Why the Flames signed Nicklas Grossmann

The only thing that made less sense than starting Nicklas
Grossmann in the Calgary Flames’ first game of the regular season in Edmonton
last night was signing the brick-footed defenceman altogether.

But, as Brad Treliving explained hours after inking Grossmann
on Tuesday, there was a definite method to his madness. Ladislav Smid won’t
play for the Calgary Flames this season, but they’re still on the hook for his $4 million salary and $3.5 million cap hit. On the surface, there’s a
simple solution to this: throw him on long term injured reserve and redeem the $3.5 million in cap space to spend on a new shiny toy!

Not so fast.

We all laughed at the Flames when they submitted their
official roster to the NHL office on Tuesday with cap space totalling just over
$8,000. We also scratched our heads because the reason they had
zero breathing room under the cap was their bewildering signing of Grossmann which not only erased any space under the cap, but also muddied an
already unclear situation on the Flames’ blueline.

What the heck, Brad? We thought you were a wizard genius?

Well, he is. As it turns out, LTIR space is only afforded to
the teams that actually need that space. As Cap Friendly explains, in order to get full LTIR relief, a team needs to have literally zero
cap space when they designate that player for LTIR, because the cap savings you
receive is calculated under this formula:

LTIR Cap Relief = Cap Hit of LTIR’d Player – (Salary Cap –
Current Team Salary Total)

Meaning, every penny the Flames are under the salary cap
when they LTIR Smid is deducted from the savings they would receive from his
contract. 

So, considering Brett Kulak and his $656,666 cap hit made
the roster, that left the team just a shade over $575,000 in cap space to play
with. Under normal circumstances, the Flames would take it and start the season
as is. However, this season, if they did that, then when they eventually LTIR
Smid, they would’ve received only $2.925M of his $3.5M in cap relief. Thus,
signing Grossmann to his gross, but very specific contract.

“You’re adding a contract to help your cap situation,” Brad
Treliving noted on Sportsnet 960 after the signing.

My initial reaction to learning this quirk was “Why not just
call up someone from the farm to fill that extra space?” Well, as it turns out,
nobody comes that cheap. Any call up from Stockton would put the Flames over
the salary cap, thus the need to sign somebody from the outside to a very
specific deal.

At first, it sounded like the Flames were really high on
Lauri Korpikoski and might’ve actually gone down that road had the Dallas Stars
not stepped in with a contract offer – and a more lucrative one, at that. Since
Grossmann had history with Gulutzan and had been with the team since the
beginning of the season, the match was there. Plus, the Flames can option
Grossmann to the AHL and regain the cap space in full should they choose to do
so down the road. It’s not a good match by any means, but one can understand the logic thinking behind it. 

So that is the reason the Calgary Flames signed the God-awful
Nicklas Grossmann to a contract. As for why the Calgary Flames played the God-awful Nicklas Grossmann in Edmonton to start the
season? I don’t think anyone – Glen Gulutzan included – will ever have a good
answer to that. Let’s just hope it never happens again.

  • cberg

    Very true about the Cap situation, and the game situation. So…. when does Smid go on LTIR? And secondly, what do we do with the $3.5mm(less $8000) in new Salary Cap room? Might there be a deal that might work with Anaheim? One of their D coming this way, one of our support guys/prospects/picks going back?

    BTW, after that awful start to the game for Grossman, he wasn’t noticeable which is a good thing.

    • cjc

      Someone correct me if I’m wrong:

      I think what needs to happen is: someone gets injured (bad enough to go on IR, since day-to-day players are still roster), Smid gets moved to LTIR, then Calgary can use the cap relief to bring another body in. They can’t just move Smid to LTIR because they already have a full roster.

      • piscera.infada

        It’s convoluted, but when you read the section regarding LTIR in the CBA, that’s pretty much how I read it. You can’t just get cap-relief for the sake of cap-relief. You need to legitimately have a situation arise where the cap-relief keeps your roster solvent.

        In other words, it seems very “spirit of the law”.

      • cberg

        I believe you are correct in that Smid is a non-roster player whose Contract still counts against the Cap. Once we put him on LTIR we get the Cap relief but we would have to move a player off the roster via trade, IR or demotion in order to add a new one.

  • reidja

    Is there any requirement within the LTIR rules that require a team to play a player signed in order to get max relief (as Grossmann was)? Only reason I can think of for starting him over JJ and BK.

  • prendrefeu

    Thanks for writing this up and explaining it all. If only this was explained to us when Grossman was first signed!

    Hopefully Coach G will re-shuffle him out of the lineup and eventually down to the AHL.

    Is there a game limit or parameters that need to be met in order for that to happen, or can it happen, oh… before the next game? 🙂

    • NHL93

      I live all the way out in the UK.. and decided this year I would give nhl.tv my money per month to watch the Flames from abroad. My first game in years and Grossman fires a puck from behind the net up the middle, giving the Oilers their first goal of the season. Needless to say, seeing defensive adjustments like this make me feel a lot better about spending the money.

    • Backburner

      Didn’t take him too long to figure that one out lol.

      Gully seems to big on pairs: Monahan-Gaudreau, Bennett-Brouwer, Backlund-Frolik. Well for the same reason you don’t split up Gaudreau-Monahan.. you don’t split up Giordano-Brodie!!

      • trox

        Based on how quickly he abandoned this experiment, I wonder if it wasn’t someone else’s idea (i.e. Burke). Maybe Gully was just following orders, and can now say “Tried it and it didn’t work”.

  • DangleSnipeCelly

    I’m glad someone explained this, thanks! What a crazy business, great deal for Grossman. Hope he buys a nice suit and a recliner for the press box.

  • the_cheat

    This doesn’t explain why they didn’t use that $575k on a defender that was worth that money and that you would actually be a good option playing in the lineup like Nakladal that we let sign to Carolina. I believe Nakladal got $600k that we could have paid him instead of Grossman and just paid Versteeg $25k less and he still would have come here. Not sure if there were ever any strong rumors linking him to Calgary or if the delay of Gaudreau signing caused Nakladal to have to sign elsewhere since BT was waiting to see how much cap room he had left afterwards, but signing Grossman over Nakladal was my biggest miss of the offseason for BT. And then GG playing Grossman (why?) the first game made even less sense.

    • cjc

      Nakladal signed the day before JG. While I think it was a miss to let him go, the team clearly didn’t meet his demands. Carolina gave him a one-way, maybe Calgary only offered him another 2-way? We don’t know what Versteeg would have done if we offered less.

      Also, a cursory look at the FA options for D-men is very underwhelming. Most of those guys aren’t going to sign for $575K, or they are complete unknowns, or they are no better than Grossman. Any potential options that came through waivers were just too expensive (unless they didn’t sign Versteeg). So I kind of get it in that regard.

      There were a few interesting forwards out there, but they must have had their reasons for signing a D instead.

  • Greatsave

    I’d appreciate a further explanation of why Smid *hasn’t* been LTIR’ed yet. I think it’d provide a more complete picture of why the Flames are doing the things they are doing, the pro’s and con’s of doing things this way vs. not signing Grossmann, and how we fans should critique Treliving’s moves.

    My understanding is that @cjc is correct, in that Smid is currently on regular IR and doesn’t need to be moved onto LTIR until there is a cap overage.

    Furthermore, placing a player on LTIR means the team no longer banks cap space. Normally, a team would accrue cap space by virtue of being under the cap ceiling. For example, if a team has a cap hit of $70m, and assuming the season has 180 days, and the trade deadline fell on say the 135th day, then by the TDL, the team would have the equivalent of $70m * 135/180 or $52.5m of actual cap hit, leaving them with (assuming a cap ceiling of $73m like this season) $20.5m over the remaining 45 days. This means they can actually carry a roster of $20.5m * 180/45 or $82m after the TDL. But with a player on LTIR, this cap space accruement benefit is lost.

    Now the question becomes, if Smid is being kept off the LTIR in part to keep accruing cap space, why are we currently maxed out in cap hit (i.e. minimizing our accruement) instead of sending Kulak to the minors so we can accrue those savings as well? From a cap perspective, it feels like, yes Treliving took steps to maximize his options and potential benefits, but not actually taking a decisive step to *realize* those benefits.

    • Christian Roatis

      I think I explained it pretty simply?

      But I can break it down further. Basically, the cap relief you get from putting a person on LTIR is just determined by the formula:

      Relief = Player Cap Hit – (Salary Cap – Team Cap Hit)

      So, LTIRing Smid right now would result in:

      3.5M – (73M – $72,991,730M) = Cap Relief

      3.5M – $8,270 = $3,491,730.

      So by signing Grossmann and pushing themselves against the cap, they would receive $3.491M of a possible $3.5M in a Smid to the LTIR scenario.

      Don’t know if a 5 year old would get that math but I hope that makes sense!

      • beloch

        With Grossmann:
        Cap Relief = 3.5M – (73,000,000 – 72,991,734) = $3,491,734
        Cap Space = Unused Cap Space + Cap Relief = $3.5M
        Without Grossmann:
        Cap Relief = 3.5M – (73,000,000 – 72,416,734) = $2,916,734
        Cap Space = Unused Cap Space + Cap Relief = $3.5M

        So, the Flames get more cap relief thanks to signing Grossmann, but it leaves them with exactly the same amount of cap space because Grossmann does actually have to be paid.

        It’s certainly possible that burying Grossmann in the minors once Smid goes on LTIR would produce a net gain in cap space. I don’t know if the rules are smart enough to close that loophole. They could be. However, for as long as Grossmann remains with the team, the Flames have gained nothing, except a very bad defenceman.

      • The Real Slim Brodie

        You were making sense until your last sentence. I’m not sure why you need to act like a dick when the guy was actually pretty nice and clearly just looking for more info. I’m not sure if an egotistical ass will get this but I feel it’s self expanitory!!!

      • thumz

        Hmmmm… so they signed him just to add depth for virtually no added cap hit. I guess depth is good, but hopefully we won’t need too much (Grossman) depth;)

        Cap space no Grossman:
        Cap Space = Salary Cap – Team Cap Hit + Relief
        where:
        Salary Cap = 73M,
        Team Cap Hit = 72.41673,
        Relief = 3.5M – (73M – 72.41673) = 2.91673M

        Cap space = 3.5M

        Cap space with Grossman:
        Cap Space = Salary Cap – Team Cap Hit + Relief
        where:
        Salary Cap = 73M,
        Team Cap Hit = 72.41673,
        Relief = 3.5M – (73M – 72.991730) = 3.491730M

        Cap space = 3.5M

    • StarIV

      LTIR exists to help teams up against the cap cope with injuries. A team that uses LTIR is allowed to receive a cap benefit of no more than the cap hit of the injured player. I’ll use an example to demonstrate.

      Chicago is $54,000 under the cap. Let’s say that Brian Campbell (1.5M AAV) is injured and is placed on IR. Chicago is not allowed to recall any player from AHL, since doing so will put them over the cap (IR gives no cap relief). If they put Campbell on LTIR, they can gain up to 1.5M in cap space to bring up a player from the AHL. LTIR allows them to exceed the cap, but only with a player with a salary of 1.5M or less.

      • piscera.infada

        If Chicago is $54,000.00 under the cap, and they put Campbell on LTIR, they can go $1.446 million over the cap (not $1.5 million). That’s the whole point of the article.

        The math is thus:

        $1,500,000.00 [Campbell’s cap hit]

        ($54,000.00) [minus the amount Chicago is under the cap]

        =$1,446,000.00 [equals “allowable overage” from designating Campbell to LTIR]

  • Hubcap1

    I’ll pose the same question that I did in the Mailbag blog. And got no response to.

    Can the additional cap space created by using LTIR be used to cover a bonus overage situation at seasons end?

    My initial thought is no, but I can’t find any answers on the net. Can anyone else clarify?

    The reason I ask is because I would assume that Bennett and maybe others will be collecting bonuses on top of their salaries. Having no cap space would place the Flames in a bonus overage situation, reducing their available cap space next season.

    Of course it’s early and many change’s may/will happen between now and the trade deadline.

    • Baalzamon

      Can the additional cap space created by using LTIR be used to cover a bonus overage situation at seasons end?

      I don’t think so. I think if you’re using LTIR you’re over the cap, so all earned bonuses are overages the following year.

      I really hope that’s not the case.

      • Hubcap1

        Thanks Baalzamon, this is something that will probably affect what type of moves the Flames look to make or need to make later in the season.

        I really wish this team would stop handy capping themselves cap wise, at least get that part of the ship righted. I guess that will hopefully happen next year with a few dead weight contracts expiring.

      • no bonuses are applied to the cap on the following year. LTIR is for the current year.

        As others have stated and Christian has put the math reasoning behind it. What that means in laymens is just that you have to be very close to the cap ceiling for the LTIR relief to have maximal impact.

        If you’re under the cap by 3.5 million and you LTIR Smid it doesn’t provide you any relief because you’re not at the ceiling. So you can’t go out and sign someone for 7million you can only sing someone for 3.5.

  • Johnny Goooooooaldreau

    So this means that once they LTIR Smid they can send Grossman down and bring up or sign/ trade for whoever they want.

    Probably had to promise Grossman a game in order to get him to sign similar to what they did with Backstrom last season.

    • JBulls

      Why did we sign a guy with one of the highest save percentages in the league over the past 5 years? And who looked great in preseason?

      Guess it’s just a mystery.

      • McRib

        “One of the highest save percentages in the league over the past 5 years… ” We aren’t talking about in the Top. 15 or anything like that, we are talking about the SECOND Highest Save Percentage (behind only Cory Schneider, by 0.02%) in the last five years. Hahah

  • This may sounds a little cheesy, but I’m convinced they played him as a favour. I know we’re all frustrated that he was brutal, but my guess is that he’s well aware he won’t be playing much at all this year, and management/coaching promised him at least one game of playing time for being a good sport about all of this.

    Honestly, I’d prefer he play the very first game of the year than a mid-to-late season game. As for how GG made the lines, that’s a little wonky still. At least he learned from it today.

  • Baalzamon

    Possibly another factor: Grossmann now needs 11 games to reach the threshold for exposure in the expansion draft.

    Well, that and a contract extension… yeah, might be better to just not bother with all that.

  • BlueMoonNigel

    How I long for the days when hockey moves were made for hockey reasons and not to suffer the wrath of bean counters and shysters. Is this Gary’s foremost legacy?

    • cjc

      Say what you will about Gary Bettman, the salary cap may be the only thing that is keeping this league (and teams like the Flames) alive. Without it the southward talent drain would be far worse.

  • KACaribou

    I am glad some of you are entertained by the GM side of things. I definitely learned something from some of the postings.

    I don’t think this was typical Grossman. He had a couple of bad moments that resulted in goals. That second one could have been a goal for him, if not for a bad bounce.

    In any case, he is a huge tank of a man. That can serve a purpose from time to time once he gets into a bit of a flow.

  • jakethesnail

    The time for GG to experiment with his horrible D pairings would have been the last pre-season game when the team should have dressed close to their opening night line-up. Didn’t happen…

    I was not too impressed with his Swarm Offense either. Pond hockey against one of the better skating teams in the NHL. Unfortunately our D was left out to dry…

    I hope GG has learned his lesson. Hartley was probably shedding a tear for what his star D-men had to endure last night.

  • McRib

    I think people are being overcritical of our game yesterday, I mean come on we outshot them 41-27. If not for an off night from Elliot and two brutal early turnovers from Grossman that lead directly to goals (who will not likely be on team much longer) we by all accounts should have won. I mean even McDavids penatly shot goal shouldn’t have happened because Johnny should have drawn a penalty earlier in that series of the play. 9 times out of 10 we win yesterday 4-2 or 4-3. Don’t get me wrong I think we can play much better, but come on Edmonton got all the calls and bounces and we still should have won with average Elliot goaltending. Not to mention I am all for inflating Edmontons ego slightly to start the season. Edmonton got what they want (a win in new barn), I think we played into there hands a little to be honest, what other reason to start Grossman and have those messed up defense pairings. Even Gaudreau looked a little rusty last night as he has only had one full practice with GG and was in the wrong place a couple of times on special teams as a result of not fully understanding the new systems.