LTIR. For those of you who don’t know, those four letters stand for Long-Term Injured Reserve. It is a designation the NHL gives players who are out of action with an injury that will force them to miss an extended amount of time. It also allows teams to get some cap relief. 

To place a player on LTIR, said player must miss a minimum of 10 NHL games AND 24 days of the NHL season. There are some other nuances to the designation but let’s just focus on what we’ve addressed so far. 

As everybody knows, NHL teams cannot exceed the upper limit of the salary cap during the regular season; except under one condition. Should a team place a player on LTIR, they are allowed to exceed the cap limit by the player’s average annual value. (IE: if a player has an AAV of $4M and gets placed on LTIR, their team can exceed the cap limit by up to $4M). 

With that being said, the NHL does not operate with a salary cap during The Stanley Cup Playoffs. Now, teams aren’t encouraged to go over the cap, but they are allowed if the right situation arises. 

And that brings us to the crux of this column. Over the past decade, there have been four instances in which a team exceeded the cap limit by a large amount in the playoffs all thanks to their crafty use of LTIR during the regular season. The 2015 Blackhawks, 2021 Lightning, 2023 Golden Knights, and 2024 Golden Knights each used the LTIR cap loophole to far exceed the cap’s upper limit during the playoffs and the first three instances resulted in each team winning The Stanley Cup. (We still have some time before we’ll know if the 2024 Golden Knights will make it a perfect four-for-four). 

The noise from around the hockey world has increased over the years regarding whether or not teams should be allowed to exceed the cap during the playoffs and how it creates a competitive advantage for teams who exploit the loophole. There have been numerous suggestions on how to fix the problem, but none have been acted on as of yet. 

So, now it’s our turn to propose a solution.

First, teams will still be allowed to exceed the cap’s upper limit during the playoffs if they are using LTIR when the regular season ends. 

Second, to placate all sides, teams who exceed the cap during a playoff year CANNOT then do so again the following season. For example, since the 2023 Golden Knights exploited the cap loophole with Mark Stone, they would not then be allowed to use it in 2024. (The Knights are currently using the loophole again and again because of Mark Stone). 

Third, to attempt to prevent teams from “loading up” with talent for a single year courtesy of the LTIR loophole, I’m proposing penalties for the amount they exceed the cap during the playoffs. Let’s say a team exceeds the cap limit by up to $3M, they would be docked a fifth-round draft pick in that year’s draft. (If they don’t own a fifth-round pick then it slides to the following year’s fifth-rounder).

Now, if they exceed the cap by anywhere from $3M to $4M, they’d be docked a fourth-round pick. Exceed it by $4M to $5M and you’d lose a third-round pick. $5M to $6M and the penalty becomes a second-rounder. And should they exceed the cap by more than $6M, then they’d forfeit a first-round draft pick. (If a team has multiple picks in any of the rounds in which they would be penalized, their highest pick would be the one they forfeit). 

This solution is inspired by MLB’s luxury tax and the various penalty thresholds teams pay if they exceed certain payroll totals. 

So, under this plan, teams would still be allowed to exploit the LTIR cap loophole, but only for a single year. Similar to how the NBA works, the following season they’d be hard-capped and unable to exceed the cap’s upper limit at any point during the regular season or playoffs. They’d receive no relief if they needed to use LTIR. And, to ensure that teams don’t do what the 2024 Golden Knights did at the Trade Deadline by loading up on talent for the playoffs, they’d then be penalized draft picks according to how much they exceed the cap during the playoffs. 

It’s a high-risk, high-reward solution. If you want to exploit the loophole and load up on talent, that’s fine. But you better make sure you win The Cup that year because you’re going to get heavily punished immediately afterward. 

Let’s take this year’s Golden Knights and make them our hypothetical example. Vegas loaded up at The Deadline because it had LTIR space to use. Then, when the cap went away for the playoffs, they’ve been able to use a roster that exceeded the cap limit by roughly $9M. 

Under my proposal, Vegas would be docked a first-round draft pick in this year’s draft. That would leave them without a single draft pick until the sixth round since they’ve traded away their second, third, fourth, and fifth-round selections. They’d also then be unable to get salary cap relief next season. That means, regardless of what LTIR designations they may need, they wouldn’t be allowed to exceed next season’s upper limit. 

Is this a fair solution? Would you prefer a harsher plan or one that doesn’t go to the lengths that this one does? Or, do you feel the current situation is fine? 

Either way, there’s one thing that’s certain and that’s that whenever there’s a loophole, somebody will always exploit it.