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How the Edmonton Oilers will use the long-term injured reserve to reach cap compliancy

The Edmonton Oilers are in fairly new territory for themselves this year as an organization now having to utilize the long-term injured reserve.

Edmonton hasn’t been in a situation in recent years where they’ve had a player eligible, let alone someone as impactful, or someone with the salary like Oscar Klefbom. The defenceman is eligible for the LTIR this year as he will miss the season due to his arthritic shoulder.

When you head over to PuckPedia and take a look at the updated Oilers cap page post-Ethan Bear signing, you’d see the club is $2.2-million over the cap. While teams have the ability to exceed the cap by 10 percent in the offseason, they must be cap compliant by the time the regular season gets underway.

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For the Oilers, that’s one not-so-simple move of moving Klefbom to the LTIR. What makes it not so simple is the Oilers and their need to navigate the money surrounding their roster to be able to get the most cap space as possible.

Our friends over at PuckPedia did a great breakdown of how it works in relation to the Oilers and why we may see some interesting waiver moves.

The LTIR allows a team to exceed the cap and is calculated in one of two ways: 1) with the player on LTIR, the pool is how much a team is over the cap and 2) if a team is under the cap without the use of LTIR, the pool is the injured players cap hit less how much space the team has when the player is placed on LTIR.

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Through method one, the Oilers would have an LTIR pool of the $2.2-million they are currently over the cap. With Klefbom owed $4.167-million, it would leave roughly $2-million in pool space to be used. This scenario is unlikely to be utilized by the Oilers.

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Through method two, however, the Oilers would be able to utilize the full LTIR pool by making some paper transactions. . Here’s how PuckPedia explained it happening:

With this method, the goal is to submit the opening roster (minimum 20 players) under the $81.5M salary cap, with being as close to the cap as possible.  This becomes an exercise of finding the right combination of players to send down to make the numbers work, and balancing who needs waivers to be sent off the roster and is a risk of getting claimed.

A reminder that our baseline roster to start with is $2,214,167 projected over the cap for 23 players (plus Klefbom) and includes Koekkoek on the Roster and Lagesson off the roster.

They need to clear just over $2.2M Cap Hit for the opening roster.  They could do this by sending down Yamamoto ($894K) who does not need waivers, and then 2 players each with a cap hit over $1.075M (the burying threshold), which is the most cap space saved by sending someone down. Let’s assume that’s James Neal & Alex Chiasson. That still puts them with $830K cap space, which is too much as it reduces the LTIR Pool by that amount. Therefore, assume they add Tyler Benson ($808K) to the projected roster (in reality they would just not send him down yet). This leaves them with a Cap Hit of $81,478,333, which is $21,667 under the Salary Cap, and includes 21 players on the roster plus Klefbom.

In this example, before the opening roster, Neal and Chiasson are sent down and need to clear waivers, Yamamoto is sent down and does not require waivers, and Benson is on the opening roster.  After these moves, the Oilers would submit this roster with $22K Cap Space. Shortly after that submission, they would place Klefbom on LTIR, and their LTIR Pool would be his $4,167,000 Cap Hit minus the $21,667 Cap Space, for an LTIR pool of $4,145,333. They could then call up the 3 players sent down, send Benson down, and they would start the year $2.214M over the cap with 23 players on the roster (plus Klefbom on LTIR) and the ability to exceed the cap by $4.145M.

This is something to definitely keep an eye on over the next few weeks. Training camps open Sunday and the league’s regular-season kicks off on January 13th.

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On Twitter: @zjlaing