Detroit Red Wings

Detroit Red Wings are Facing a Dangerous Cap Crunch

(Fred Kfoury III/Icon Sportswire)

The Detroit Red Wings are off to a 6-5-1 start on their 2015-2016 season — and that’s good for fifth in the Atlantic Division, which is acceptable enough.

They’ve scored 30 goals, only being scored on 31 times in return. They have a winning record on the road and a perfect .500 record at home, they’ve won their last two games, and Henrik Zetterberg is doing pretty all right. The 35-year-old captain has 14 points in 12 games to start off the year. Gustav Nyquist is playing up to his new contract, Dylan Larkin is exceeding expectations, and both Jimmy Howard and Petr Mrazek are playing well.

The problem for the Red Wings doesn’t lie on the ice though. It lies off it, particularly in the player payroll department.

The issue? The Red Wings are only $1.62 million under their long-term injured reserve modified upper limit for the salary cap, and Pavel Datsyuk’s $7.5 million cap hit isn’t a part of that equation.


How Does Long-Term Injured Reserve Work? 

At the start of the 2015-2016 season, the Detroit Red Wings placed Datsyuk on long-term injured reserve for the early parts of the team’s campaign.

Long-term injured reserve requires that a player stay off the active roster for at least ten games, but it provides a benefit that short-term injured reserve doesn’t; where IR allows a team to recall another skater to fill an active roster spot that an injured player would have filled, LTIR also adds addition cap space to a team’s allowed payroll limit to match the annual average salary amount for the player who will be out of the lineup for an extended period of time.

There are plenty of misconceptions about LTIR, namely that it ‘erases’ a player’s cap hit while he’s out. It actually doesn’t. It simply matches the player’s cap hit with added space for the team’s cap ‘ceiling’, or upper limit. This gives a team an extra couple million dollars in cap space to work with while a player is out long-term, which is particularly beneficial when a player is paid top dollar.

That doesn’t mean that the cap hit for the injured player is gone. Quite the opposite; as soon as he’s cleared to return to the active roster, the team loses that added space to the upper limit. In order to return the player to the active roster, his club must both get the roster to a point where it is cap compliant again and to where it meets the maximum numbers of players allowed in the lineup.


How Does This Affect the Red Wings?

Datsyuk’s return is likely looming; he should be back in the lineup sometime in November, maybe December if they’re being cautious. That means that his massive cap hit — which has currently been used to buoy the team’s upper limit until his return — will be removed from the upper limit once he’s healthy again. That means that the $77,695,833 salary that Detroit is currently operating with will have to be altered to fit under a $71 million upper limit once again.

I’ve heard misconceptions before that the longer a player is on LTIR, the lower his cap hit becomes when he returns; when examining how Detroit must operate moving forward, keep in mind that this isn’t the case.

One option is to place both Brad Richards and Johan Franzen on long-term injured reserve until they’re healthy, which buys more time.

Johan Franzen is dealing with post-concussion symptoms again just a few weeks into the season, so it’s reasonable to assume he could be shut down for the year — adding his $3.9 million cap hit to the upper limit in payroll relief.

Brad Richards is also out for an extended period of time with a lower back injury, although the team insists it isn’t serious. While can’t be shut down for the year, he’s already missed six of the team’s 12 games thus far. It’s reasonable to assume he could miss four more, making him eligible for LTIR (which a player may be placed on retroactively to the start of their IR status) and adding another $3 million to the Atlantic Division Club’s upper limit until they can figure out where to trim cost in the lineup.

This doesn’t mean that Detroit won’t need to make a trade. The Red Wings, with the payroll they have right now, won’t be eligible to operate as a fully healthy roster this season — and as the Pittsburgh Penguins found out last year and the Toronto Maple Leafs found out a few years prior, that means anything from playing a man down to pseudo-suspensions for the formerly injured player until the team is cap compliant.

In other words? The Red Wings will likely have to ‘suspend’ either Pavel Datsyuk or Brad Richards until they can find a buyer for one of their players.

The tough part at that point will be determining who must be dealt out — and not only who would be willing to take those players, but what the teams would be willing to give up in return.


The Buyers

The first issue is finding a team (or series of teams) who both have the cap space to take on a chunk of Detroit’s payroll and players they’d be willing to relinquish in return. The Red Wings may very well have to accept draft picks for their players (in a move similar to the Johnny Boychuk deal for the Boston Bruins in the summer of 2014), but they have to find teams that have the space to help them out.

Assuming Detroit needs to unload somewhere between $3 and $6 million in cap space, there are only fourteen teams in the league that have that kind of cap space — and most of them have that much space due to anticipated upcoming pay increases, which rules out unloading too much cap space on each of them. The Arizona Coyotes, New Jersey Devils, and Winnipeg Jets all have significant cap space, but operate on a much tighter budget than the rest of the league — which means that they can’t take on much more than they’re already paying out — and the Nashville Predators and Anaheim Ducks both look to be seeing their payrolls skyrocket next year (which means they’ll need to take either lighter portions of Detroit’s needed relief or one-year deals).

Once Detroit has narrowed down their prospective buyers, they have to determine which players to give up. Names like Brendan Smith, Jakub Kindl, and Kyle Quincey look attractive as pieces the team can afford to give up — but someone like Tomas Tatar or Gustav Nyquist might be what a team holds out for. Detroit isn’t walking into any negotiations with the upper hand, especially if they wait until Datsyuk is healthy — and that’s going to hurt them in the long run.

Arizona, Toronto, or Carolina (just to name a few) seem like great teams to benefit from Detroit’s problem, and they’ll only benefit more the longer Detroit waits. One thing is certain: the Red Wings will need to do something about their cap situation, and they’ll need to do it soon.


All cap figures pulled from GeneralFanager.com. All NHL Salary Cap compliance rules pulled from the 2013 NHL CBA.

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