Can someone explain some LTIR details, please?

[MNNumbers]

Mods, please feel free to merge this into the CBA thread.

I seem to be lacking the capacity to understand how LTIR works, and even cap friendly isn't helping my question.

So, to use the example which is important to me...
Parise for Minnesota has 4 years left on his contract. Because of his back issues and other injuries, he is a potential LTIR contract, especially in the last 3 years of the contract, which pay him 2M 1M and 1M (7.5 AAV).

So, my question is, how does the cap relief from LTIR process in 2 different situations?
1) Let's say after game 1 of the 22-23 season, he decides his back won't take it any more. Now, for the rest of the season, is Minnesota able to use his full contract for other players?
2) Continuing that scenario, in the off season in summer of 2023, is Minnesota able to exceed the nominal cap because Parise is LTIR'd? Or, do they have to be in compliance for a portion of that? (Like, is there a 10% off season rule or something). And, if there is a 10% off season rule, how does that transition (without LTIR) to the hard season cap, and how does that affect LTIR?

Thanks.

 

[Golden_Jet]

If Parise AAV is 7.5, and your team is 5.5 under the cap, then you get 2 million extra to spend.
LTIR only counts after 10 missed games or 24 days.
Unless he retires there is no cap relief, unless up against the cap, which makes it hard to do any moves.

 

[StreetHawk]

Parise returning hurts Minny as his contract is subject to recapture.

LTIR, to get the most out of it, a team would need to be right near the cap ceiling. Teams need to use up the available cap room first before they can take advantage of ltir of the player’ free up cap hit.

 

[mouser]

Mods, please feel free to merge this into the CBA thread.

I seem to be lacking the capacity to understand how LTIR works, and even cap friendly isn't helping my question.

So, to use the example which is important to me...
Parise for Minnesota has 4 years left on his contract. Because of his back issues and other injuries, he is a potential LTIR contract, especially in the last 3 years of the contract, which pay him 2M 1M and 1M (7.5 AAV).

So, my question is, how does the cap relief from LTIR process in 2 different situations?
1) Let's say after game 1 of the 22-23 season, he decides his back won't take it any more. Now, for the rest of the season, is Minnesota able to use his full contract for other players?
2) Continuing that scenario, in the off season in summer of 2023, is Minnesota able to exceed the nominal cap because Parise is LTIR'd? Or, do they have to be in compliance for a portion of that? (Like, is there a 10% off season rule or something). And, if there is a 10% off season rule, how does that transition (without LTIR) to the hard season cap, and how does that affect LTIR?

Thanks.

1) Yes. But that doesn't automatically mean the team can spend $7.5m over the cap. When invoking LTIR you look at the team's current cap usage. They can replace the LTIR player even if it causes the team to go over the cap. So for example if Minny was $1.5m under the cap when activating LTIR on Parise they can replace his $7.5m, allowing the team to go as much as $6m over the cap. When invoking LTIR the team essentially get a new cap ceiling called the ACSL (Accruable Cap Space Limit) of whatever their cap was on that day.

2) There is a 110% offseason cap . LTIR can be used in the offseason, however the principle for establishing a ACSL works exactly the same as in (1). When beginning the season using LTIR there are options of either being cap compliant on day 1 and then using LTIR, or using LTIR on the final day of training camp to be cap compliant. The formulas for relief and setting a ACSL will vary between the two options.

Downsides of using LTIR:
- Unused LTIR does not pro-rate.
- Teams do not accrue cap space using LTIR. A team that was $1m under the cap can acquire ~$4.5m in contracts at the trade deadline, while a team with $1m in unused LTIR can acquire $1m in contracts at the deadline. So free space under the cap is always preferable to using LTIR.
- LTIR cannot be used to fit earned Performance Bonuses. So any team using LTIR at the end of the season will have their earned Performance Bonuses roll over to hit the next season's cap.

 

[MNNumbers]

1) Yes. But that doesn't automatically mean the team can spend $7.5m over the cap. When invoking LTIR you look at the team's current cap usage. They can replace the LTIR player even if it causes the team to go over the cap. So for example if Minny was $1.5m under the cap when activating LTIR on Parise they can replace his $7.5m, allowing the team to go as much as $6m over the cap. When invoking LTIR the team essentially get a new cap ceiling called the ACSL (Accruable Cap Space Limit) of whatever their cap was on that day.

2) There is a 110% offseason cap . LTIR can be used in the offseason, however the principle for establishing a ACSL works exactly the same as in (1). When beginning the season using LTIR there are options of either being cap compliant on day 1 and then using LTIR, or using LTIR on the final day of training camp to be cap compliant. The formulas for relief and setting a ACSL will vary between the two options.

Downsides of using LTIR:
- Unused LTIR does not pro-rate.
- Teams do not accrue cap space using LTIR. A team that was $1m under the cap can acquire ~$4.5m in contracts at the trade deadline, while a team with $1m in unused LTIR can acquire $1m in contracts at the deadline. So free space under the cap is always preferable to using LTIR.
- LTIR cannot be used to fit earned Performance Bonuses. So any team using LTIR at the end of the season will have their earned Performance Bonuses roll over to hit the next season's cap.

So, this would mean that, for the last two years of Parise's contact, Minnesota could....
1) Exceed the cap in training camp because of the 110% rule.
2) Invoke LTIR on Parise to mean the cap requirements....say they were at 106% of cap. Parise's contract is about 9% of the cap, so they would be in compliance, but would have no further cap space.

And, the following year, repeat?

 

[mouser]

So, this would mean that, for the last two years of Parise's contact, Minnesota could....
1) Exceed the cap in training camp because of the 110% rule.
2) Invoke LTIR on Parise to mean the cap requirements....say they were at 106% of cap. Parise's contract is about 9% of the cap, so they would be in compliance, but would have no further cap space.

And, the following year, repeat?

Yup, pretty much.