How LTIR works and how the Calgary Flames could use it

Friends, at some point we’ll get clarity on Oliver Kylington’s status for the remainder of the 2022-23 season. But until we do, we’ll keep getting a version of the same question in the mailbag: “Hey, can’t they just use LTIR to replace him?”

The answer is complicated, but let’s get into how the long-term injury reserve works, how cap relief would work, and how the Flames could get creative to maximize their flexibility.

First and foremost, the “Bona-Fide Long-Term Injury/Illness Exemption to the Upper Limit” is a salary cap mechanism within the CBA, laid out within Article 50, Section 10, Clause D of the CBA.

The intention is basically this: let’s say your team is spending to the cap – that was the intention of the cap system, teams spending most or all of their upper limit – and one of your key players gets hurt long-term. Oh no! But you don’t have any cap space to replace them because you’re spending to the cap! So within the CBA, they carved out an exception to the upper limit designed to allow teams to replace a key player who’s out for awhile by allowing teams to exceed the cap ceiling by up to their salary cap (subject to some restrictions that we’ll get to later).

Broadly-speaking, here’s the gist of it:

When a team has a player that will be out of action for both of 10 games and 24 days (or already has been), a team can move them from the Injury Reserve (which requires a player miss seven days) to the Long-Term Injury Reserve list. The Injury Reserve opens a roster spot, the Long-Term version also involves cap implications.

We’re operating under the assumption that Kylington would be eligible to be placed on LTIR, both because he’s missed enough time to qualify and because while his situation might not fall within the traditional parameters of “long-term injury or illness,” Jonathan Drouin was allowed to be placed on LTIR by the league at the end of the 2020-21 season in a fairly similar situation – so there’s a clear precedent.

Here’s how the cap piece works.

A team’s new salary spending upper limit is calculated like so:

(“Current Cap Space” refers to the amount of cap hits a team could add immediately and remain cap compliant.)

So if Kylington ($2.5 million cap hit) went on LTIR when the Flames had $1 million of Current Cap Space, the new LTIR ceiling for the Flames would be $82.5 million + $2.5 million – $1 million, or $84 million. The Flames would be allowed to spend that much until Kylington returned (or the regular season ended, because there’s no cap in the playoffs).

You’ve probably heard that teams don’t like using LTIR because it impacts their ability to accrue daily cap space. That’s not entirely true, it just makes it tougher for them to do so.

So in the earlier situation, if Kylington went on LTIR when the Flames had $1 million of Current Cap Space, that drops the Flames’ ACSL to $81.5 million. So if the Flames got their daily cap hit below $81.5 million, rather than the usual $82.5 million, then they could bank cap space. So it’d be challenging, and that’s by design – LTIR wasn’t designed to be a piggy bank.

So right now, per CapFriendly, the Flames have a 20-man roster and about $3.95 million in Current Cap Space. To maximize the benefits of Kylington going on LTIR, the idea would be to get the Current Cap Space as close to zero as humanly possible – while operating with a 23-man roster limit – in order to make the LTIR Ceiling and the ACSL as high as possible.

So if the Flames (a) are told Kylington is done for the year and (b) want to maximize their LTIR space, the simplest thing to do with their current roster would be to bring up their three most expensive players to try to zero out that $3.95 million in Current Cap Space. Right now, that would be Kevin Rooney ($1.125 million of his $1.3 million cap hit is buried in the AHL), Emilio Pettersen ($903,333) and Nicolas Meloche ($950,000). (That doesn’t draw the Current Cap Space down all the way, which really negates the benefit of doing anything with LTIR right now.)

Now, obviously their cap situation will look different in a month when it’s trade deadline time. And in that situation, they could always create more space before the deadline by sending players down, add a big cap hit to eat up their remaining space, then bring up some players from the AHL after they’ve gone into LTIR. There would be a lot of options potentially open to them once trades start happening, depending on the waiver status of the players they have on their NHL roster once things get moving.

LTIR is weird and complicated and messy, and probably one of the most frustrating parts of the CBA and cap system to understand. No word of a lie: I had to re-read the CBA twice to wrap my head around it, because it’s messy.

But this is the general shape of how things could work with LTIR, in the event it was an option and the Flames decided to explore that avenue.