Photo Credit: via @SammyHudes on Twitter

The salary cap implications of Jaromir Jagr’s departure

The impending departure of Jaromir Jagr from the Calgary Flames is perhaps the worst-kept secret in all of professional hockey. While the Flames are currently tight-lipped about what’s happening – and I’d imagine that’s out of respect for all #68 has done for the game – pretty soon the two sides will be parting ways, either via contact termination or by him being placed on the long-term injury reserve.

Whenever that happens, there will be some interesting salary cap implications.

Jagr’s contract has a $1 million base salary and up to $1 million in performance bonuses. They each impact the cap differently.

Base salary (and cap hit)

Jagr’s contract was filed with the NHL’s Central Registry on Oct. 4, the second day of the season, so his $1 million salary is pro-rated – the most he could’ve made over a full season is $994,000. By leaving early, the Flames will save roughly $5,376 per day of cap spending. He’s already earned around $510,000 against the salary cap this season. Their total cap savings will depend on when Jagr’s contract is officially terminated.

The interesting impact here will be dependent on which player ends up taking Jagr’s roster spot. Aside from Dalton Prout, every single player on the Stockton Heat carries a lower cap hit than Jagr’s. Functionally speaking, if the net effect of Jagr’s departure is that Andrew Mangiapane ends up sticking around for the rest of the season – the club needs to make a move to open a spot when Michael Frolik comes off the injured reserve in about a month – they end up saving around $1,586 per day. It’s not huge money, but it adds up and could be valuable wiggle room at the end of the season.

Performance bonuses

Jagr’s deal also involved up to $1 million in performance bonuses (which he was eligible for as a player signing a deal after turning 35), broken down thusly (per CapFriendly):

  • $250,000 for playing in 10 games
  • $100,000 for playing in 20 games
  • $150,000 for playing in 30 games
  • $200,000 for playing in 45 games
  • $300,000 if the Flames make the playoffs

He’s already attained the first two bonuses for a total of $350,000. For salary cap purposes, performance bonuses are calculated at the end of the season. Teams are allowed to go over the cap ceiling, but only if what pushes them over the top are bonuses – this frequently happens due to bonuses on entry-level deals. Any spending over the cap counts against next year’s salary cap; the Flames currently have a $660,000 cap penalty because they went over last year’s cap due to bonuses.

Long-term injury reserve

In the event that Jagr’s contract is not terminated, there’s a good chance the Flames eventually opt to put him on the long-term injured reserve. In that case, the Flames will be able to replace Jagr on the roster with a player (or players) making up to his level of salary.

As we discovered last season, LTIR is weird and complicated and frustrating. The amount of cap space you gain depends on how much cap space you have when you elect to place players on LTIR, and it can also be declared retroactively. It’s much muddier in its cap implications than a straight up contract termination, but it’s another avenue that gives the Flames some cap relief should they try to add some salary at the trade deadline.

  • Bean-counting cowboy

    A friend of mine was at a function with Brian Burke yesterday. He confirmed Jagr is done with the Flames and that there is a “European team” looking to pick him up.

      • Bean-counting cowboy

        I have no way of knowing if Brian Burke was being truthful, but I am 100% sure that is what he told my friend. I saw the facebook picture of him and Burkie that he posted yesterday. Believe what you will! I have been commenting on this site since 2011 and have no reason to start making stuff up now!

  • Skylardog

    Nice analysis. I think many of us were thinking that as a 35+ year old, the contract did not receive cap relief, but that only applies to multi-year 35+ contracts. Good to see that him “retiring” will not cost us cap until the end of the season.

    While his play had slipped dramatically, his short time here appears to have given some of the young guys a great mentor, Bennett in particular seems to have pick up some great pointers.

    Him leaving knocks more than a whole year off the average age of the team, and that is when you count bringing in Mangi.

    To the Youth Movement! GFG

  • oilcanboyd

    What is taking so long? I don’t think this long drawn out departure is not helping Jag’s reputation.

    I would keep him on as a player-coach, mostly coaching the young guys how to be a professional hockey player and teach them ways to be better pro players.

    • HOCKEY83

      As I said a while back. All he’s been good for is a cheerleader dressing room guy. other than that he was a useless acquisition. Just a dog and pony show. The mil was worth the experience to the young guys but he’s been nothing but a detriment on the ice. Just a ridiculous side show act but hey they sold some jerseys.

      • Bean-counting cowboy

        Disagree. Stats suggest otherwise. Is he slow? Yes. Is he great on the back check? No. Does he maintain possession in the offensive zone? Yes. He’s also a big body that protects the puck and he still has a great mind for the game. Analytics suggest he pushed the needle the right direction. I think it all comes down to injuries and speed. Flames have faster options and Jagr couldn’t get any rhythm going being injured all the time.

        • HOCKEY83

          no…you’re right. A 46 year old deserved to take a roster spot over a prospect or even just a player 10 to 20 years younger. Injured all the time because he’s 46. No way this organization thought this was anything other than a gimmick.

      • HOCKEY83

        I find it hilarious that you people are trashing the fact that I think a 46 year old player who obviously can’t play hockey anymore due to his old body and slowed reflexes was a bad acquisition. Yes he was a great GREAT player but he’s not anymore. Get over it. If it was Edmonton who acquired him and this happened you’d all be giving it to them so bad right now.