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Making sense of the Flyers' cuts from a salary cap perspective

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On Friday the Flyers returned Samuel Morin to the QMJHL while waiving Jay Rosehill, Chris VandeVelde, and Rob Zepp. Let's take a look at how and why these moves were made.

Tom Szczerbowski-USA TODAY Sport

There's been a lot of speculation as to what the Flyers would do to get at or under the 23 man roster limit. Present company not excluded. I, at different times, argued that it could make sense to retain Shayne Gostisbehere or Samuel Morin so as to scrape every penny of the salary cap together that they could.

After Gostisbehere was already sent down, on Friday the Flyers made their final roster moves and returned Samuel Morin to the QMJHL and waived Jay Rosehill, Chris VandeVelde, and Rob Zepp.

So how and why did the Flyers come to this roster? It's all especially tricky with long-term injured reserve (LTIR) involved. There is a lot of misinformation out there about LTIR. Even some of the best writers frequently make mistakes related to it as it can be a very challenging topic. Let's take a deeper look.

How the injured players factor in

After the four cuts on Friday, the Flyers sit with a 22 man roster with three additional injured players in Chris Pronger, Kimmo Timonen and Ryan White. It's important to note that injured players cannot be waived and demoted. So this means Ryan White must remain at the NHL level and he will hit the salary cap.

Per section 13.6 of the CBA:

13.6 Disabled Player Loan to Minor Leagues. A Player who is otherwise required to clear Regular Waivers and who becomes disabled while on an NHL roster can be placed on Regular Waivers and be Loaned to a minor league club prior to appropriate medical clearance being granted only if the Player was on NHL Recall at the time he becomes disabled and has not played ten (10) NHL Games (cumulative) or remained on the NHL roster for thirty (30) days(cumulative) since his Recall.

So what is the Flyers final cap number with these 25 players? Add it all up and the Flyers have a payroll of $74.461 million on a $69 million salary cap. That's an overage of $5.461 million.

How do you combat a salary cap overage when you have injured players? Why, long-term injured reserve of course.

Utilizing LTIR to its full potential

This is where things start to get tricky. The Flyers have an overage of $5.461 million with three injured players -- Pronger ($4.941), Timonen ($2.00), and White's ($575k) cap hits total $7.516 million.

So $7.516 million in LTIR minus the $5.461 million overage, and the Flyers are good to go with $2.055 million in cap space right? Wrong.

When it comes to LTIR, it's all about when the team utilizes it. Depending upon when they choose (or sometimes are forced) to do so, there are different ways to maximize the amount of LTIR allowance they get. As always, I encourage everyone to head on over to Capgeek and give their FAQ on the topic a read.

In a nutshell:

  1. Build a roster that is under the salary cap limit of $69 million, but as close to that $69 million as is possible (LTIR is not "in addition to" any already existing cap space). Then on Day 1 of the season, place the players on LTIR and you are then allowed to exceed the cap by those player's full cap hits.

    So if the Flyers were able to get the roster to exactly $69 million. On Day 1 they place Pronger, Timonen and White on LTIR. They can now spend that extra $7.516 million.

    Unfortunately, getting the roster to $69 million is something the Flyers literally cannot do. So this is not an option.
  2. Build a roster that already includes replacements for your injured players, and place said players on LTIR before the season begins. The team should spend as much of that allowed LTIR amount as they can, because anything they don't spend is lost. They are then "deemed to have already fully replaced the injured player."

    So if the Flyers have a potential $7.516 million in potential LTIR but only add $5 million in new salary and then utilize LTIR as described in option 2 here ... they effectively forfeit $2.516 million. So the idea is to build the most expensive roster possible while staying just under (or at) your maximum LTIR allowance.

    This is the Flyers only option.

The Flyers have clearly already replaced Pronger and Timonen. Hell, that's basically why they are $5.416 million over the cap right now.

With the $5.416 million cap overage, the first step is the obvious one -- to place Pronger on LTIR (again, we're in "option 2" of the LTIR scenarios above). That takes care of most of the overage, and now the Flyers are only about $520k over their new upper limit.

Place Ryan White on LTIR ($575k) and all of a sudden the Flyers are compliant with $55k of wiggle room under their new upper limit thanks to Pronger and White's LTIR allowance.

If Jay Rosehill was not waived, that would be another $675k that they Flyers must have accounted for. They would need to then place Timonen on LTIR for his $2 million, effectively giving them $2.055 to use. However, they'd only be using $675k of it on Rosehill. They would then waste, and lose $1.38 million of potential space (2.055 - 0.675) when the season starts. Remember ... we are firmly in "option 2" of LTIR category here. Use it or lose it.

If Samuel Morin was not returned to Juniors, that would be another $894k that they Flyers must have accounted for. They would need to then place Timonen on LTIR for his $2 million, effectively giving them $2.055 to use. However, they'd only be using $894k of it on Morin. They would then waste, and lose $1.161 million of potential space (2.055 - 0.894) when the season starts.

By cutting both of those players, the Flyers enabled themselves to only have to use LTIR for Pronger and White -- not Timonen. Not only that, but they almost perfectly use all of the LTIR allowance for those two players, just missing using it all by $55k.

This frees the Flyers up to use Timonen on LTIR at a later date. At this point, Timonen's LTIR is firmly in "option 1". The Flyers are already cap compliant. So when Timonen is placed on LTIR, it's almost as if it's a new injury, and now the Flyers get to see the entire benefit of Timonen's $2 million cap hit and replace it.

It's for this reason that I pretty much expect Rosehill to be recalled in the near future. Timonen will be placed on LTIR. The Flyers will recall Rosehill and use only a portion of Timonen's $2 million at the time; but the key is that they do not lose the rest of that $2 milion. They can still use it at a later date.

CapGeek's tools can't simplify

CapGeek is the best. Their Armchair GM is incredible. However, LTIR is so complex that it's almost impossible for the Armchair GM tool to perfectly capture every nuance of the rule.  I hope that this in no way comes across as a criticism of CapGeek, but this tool can lead some people astray; especially during the offseason.

That's why when people, rightly, place Pronger and White on LTIR, CapGeek throws up this message:

Capgeek Armchair GM

They then see that CapGeek estimates $55k in cap space. But the tool doesn't account for the fact that LTIR was used before the season (aka "option 2" above). That "space" is forfeited because the Flyers are deemed to have already replaced those players.

Capgeek Armchair GM 2

When it comes down to it, the Flyers should have exactly $2 million in space remaining ... Kimmo Timonen's LTIR allowance, whenever he is eventually placed on it. If Rosehill is then recalled, he'll eat into a small portion of it, but he can always be waived and demoted again, to open up the full $2 million.