What is “long-term injured reserve?” What is an “entry-level contract?” Who needs to go through waivers? And, heck, what are waivers and what purpose do they serve in the first place?
I have found that the rules relating to NHL contracts, rosters, and the salary cap are opaque not only to ardent fans but those that cover the league professionally. Why?
Sometimes it is because the governing rule is unique to the NHL. For example, are performance incentives allowed in player contracts? If you’re in the MLB and NFL: yes. If you’re in the NHL: in most circumstances, no.
Sometimes it is because the rule is obscure in the Collective Bargaining Agreement (“CBA”). For example, if a team loses a player on waivers while attempting to get him to the AHL, but then the claiming team waives him and the original team claims him back, does the original team have to put that player on waivers yet again to get him to the AHL? Depends on if you are the only team claiming him the second time around.
And sometimes it is because the specific governing rule is not actually spelled out in the CBA and can be inferred only in its absence or from cobbling together separate provisions. For example, if a team’s player is suspended, the team gets relief in the form of an extra roster spot to replace that player, right? Actually, no. But that never shows up in black and white. It just is not mentioned as an exception to the 23-man roster limit. (As it happens, this is another rule starkly different from the rule in the NFL, MLB, or NBA.) This is why Jamie Oleksiak was not replaced when he was recently suspended three games for elbowing Washington’s Alex Alexeyev.
So, I figured I would take on a couple of the off-ice questions—questions that relate to two pieces of overnight Kraken news: Shane Wright’s re-assignment back to his junior team and Matty Beniers’s All-Star designation.
If you have any questions you would like to see addressed in future posts, feel free to reach out on twitter (@deepseahockey or @sound_hockey) or in the comments below.
Why haven’t the Kraken placed Chris Driedger or Joonas Donskoi on long-term injured reserve? (And what does it have to do with Matty Beniers being named an All-Star?)
The short answer to the long-term injured reserve (LTIR) question is there has been no reason compelling them to use it, except briefly with Philipp Grubauer earlier this season. The longer answer has to do with multi-season cap management. You may have heard someone say, when considering a player acquisition, “the Kraken don’t want to go into LTIR.” Why? And what does it have to do with Matty Beniers and him being named to the all-star team? Let’s dive in.
A team may place a player on “injured reserve” if the player is reasonably expected to be out of the lineup for seven calendar days due to an injury or illness. Once a player is placed on injured reserve the team obtains an exemption for the player from the 23-man roster limit and, therefore, can replace the unavailable player. Both Chris Driedger and Joonas Donskoi are on injured reserve currently.
“Long-term injured reserve”—a moniker not actually used in the CBA—is different. It is a designation that a team can use on a player when a physician determines the player has an injury or illness that will keep him out of the lineup for at least 10 games and 24 calendar days. In addition to the roster relief afforded by any “injured reserve” designation, when a team designates a player for LTIR, the team is replace the injured player(s) with one or more players of the same aggregate cap hit of the injured player(s), even if this means that the team exceeds the salary cap in doing so.
So, if the Seattle Kraken placed Chris Driedger on LTIR, the team could bring in a player with an identical $3.5 million cap hit and exceed the salary cap in doing so. The same is true for Joonas Donskoi and his $3.9 million cap hit. So, in theory, the Kraken could go out at the NHL Trade Deadline and add a contract or contracts worth $7.4 million in cap dollars and still be compliant. This additional space for injury replacements sometimes referred to as a team’s “LTIR pool.”
Sounds pretty good, right? You could fit in a pretty good player with that amount of additional cap room. Recently waived Jakub Vrana is an example. Likely-to-be-traded Bo Horvat is another one.
So, why haven’t the Kraken utilized this flexibility afforded by LTIR? I see three reasons. First, and most significantly, it is probable the Kraken have not seen an opportunity that justifies doing it. Presume Bruins GM Don Sweeney called Kraken GM Ron Francis tomorrow and offered him F David Pastrnak (and his $6.67 million AAV contract) for a seventh-round draft pick, but only if Francis answered “yes” on the spot without making other trades first. In that outlandish hypothetical, you could bet Francis would say “yes,” use the LTIR flexibility, explain the extra cash commitment to ownership, and figure everything else out later.
But, unrealistic scenarios aside, the Kraken have been able to put their preferred, full team on the ice so far this season. With one brief exception earlier in the year, there has not been any reason for the team to use the salary cap relief afforded by LTIR. And without the need for the cap relief, there is no reason to designate a player for LTIR as opposed to a standard “injured reserve” designation.
The second reason to avoid a big-money acquisition to fill in for the injured players is that the cap relief does not last for the remainder of the season—it lasts only as long as the player’s injury does. Chris Driedger, for example, is likely to return late this season. Joonas Donskoi’s status is less clear, but it is hypothetically possible he could return at some point as well.
Sticking with Driedger, the team would need to be cap compliant when he and his $3.5 million cap hit returns. To do that the team would either need to waive a player it knows another team would claim—therefore subtracting the player’s entire remaining cap hit—or waive a series of players to stash them in the AHL and get portions of their salaries off the books. Teams can get themselves in real trouble in these scenarios and leave themselves shorthanded.
Matty Beniers waits for a face-off. (Photo/Brian Liesse)
The third reason is Matty Beniers’s contract. Huh? Let me explain. Every player’s first NHL contract is a so-called “entry-level contract” (ELC). Under the CBA and the subsequent 2020 Memorandum of Understanding (“MOU”), an entry-level contract is limited to a maximum amount of base compensation. For players drafted in 2021 (Beniers’s draft year), annual compensation is limited to $925,000 at most. For players drafted in 2022 (Shane Wright’s draft year), annual compensation is limited to $950,000.
But there is an important asterisk on this limit. Recall that I said performance bonuses are not now allowed in “most circumstances.” Entry-level contracts are one of three scenarios where performance bonuses are allowed. And Beniers’s contract has bonuses that, according to Cap Friendly, are worth up to $925,000 for 2022-23. (Shane Wright’s contract has bonuses too, but I doubt those are likely to be relevant.)
Under the CBA and MOU, for players drafted in 2021 (Beniers’s draft year), any ELC bonuses up $850,000 are so-called “Schedule A” bonuses. Bonuses above that threshold are “Schedule B” bonuses. So, Beniers has $850,000 in Schedule A bonuses and $75,000 in Schedule B bonuses.
“Schedule A” bonuses reward Beniers (a forward) with a bonus of a specified amount if he achieves any of the following thresholds (up to a maximum of four separate thresholds achieved):
- 20 goals
- 35 assists
- 60 points
- Top six in time on ice among forwards (in total and/or per game) on team (minimum 42 games)
- Top three in +/- among forwards on team (minimum 42 games)
- 0.73 points per game (minimum 42 games)
- End-of-Season All-Rookie Team
- All-Star Selection
- All-Star MVP
In other words, even if Beniers achieves all nine thresholds this season, he still would only receive four of the bonuses. I will presume (but do not know) that these bonuses are split evenly in his contract so that each threshold met would pay Beniers a bonus of $212,500. If he achieves the maximum four bonueses, he gets the full $850,000.
As it stands today, Beniers is projecting to eclipse five of these categories, with a sixth (End-of-Season All-Rookie Team) seeming likely.
- 20 goals ✅
- 35 assists ❌ (currently on a 34-assist pace)
- 60 points ✅
- Top six in TOI among F (in total and/or per game) on team (min 42 games) ✅
- Top three in +/- among F on team (min 42 games) ❌
- 0.73 points per game (min 42 games) ✅
- End-of-Season All-Rookie Team❓
- All-Star Selection ✅
- All-Star MVP❓
All of this means the Kraken currently project to pay Beniers an additional $850,000 at the end of the year in Schedule A bonsues.
“Schedule B” bonuses may be awarded to the player if he achieves one or more of the following league-level thresholds:
- For forwards: Top ten in NHL in goals, assists, points, or points per game (min 42 GP) among forwards
- Win any of the following trophies: Hart, Selke, Richard, Conn Smythe, Norris, Lady Bing, Calder.
- Year-end 1st or 2nd team All-Star
Of particular relevance, note that players are eligible to receive a bonus if they finish in the top-3 of Calder voting under the CBA. We know that Beniers can earn up to $75,000 in Schedule B bonuses this year, but we do know the the negotiated amounts he can earn for any specific accomplishment. For today’s purposes, I will presume Beniers accomplishing any one of the foregoing (including top-3 in Calder voting) would earn him the $75,000 Schedule B bonus. Since a top-3 Calder finish seems likely, I will project that Beniers earns this sum too.
The total ($925,000) is not currently accounted for on the team’s salary cap. (Getting really technical, the bonuses do count, but the cap is increased accordingly by a so-called “bonus cushion.” This is relevant only if the team has large bonuses on its books. For our purposes today, easiest to think about it as not on the cap, particularly since publicly reported cap figures, such as the number from CapFriendly, do not include it.)
If the team pays the bonus, though, it hits the cap. The accounting would then happen in one of two ways. The amount either (a) comes out of the team’s available year-end cap space, or (b) if the team does not have enough year-end cap space, any surplus comes off the team’s salary cap space in the next season. So, if Beniers earns his full $925,000 bonus, but the team ends with just $800,000 in cap space, the team’s 2023-24 cap would be reduced by $125,000.
According to CapFriendly, as of today, the Kraken project to have $1,167,181 in cap space at the end of the year. This is based on the daily salary accruals to date and the daily accruals moving forward of the players currently on the roster. That’s just enough to pay Beniers’s bonuses, with extra wiggle room for some temporary AHL call ups.
OK, but what does any of this have to do with LTIR? Well, unused cap space is accrued on a daily basis. If the team goes into LTIR, by definition it is going over the cap and is not accruing any unused cap space. (Unused “LTIR pool” space does not accrue; it disappears when and if unused.)
So, if the Kraken spent the majority or all of the season using LTIR for extra salary space, the team would end the year at or near zero dollars in unused cap space. If (and when) Beniers then earns incentives, that money would come off the Kraken’s cap for next year. The team surely views itself on an upward trajectory and is likely loath to sacrifice cap space next year to benefit this year’s team.
In sum, why hasn’t Seattle used the cap relief afforded by LTIR? Like I said, there has been no cause to do it. And also—in a roundabout way—it is because of Matty Beniers.
Did the contractual implications of keeping Shane Wright factor into sending him back to the OHL?
The morning after scoring a goal en route to winning the World Junior Championship (on his his birthday), the Kraken announced that Shane Wright would be returned to his junior team, the Kingston Frontenacs. Did his contract factor into this decision? Let’s dive in.
If you’ve paid attention to Shane Wright’s status with the Seattle Kraken this year, you have likely heard about two somewhat obscure NHL rules. The first arises from the NHL-CHL Transfer Agreement. This agreement allows 18- or 19-year-old CHL players to leave their junior teams to play in the NHL, but restricts those CHL players from leaving and subsequently being loaned from their NHL club to a minor-league team. This means Shane Wright cannot leave his junior team to play with the Coachella Valley Firebirds this season. (As we have seen, a two-week conditioning assignment in the AHL is a one-time exception to this rule.) Honestly, this probably would be the ideal situation for Wright, but it was simply not on the table.
Second, you have also likely heard that 10 games played in the NHL is an important threshold to make a decision on whether or not Wright should be returned to his junior team. There is actually no “deadline” to return Wright to the CHL under the NHL-CHL Transfer Agreement. He could play 60 games and be returned (in theory).
The 10-game threshold has to do with Wright’s entry-level contract under the CBA. Wright can play up to nine games in the NHL without using the first year of his three-year entry-level deal. If he plays fewer than 10 games, the three-year deal simply “slides” to the next season. In other words, instead of extending through 2024-25, Wright’s contract would keep him under contract through 2025-26. For both the team and the player, this is significant because, as mentioned above, entry-level contracts are limited in total compensation. After that contract expires, the team and the player are left to negotiate a new deal in restricted free agency, and the player can earn more.
Wright had played in eight games. In theory, the Kraken could have put him into one more game before “burning” a year on his entry-level contract. Obviously, they did not do that, opting instead for the clean transition after the World Junior Championship.
Shane Wright playing in a game for the Seattle Kraken. (Photo/Brian Liesse)
Equally important, and less frequently discussed, is the threshold of 40 games on the active roster. If Wright had been on Seattle’s 23-man roster for 40 games this season, the season would count as an “accrued” season toward unrestricted free agency under the CBA. An NHL player becomes an unrestricted free agent with the expiration of a contract after the player is 27 years old or has accrued seven seasons of service, whichever comes sooner.
For many players, this means they reach unrestricted free agency at or after the player is 27 years old. But, for some players who break into the NHL at a young age, there is the chance to reach free agency sooner. Wright could have been in this category if he got credit for an accrued season as an 18-year-old (or next year, as a 19-year-old, for that matter).
Counting the Kraken games while Wright was on his conditioning assignment but not the games during his loan to Team Canada at the World Junior Championship, Wright had been on Seattle’s active roster for 25 games. This left an additional 14 games after Wright’s return before the season would count as an “accrued” season. This was an additional deadline I was watching had Wright stayed with Seattle after the World Junior Championship but his development stagnated.
So, was any of this decisive of Wright’s status after the World Junior Championship? I do not think so. The paramount concern for the Kraken is Wright’s on-ice development. Whether that meant keeping the player with the Kraken or sending him back to his junior team, the CBA rules did not outweigh the on ice considerations. Contract issues become relevant only in the truly marginal case.
Personally, I was starting to lean toward returning Wright to his junior team. After watching him at the NHL level and at the World Junior Championship I did not see a clear path to Wright being a markedly superior player to those already in Seattle’s bottom-six by the end of the year. I don’t fault the Kraken for evaluating him for as long as possible. But, given the state of the NHL roster, I wanted to see Wright get 40-to-50 more junior games and then check in on him next camp. I suppose ideally this would happen with a good CHL team primed for a playoff push. There are some rumblings that could happen.
The Kraken appear to have reached the same conclusion. It has an incidental long-term contractual benefit for the team, but I do not think that was the primary factor.
[Author’s Note: The analysis of Beniers’s bonuses was corrected to account for the fact that Schedule A bonuses are capped at $850,000 for 2021 draftees. Only draftees from 2022 or later, including Shane Wright, may earn up to $1,000,000 in Schedule A bonuses, as this post originally indicated.]
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Great stuff here, five stars for the article! Two contract questions after reading this:
(1) Is Beniers the only Kraken with significant bonuses that need to be factored into this year vs. next year cap space concerns? If so, does that mean that these sorts of bonuses are more common with entry level contracts for high draft picks than for established players who don’t have the same sorts of restrictions on compensation in their contracts?
(2) If I’m reading the article correctly, my understanding is that next year is the last year on Beniers’s entry level contract. For those of us (i.e., all Kraken fans) that want him to be here long term, when is the earliest we could expect a new longer-term contract to be announced? If Beniers were willing, could that be done now or does the CBA stop this deal from being negotiated until some prescribed time?
Two great questions and probably fodder for the next post. The short answer to your first question is “Yes.” Beniers is the only player on the team (now that Wright has been returned) with team-paid incentives. I can dive into why that is a little more in a longer post. On your second question, multi-year contracts can only be extended in the last year of the deal. So the window for an extension opens with the start of the new league year. (Should be July sometime. Not sure if the dates have been announced. I’ll look into it.)
Bonuses are only allowed in three circumstances: (1) Players on entry-level contracts, (2) Players who have signed a one-year contract and are over 35 years old, and (3) Players who have signed a one-year contract after returning from a long-term injury (have played 400 or more games, and spent 100 or more days on the Injured Reserve in the last year of their most recent contract). Of these three circumstance, the Kraken only have players with entry-level contracts, and of those players Beniers is the only one who is a regular NHL player. So yes, Beniers is the only Kraken player who will receive a bonus this year.
The soonest that a player can sign a contract extension is when that player is in his final year of the contract. Contracts renew or expire on July 1st, so the soonest that Beniers could re-sign is July 1st of this year.
What are the Kraken likely going to do when Driedger returns from injury? I see that they can fit his cap # on the roster because it’s currently being counted, but do you think they plan on carrying 3 goalies? I wouldn’t think they would move Jones while deep in a playoff hunt, and Gru seems unmoveable. I also doubt that teams would offer much for Driedger without seeing him in action this year post injury. They have had good injury luck, so is the thought that they’ll just scratch the extra forward, Fleury and Driedger now that the Wright spot has been cleared?