How does that make sense. If he’s on LTIR for the year, his cap hit exists, but it frees the Blues to exceed the cap by his salary, right? I think JR is saying this in a confusing way. Functionally is there much difference in cap ramifications if he formally retired vs if he LTIRed?
There is a pretty big difference between the contract being off the books and being on LTIR.
The most important consequence of using LTIR to exceed the cap is that you can't bank cap space like you can if you are simply under the cap.
Additionally, LTIR is not simply "you can always exceed the cap by the amount the player makes." It is a complex formula, but here is a bare bones example. Let's say a team's cap number is $80M with 23 guys on the roster. A player making $5M suffers a career ending injury and is placed on LTIR. The team is not given $5M of LTIR relief that allows them to exceed the cap by $5M. You have to get all the way up to the cap ceiling before LTIR relief gets calculated. So that $1.5M gap between the team's cap number and the cap ceiling gets taken out of the LTIR relief number and the team will be allowed to exceed the cap by $3.5M. This is important because it incentivizes teams getting as close as possible to the cap ceiling before placing a guy on LTIR in order to get maximum relief.
At the end of the day, Steen going on LTIR is very helpful to the Blues and eliminates any cap issues we were facing. But it does not give us the same flexibility and cap space that we would have if he had forfeited his remaining salary. And that is 100% okay. Steen played 12 seasons here, wore a letter, and accepted a reduced role for the good of the team to make the best 4th line in hockey on our Cup run. he doesn't owe this franchise anything beyond what he has given and the LTIR benefit we get is incredibly helpful.
As a note of caution: Don't be surprised if he isn't placed on LTIR to start the season. Unless we make another move or two that demands opening up that cap space on day 1, it is probably more beneficial to start the year with Tarasenko on LTIR and Steen on regular IR. Don't panic if he doesn't go to LTIR right away and assume Army doesn't know what he is doing. Depending on our salary outlook at the end of camp, we might see a more favorable LTIR calculation by waiting to LTIR Steen until Tarasenko is either ready to return or gets shut down for the year and we look for a mid-season acquisition.