of what the salary cap was meant to be and that was to create parity.

What if there was a way to allow teams to spend over the salary cap and still maintain a competitive edge without exploiting rules in the CBA.

In the salary cap era, teams who have won by drafting and developing their talent often have to pay the price for their success. Instead of being able to keep their talent on the roster, teams often have to pick and choose which players they want to keep by moving vital players to fit under the salary cap.

In this current system, the bigger market teams have to pay a penalty for wanting to spend more. As outspoken player agent Allan Walsh tweeted out by on July 23, 2019.

NHL teams are twisting themselves into pretzels to figure out a way to spend $92 million on payroll with a $81.5 million Upper Limit. As I’ve been saying for years, the salary cap is a farce and the idea that the cap promotes parity is an illusion.

— Allan Walsh (@walsha) July 23, 2019

But what if there was a way to solve that problem and still generate the revenue the league wants. The answer is simple a soft salary cap with a luxury tax. Not to the extent that MLB or the NBA has it. But finding a middle ground where bigger market teams spend more money keeping their team intact instead of worrying about how to fit players inside a hard salary cap. And if teams went over the salary they have to pay a luxury tax. The revenue generated from the luxury tax could be distributed to smaller market teams.

How about letting teams spend over the cap but charge them a luxury tax that gets distributed to the small market teams as meaningful revenue sharing? https://t.co/s4eG8mT0ZT

— Allan Walsh (@walsha) July 23, 2019

Once it was announced Eichel was coming back, Walsh took to Twitter again voicing his opinion.

One of the best arguments for a luxury tax with meaningful revenue sharing in the NHL. The idea that the hard cap system leads to “competitive balance and parity” is Gary’s illusion, a fallacy…a total joke. Open the system to a luxury tax to even the playing field. https://t.co/xyStYF3UBL

— Allan Walsh (@walsha) February 14, 2022

This season is a perfect example of why the hard salary cap in the NHL is just not working. So many teams will have to exploit LTIR once again because they are up against an $81.5 million salary cap. Granted nobody saw a pandemic coming, but still, there has to be a way to get around this problem.

Vegas is the first to exploit LTIR this season and they will not be the last especially with teams out of the playoffs saying they would be open to taking on salary to help out the better teams in the league.