The Montreal Canadiens will have plenty of cap space to work with heading into the summer, but there are a few things worth pointing out as we evaluate how much cap space will truly be available, particularly when it comes to Carey Price.
The Habs will have almost $17 million in available funds, but given that Price’s contract is still part of the mix, timing comes into play.
To reach maximum financial manoeuvrability, the Canadiens must place Price’s contract on the long-term injured reserve (LTIR), which comes with its own sets of limitations due to how LTIR is calculated.
Placing a player on LTIR does not remove the salary cap hit from the team’s overall budget. It does, however, allow the team to spend additional funds above the projected $88 million salary cap for 2024-25.
Why is this distinction important?
The relief funds from LTIR are only possible once the team reaches the upper-limit of the salary cap. And once they’re added to the equation, LTIR funds do not accrue as regular salary cap space does during the regular season.
This means the Montreal Canadiens will have to use their regular cap space before heading into LTIR territory, which limits their options to a certain extent.
Carey Price And LTIR
Having Price on LTIR isn’t ideal from a salary cap standpoint.
If the Canadiens had managed to move his contract prior to today, they would be heading into the season with $17 million in cap space that would accrue significant gains throughout the year.
Cap space and expenditures are calculated on a daily basis during the season (186 days). If a team is below the salary cap, their available cap space will increase every day.
An impact of cap increasing by 5.4% instead of prescribed 5%:
— PuckPedia (@PuckPedia) June 11, 2024
For teams under cap, the extra $325K cap space (cap @ $88M vs $88.675M) can fit an additional $1.5M of annual cap hit at trade deadline.
Since cap space accrues, the cap bump can be turned into more deadline space
But seeing as Price’s funds are tied into the LTIR, it’s virtually impossible for the Canadiens to improve their cap space throughout the season. This limits more than just roster building options, it also prevents them from absorbing more expiring contracts at the trade deadline in exchange for draft capital or other important assets.
Carey Price Trade Options
The obvious solution is to trade his contract to a team that wants to save money, navigate a complicated LTI/LTIR situation, or reach the salary cap floor.
Now that the Arizona Coyotes are no longer the designated graveyard for LTIR contracts, it complicates the situation for the Canadiens, as the options will be limited.
And then there’s also the matter of Price’s signing bonuses.
Price is owed $11 million in signing bonuses over the course of the last two seasons of his contract, with the next payment scheduled for July 1 ($5.5 million). Teams are unlikely to want to discuss any manner of trade before his penultimate signing bonus is paid out in a few weeks.
But come July 2, Price will only be owed one final $5.5 million signing bonus the following year, while touching a very reasonable $2 million in salary per season, which means in pure money terms, his contract will cost a team $9.5 million in the next two seasons, rather than $14 million if he were to be moved in June.
This may not seem like much if you’re a rich team like the Montreal Canadiens, but it will surely factor into trade negotiations with teams that don’t necessarily have the financial backing enjoyed by the Habs.
And while there’s no doubt Carey Price will long be remembered as a legendary player in Montreal, moving his contract would definitely make the next two seasons a little easier to navigate from a salary cap standpoint.
