From Loophole to Lockdown: The Evolution of LTIR Cap Relief in the NHL

The salary cap has shaped professional sports since its debut in the NBA during the 1984-1985 season, with other leagues like the NFL and the NHL following suit.[1] However, no league’s cap has had as profound an impact on competitive balance as the NHL’s, primarily because of how low it is relative to the market value of the players and the size of the team. One of the more complex mechanisms that has emerged under the hard cap system is the use of Long-Term Injury Reserve (“LTIR”), which teams have used strategically to navigate, and at times to circumvent, cap restrictions.

LTIR AS A CAP STRATEGY TOOL

LTIR is a roster designation tool used in the NHL when a player is expected to miss an extended period of time – typically 10 games and 24 days – due to an injury or an illness.[2] When a player is placed on LTIR, their team is permitted to exceed the salary cap by up to the amount of that player’s salary as it counts against the cap. Practically, it provides cap flexibility by allowing the team to exceed the cap temporarily in order to replace the injured player.

The rule was originally designed to provide relief – and a modest boost – to teams dealing with long-term injuries to their players in order to field a competitive lineup. However, recently it has evolved into a strategic cap management tool. Because the salary cap does not apply during the playoffs, teams have exploited LTIR by stockpiling talent at the deadline while keeping high-salary stars sidelined until the postseason. This allows them to acquire additional players at the trade deadline with the additional cap space that was freed up and to activate the players that were on LTIR once the playoffs begin – when the cap no longer applies – effectively fielding a roster that exceeds the regular season cap without incurring any penalties.

THE ORIGINAL FRAMEWORK

LTIR was first introduced in the 2005 Collective Bargaining Agreement (“2005 CBA”), but by the late 2000s, teams had begun to exploit it by “stashing” high-salary contracts on LTIR to sidestep any cap charges.[3] While the core formula and structure remained intact in the 2013 Collective Bargaining Agreement (“2013 CBA”), several important safeguards were added. These included: (i) a “bona fide injury” requirement, with language explicitly stating what LTIR was not intended to do and (ii) stronger audit and oversight mechanisms on the part of the League.

Article 50.10(d) of the 2013 CBA was intended to offer temporary salary cap relief to teams when a player suffered a long-term injury or illness. Though it laid out a straightforward formula, it also opened the door to strategic cap management opportunities. Teams began refining the timing and structure of the LTIR designation to their advantage. A common tactic – central to this article – involves teams operating as close as possible to the salary cap ceiling before placing a player on LTIR, thereby maximizing usable cap space and their present-day roster strength. This strategy (which is completely legal under the 2013 CBA) is typically reserved for situations where a player is expected to miss the rest of the regular season and return just in time for the playoffs (sound familiar?).

STRATEGIC EXPLOITATION ERA

As the league’s financial landscape flattened during the pandemic, these tactics became more visible and more polarizing. In recent years, a few Stanley Cup-winning teams have turned LTIR into their not-so-secret weapon – stashing stars on the sidelines during the regular season, only to have them reappear just in time for the playoffs. Consider the cases of Nikita Kucherov (Tampa Bay Lightning, 2021), Mark Stone (Vegas Golden Knights, 2023) and Matthew Tkachuk (Florida Panthers, 2025). Each of them carried a cap hit north of 11% in their championship year, missed a stretch of the regular season on LTIR and then popped back in for game 1 of the playoffs.[4] These cases exemplify how teams have used LTIR not just for injury relief but as a calculated strategy to navigate the hard salary cap. While entirely legal, this tactic has fueled debate over the integrity and parity that the salary cap was designed to uphold.

THE 2025 FIX – NEW LTIR LIMITS

In response to the widespread criticism and perceived manipulation of LTIR, the 2025 Memorandum of Understanding (“2025 MOU”) introduced a series of reforms aimed at curbing strategic abuses – particularly in the postseason. The changes can be summarized in three key parts.

Firstly, LTIR relief during the regular season is no longer based on the injured player’s full cap fit (AAV), but rather on the league’s average salary from the prior year. In the case of Nikita Kucherov and the Tampa Bay Lightning in 2021 – despite his AAV being $9.5M, they would have only be able to utilize LTIR relief up to the 2020 league average salary of $3.5M (the “Kucherov Case”).

Secondly, if a team wants relief beyond the league’s average salary threshold, the injured player must be formally designated as a season-ending LTIR case, meaning the player in question is out for the remainder of the season and the playoffs. Using the Kucherov Case above, Tampa Bay could have received the full $9.5M in cap relief if Nikita Kucherov missed the entirety of the playoffs.

Thirdly (and perhaps most significantly), the playoff loophole has been effectively closed through postseason cap compliance. Teams are now required to submit a “playoff salary cap snapshot” and any player returning from LTIR must now fit under a newly enforced postseason cap – effectively extending the regular season salary cap into the playoffs. Therefore, teams can no longer sneak a player into their playoff roster without manipulating their roster. Using the Kucherov Case again, the Tampa Bay Lightning were operating right at the cap in light of having Nikita Kucherov on LTIR. In order to activate him, they would have had to clear $9.5M of cap space – for example, by scratching Tyler Johnson ($5M) and either Alex Killorn ($4.45M), a top-six forward and PP1 contributor (along with burying or waiving a depth piece to squeeze out the remaining $50K) or Yanni Gourde (~$5.2M), the team’s shutdown center.[5]

IMPLICATIONS FOR TEAM STRATEGY

The 2025 MOU fundamentally alters how teams construct their rosters. With the playoffs no longer operating like the wild west when it comes to LTIR, the trade deadline could lose some of its drama – teams have far less incentive to stash high-salary players while adding other expensive talent for a playoff run. This shift also impacts decisions around LTIR activations: clubs must now think carefully about when (or if) to bring a player back and whether a trade deadline acquisition might need to sit out during the playoffs to accommodate a star return. Front offices will need to place a heavier focus on pre-season financial modeling since the new mid-season LTIR manipulation rules leaves less room to course-correct mid-season. Expect to see an even greater reliance on entry-level and other low-cost contracts down the stretch (and in the playoffs), more frequent use of AHL assignments to partially bury contracts, and an uptick of two-way deals for depth players – all to keep the roster cap-compliant.

WHAT COMES NEXT

The NHL’s LTIR reforms aren’t about punishing injured players – they’re about preserving the competitive aspect of the game by closing the loopholes between cap compliance and manipulation. Since its inception in the 2005 CBA, LTIR has shifted from being an unlimited credit card to a more calculated and restricted tool. While the current system isn’t perfect, it addresses a long-standing issue and forces front offices to plan more carefully. Future CBAs might go even further by introducing other safeguards and improvements like: (i) limiting cap relief to the number of games actually missed (as opposed to the entire salary coming off the books), (ii) requiring neutral doctors to verify injuries and re-certify after a set time (as opposed to team doctors who may have some implicit bias), or (iii) enforcing a rolling average playoff cap to better reflect a team’s true regular-season roster (as opposed to the new strict playoff salary cap screenshot).

Whether those reforms gain traction or not, one thing is certain: cap space is no longer something teams can hide behind a curtain – it’s now front and center in shaping championship rosters.

This article was prepared on behalf of the Sports Lawyers Association (SLA) Hockey Subcommittee, which is dedicated to producing timely and thoughtful content that explores the legal and business issues shaping the game of hockey. As part of the SLA’s broader mission to promote the understanding and ethical practice of sports law, the Hockey Subcommittee aims to educate and engage the sports legal community through analysis focused on the unique challenges and developments within the sport.