Players on LTIR still count against the cap. In the summer, there is no LTIR, but teams can go up to 10% over the cap. If the cap is 83 mil next year, that means they can go 8.3 mil over during the summer. Horton only takes up 5.3 mil of that.
When the season starts, he is placed on LTIR, but he still counts against the cap. However, Toronto will be allowed to go over the cap based on their total cap commitment when they place him on LTIR. For example, if they are at 82 mil to start the season and they place him on LTIR, they can then go over the cap by 4.3 mil (82 + 5.3 = 87.3). Teams in this situation try to get as close to the cap as possible before placing the player(s) on LTIR so that they can get the maximum amount of LTIR cap space (though there is a limit, I think).
LTIR cap space doesn't work the same as regular cap space. Regular cap space can be banked. LTIR space is use it or lose it.
Imagine the cap is 100 million and the season is 100 days long. That means teams can spend 1 mil per day. On day 1 of the season, they only spend 950k. That 50k that they didn't spend can be saved to use later in the season.
Now imagine the same 100 mil cap and 100 day season, but a team places a player on LTIR and now they can go up to 105 mil (1.05 mil per day). On day one, they spend 1.02 mil. That 30k that they didn't spend CANNOT be saved and used later.
To add to this, including Horton, Toronto has $72M in salary committed for next season. That includes 8F (not including Horton, since he's never playing again), 5D, and 1G.
Assuming the cap goes up the full 5% next season, taking it to $83.475M, the 10% summer cap buffer brings it to $91.823M.
Toronto's key RFA list:
Marner
Kapanen
Johnsson
Sparks
UFA list:
Lindholm
Gardiner
Essentially, Toronto has $20M to fill out their roster with a mixture of RFAs and UFAs. They could use that entire amount, but then would need to shed almost $8.5M in salary before Day 1 of the Regular Season. Horton is an automatic $5.3M to LTIR. That leaves $3.2M more to shed. They need 4F, 1D, and 1G. They essentially have $16.8M to do it.
Will Marner accept a bridge deal? That's the big question. I can't remember the last time a player that good got bridged coming off their ELC. Even if he did, I would imagine his AAV still lands somewhere in the $7M+ range, but I'm sure RB has a better idea. Probably over $10M if he takes a similar deal to Matthews.
Kapanen is probably looking at $3.25M on a bridge deal.
Johnsson maybe $2M.
If they can get Sparks to sign his QO, that's about $700k.
Assume they let their UFAs walk.
All in all, that leaves a little less than $4M to sign one more F and one more D to get them to the absolute smallest roster they can have. They also have that additional $3.2M that they can exceed the cap by over the summer.
And that's the rosiest scenario I can put together for that team, and that's with their defense still looking like trash.
If Marner won't accept a bridge, or they want to actually improve their D, they absolutely have to move someone with a sizable cap hit. Prime suspects would be Nylander ($7M - 5 more years), Kadri ($4.5 - 3 more years), or Zaitsev ($4.5M - 5 more years).
Nylander probably has a lot of value, but has been trash this season after holding out. Kadri is a decent contract for them, so I don't think they'd want to move him. Zaitsev is basically unmovable with the length of his contract.
I guess the obvious conclusion is that Nylander is a goner, but Toronto is in a tough spot. They're more than likely not going to trade Nylander during the season, because they're going for it now. However, the longer they wait, the more of a cap crunch they're going to be in as it becomes obvious to other GMs that they don't have the cap space to re-sign their RFAs. Factor in something crazy happening like a $12M offer sheet on Marner. Nashville could actually get away with something like that. 4 late 1sts for a guy who would instantly become their best F makes a lot of sense.
