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Explaining The Salary Cap Benefit Of Sending Nic Hague And Nic Roy To The AHL

(Photo Credit: SinBin.vegas Photographer Brandon Andreasen)

Well, it happened again. Following a night in which both Nic Hague and Nic Roy played in a win against Columbus, they were optioned to the AHL. This morning, they were called right back up and one or both may play tonight against Toronto.

Being shuttled back and forth between the AHL and NHL isn’t new for the Nics. It has happened to Roy three times and Hague twice. They are sent down with the idea of eventually bringing them back up and sometimes it all happens within a day or two.

When it happens, you’ll see dopes like the guys at SinBin.vegas tweet something like this…

It’s about cap space we say.

Reminds me of one of my favorite lines in Seinfeld history when Kramer says “they just write it off.” He has no idea what writing it off means or how it helps businesses, but it sounds smart, so he says it.

They are accruing cap space, all the teams are doing it!

But how? Why? Are you sure?

If you nailed down most, they’ll eventually crack like Kramer and say “I don’t know, but they do it.” And the conversation would end there because let’s be honest, does anyone really care how or why it happens?

But, since you are still reading, you must be someone that cares. So, I’m here today to explain it. (After I spent most of my night last night reading through the CBA and having my buddy Hart from PuckPedia.com further explain it to me.)

The NHL has what they call an “upper limit” or a maximum amount of money a team can spend on their team salaries. This is often referred to as the salary cap. The idea behind it is to make it so that no team can go out and buy the best players and pay their way to a dynasty. There’s a crazy calculation to figure out what the cap will be each year, but that’s for another day. This year the upper limit is $81.5 million.

So, every day at 5PM EST, the league takes a look at every roster in the NHL, calculates the total amount of salary they have on their roster and makes sure it’s at or under $81.5 million. But, it’s not always as easy as simple addition. Instead, they use what’s called an “averaged amount” based on the player’s contract and the length of time he’s been on the NHL roster.

If a player makes $1 million and he’s been on the roster for every day of the season, he counts for $1 million against the cap. However, if that player was off the roster at any point, his cap figure comes down. Here, let me show you an example.

The league season is 186 days long. It runs from October 2nd to April 4th. Thus, every player’s salary is calculated over 186 days. To make the numbers round, let’s use a player that makes $1.86 million. Every day of his contract is worth $10,000 against the cap. $10,000*186 = $1.86 million.

Say this player is on the roster on opening night. The league calculates it as if he’s going to be on the roster for the rest of the year, so his cap hit is $1.86 million. If he’s on the roster every day for the next 40, his cap hit never changes, it’s always $1.86 million.

But, if he’s sent to the minors for one day, his cap hit is now reduced by $10,000 ($1.86 million divided by 186). When he comes back his cap hit is now $1.85 million.

Every day he’s not on the NHL roster, his cap hit decreases by $10,000. Send him down for 10, you save $100,000. Send him away for 30, you save $300,000.

Got it? Ok, let’s move away from this mythical player and get back to the Nics, Hague and Roy.

Nic Roy makes $720,000 against the cap. Each day of Roy’s contract is worth $3,871. He has been on the active roster for 20 days meaning he has missed 16. 16 days means $61,935 of savings for the Golden Knights. So, where Roy was worth $720,000 against the cap on October 2nd, today, he’s now only worth $658,065 against the “upper limit.”

Nic Hague makes even more than Roy at $791,667. Each day of Hague’s contract is worth $4,256 against the cap. He has been on the active roster for 27 days meaning he has missed nine. Nine days for Hague means $38,306 of savings for the Golden Knights. So, where Hague was worth $791,667 against the cap on October 2nd, today, he’s now only worth $753,461 against the “upper limit.”

Between the two of them going back and forth, they’ve saved the Golden Knights a total of a little more than $100,000 in cap space savings.

At the moment, that means absolutely nothing because the Golden Knights were below the upper limit when the season started and they are below the upper limit now. Where this comes in handy is if/when the Golden Knights want to add a player at the trade deadline.

Now, remember, the player only counts against your salary cap for the number of days left in the season. This year, the trade deadline occurs with 40 days left in the season. Thus, a player making $5 million only counts for $1,075,269 against the salary cap if acquired on trade deadline day. ($5,000,000/186*40 = $1,075,269)

Shuttling Hague and Roy back and forth has already saved $100,000. By doing some math, that equates to a player making an annual salary of $465,000 if the player is added on the day of the trade deadline. And we’re still only in November so there’s still plenty of time to make that number a lot higher.

The Golden Knights will likely keep doing this over and over again throughout the course of the year, which will continually lower the value of Roy and Hague’s cap hit, and allow them some freedom to make a move at the deadline.

Say they were to trade a player off the current roster making $3.85 million. When you add in the $465,000 they’ve banked from sending the Nics back and forth, they can now add a player worth $4,315,000 if the trade is made on deadline day.

For those of you wondering, Taylor Hall makes $6 million and Alex Pietrangelo makes $6.5 million. No, they aren’t there yet, but they are a heck of a lot closer today than they were on October 2nd. Another 100 combined days of sending the Nics down means another $1.8 million at the deadline or a total of just over $6 million. Catch my drift?

But… there is one major catch in all of this, and that’s the human price being paid by the Nics. Both Roy and Hague are on what is called “two-way” contracts. That means they get paid a different salary when they are in the NHL than they do in the AHL.

Nic Roy
2019-20 AHL Salary – $67,500 ($362.90 per day for 186 days)
2019-20 NHL Salary – $700,000 ($3,763.44 per day for 186 days)

Nic Hague
2019-20 AHL Salary – $70,000 ($376.34 per day for 186 days)
2019-20 NHL Salary – $700,000 ($3,763.44 per day for 186 days)

Thus, every single day that this happens to Roy, it costs him $3,400.54. Every day it happens to Hague costs him $3,387.10.

Yep, that’s right, this maneuvering has cost Nic Roy over $54,000 and Nic Hague more than $30,000 this season.

But, you wanted Taylor Hall, right?

So, there you have it. That’s why the Golden Knights are playing ping pong with their two Nics and why my inbox is flooded with transaction alert emails from VGK.

Of course, this is just one aspect of the salary cap. There are things like performance bonuses, long-term IR, 35+ contracts, emergency recall, and a whole host of other situations that even further complicate it. We’ll let those slide for now, but just know that the Nic-shuttling that’s been going on has a purpose, and even though it sucks for the Nics, there’s a good chance it pays off big time for the Golden Knights come February 24th.

Now that you understand it, “don’t you wish you had the last 10 minutes of your life back?


Huge stick tap to Hart from PuckPedia.com for helping me sort through all the madness that is the NHL salary cap. To see the daily cap hit numbers for the entire Vegas Golden Knights roster, be sure to check out PuckPedia’s VGK page. And, if you want more info, tweet @PuckPedia.

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26 Comments

  1. Betsy Vencius

    Awesome read – so helpful to understand the nuances of the salary cap and the ping ponging of players tween NHL & AHL – worth the 10 minutes for sure — Thanks Ken!!

  2. DOC Williams

    Ken … I asked you to explain this, and boy did you! I and probably most others, had NO IDEA what was going on with these constant moves up, down, up, down. (It was frustrating as hell). Now we know. You have educated us. Thanks, DOC

  3. Seth B

    I don’t know why but I find this stuff interesting. Good to see the workings behind the team. Plus I like seeing people find ways to manipulate the system to better themselves! Good article once again SinBin!

  4. THE hockey GOD

    Anytime you can get Kramer into an article you know you have done a GREAT JOB OF WRITING (about nothing, no, jk)

    “The NHL has what they call an “upper limit” or a maximum amount of money” sounds anti American and socialistic to me with at taint of marxism.

    “So, every day at 5PM EST, the league takes a look at every roster in the NHL, calculates the total amount of salary they have on their roster and makes sure it’s at or under $81.5 million” control freak socialism at work, no wonder their product on ice has gotten worse. Sound eerily familiar to FIVE YEAR plans that commie’s used to implement, only done on a DAILY BASIS !!

    “Shuttling Hague and Roy back and forth … saved $100,000. … equates to an annual salary of $465,000 …plenty of time to make that number a lot higher.” sounds like a lot of unproductive gyrations, typical of socialism.

    BTW do the players actually “shuttle” or do they travel with the team during this times of maneuvering to avoid , what ever they are gaining here ??

    “Yep, that’s right, this maneuvering has cost Nic Roy over $54,000 and Nic Hague more than $30,000 this season.” socialism does not want the individual to make a lot of money, it ties to set every one’s earning the same (except of course if you are the person running the show) , it really hurts the individual workers ability to get a ahead.

    ok i am off my political soapbox, I really wish the product on the ice would improve. NHL hockey is almost unbearable to watch, compared to decade(s) ago. The officiating absolutely sucks. The game lags behind in technology that could be implemented to improve the quality of product on ice. Right now too many officials on ice cluttering it up making poor decisions nearly every other game.
    OK NOW I am off my soapbox.

    • Joe B

      Thank goodness……

    • Jerry

      It’s called an antitrust exemption. You must be new to pro sports. Welcome.

      • THE hockey GOD

        it’s called Supreme Court refuses “to hear the case” (anti trust exemption in MLB).

        When someone is penalized for being successful, that is down right Anti American.

        When someone (e.g. Roy and Hague ) is penalized in their pocket book, that is theft and down right anti American. Reeks of socialism.

        The VGK did all the right things, built a great team, then it got disassembled due to the “salary cap”. It’s BS. The product on ice has steadily gone downhill. Compare the games the VGK played in season 1 to what you see now on the ice, anyone with a brain can see it’s far , far , far from even close.

        Deal with it.

        • Happy commie

          Well, I guess this guy took up the mantle from the other MAGA chud who posted here often..hockey does NOT equal politics. That only happens in your mind. If VGK is playing by the rules (they are) and taking advantage of it (they are), how is that not capitalism? Is it because they refuse to release tax statements (they don’t)? Is it a refusal to comply with the league (nope)? Keep your BS on breitbart

          • THE hockey GOD

            ok you are a commie and socialist, got it.
            You are anti American, got it.
            You like hard working people (like Roy and Hague) to get the shaft, got it.
            You don’t want to make things great, got it.

            My post has nothing to do with MAGA, take your spin and twist elsewhere, you can’t counter what I am saying so you spin out complete.

            Anti socialism and anti Communism started WELL before MAGA

            When anyone, including sports/hockey, embraces FAILED policies you see these gross inequities emerge, and the whole sport suffers. It is pretty clear from the product the NHL puts on the ice progressively getting worse year after year after year. Bettman is a failure also, but that is another subject matter.

            When the new expansion team enters the league the product is going to get even more diluted.

    • Sherrell Byrd III

      You can’t be serious. Comparing the NHL to communism and socialism? I guess you missed the sentence that it keeps teams from buying all of the good players. I think the product on the ice is exciting. They just need to figure out what goalie interference is.

  5. Pierre Martin

    Do they get exposed to waivers during these “transfers” or were they only exposed once? Thanks for another good article

  6. Best 10 minutes spent in VGK education and it cost nothing against their Salary Cap!!! Thanks, Ken☘

  7. Eric

    As Tommy Boy would say, “that was awesome”. I had no idea what was going on with the up and down with the Nics. That was a great explanation and I cannot wait to be able to sound smart next time I get into a conversation with someone about this. Thanks!!!

  8. Vgk2018

    Interesting choice of $3.85m in your example!

  9. Adrian

    One question that i still have is even though they are “sent” to the AHL (on paper) for the purposes to save money and simply be recalled a day or two later, are they actually physically sent to Chicago only to fly right back? Or do they just hang in Vegas until they are recalled back to NHL?

  10. Bill

    Do Ir players count against the cap? If not wouldn’t the Eakin, tuch and Schmidt have cleared quite a bit of cap anyway?

    • In short, no it doesn’t help the cap at all.

      The longer answer is very complicated in that there is a way teams can go over the “upper limit” by using LTIR, but hopefully VGK doesn’t have to worry about that.

    • In short, no it doesn’t help the cap at all.

      The longer answer is very complicated in that there is a way teams can go over the “upper limit” by using LTIR, but hopefully VGK doesn’t have to worry about that.

      • Bill

        Not wishing anyone hurt but if Reaves got hurt and we could get rid of his cap space for a player similar to Haula I think that would be a win.

  11. Jerry

    But I thought VGK didn’t understand the cap?

  12. Mike

    Ken, in your pre-season interview with the Creator, he alluded somewhat cryptically to finding a way to create cap space in order to possibly add pieces later in the season. Is this what he was getting at? Great article.

  13. bob

    Thanks for the clear and detailed explanation, Ken. Working through the numbers (and I realize that it gets complicated because other players, such as Bischoff and Sparks, are moving up and down, as well, I see that they pace they are setting may not quite get them to where they could sign a marquee player if they cleared the additional $3.85m.

    Though, if for example, they found they would not be able to reach an agreement for $ and term for an agreement with another UFA making $2.2m and could also move that player at the deadline, then they would seem to be in a very good position for signing a player of the calibre about which you are talking, even if they are commanding more than what they now make (if they felt they could afford to jettison those players for the rest of the season). Moving that additional player may make sense if they can land a marquee defenseman.

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