Every now and then we get commenters asking what sounds like a simple question with what should have a simple answer.
“How much cap space do the Penguins have?”
Really, outside the start of the season, there just isn’t one single, simple answer for that, and it’s because of how the NHL’s salary cap is calculated.
First, cap hits are prorated based on how many days a player is actually on the roster. If a player is only on the roster for a portion of the season, then only a portion of their cap hit counts toward the cap. For example, if a player who makes $1M is on the roster for exactly half the days of the regular season, then only $500,000 counts toward that final figure at the end.
Second, any unused cap space on a day-to-day basis essentially rolls over. If a team is operating below the cap to start, that space isn’t wasted, and is banked for later in the season, as long as a team isn’t utilizing LTIR relief. If a team opens the season far under the cap like the Penguins did, that space becomes much bigger and more powerful as the March 6 trade deadline approaches — they gain more space because of the unused space rolling over, and the prorated cap costs for incoming players would also grow lower because they would be on the roster for less time.
The Penguins are comfortably in playoff position, at second place in the Metropolitan Division. There’s no rush to make a move just yet, and the longer they wait to make a move only increases the space they have.
With all of that in mind, the answer to “How much cap space do the Penguins have?” has several answers depending on if you’re talking about straight money at the end of the season, what kind of cap hits they can afford to take on right now, what kind of cap hits they can afford to take on at the trade deadline, and what kind of space they’d have for a playoff roster.
PuckPedia is one of the sites that tracks daily cap hits based on moves from the course of a season, allowing one to answer those above questions with a pretty good degree of accuracy.
How much cap space — actual dollars — are the Penguins projected to finish the season with? Roughly $11 million shy of the cap’s upper limit of $95.5 million. But at this point in the season, that’s not representative of what the Penguins are actually able to do.
If the Penguins were to make moves today, since any acquired players would have prorated caps, they could afford to bring in roughly $28 million in actual cap hits. Why? Because it’s already 117 days into a 191-day season. There’s roughly 39% of the season left to go, so only 39% of a new player’s cap hit would actually count toward the Penguins’ own final figure. So as more days pass and less time remains in the season, the prorated cap hits would get smaller and the cap hits the Penguins can take on get bigger.
But the Penguins also aren’t using long-term injured reserve, so they continue to bank cap space, too. So, what happens if they don’t make any moves between now and the deadline. With the banked cap space, how much in prorated cap hit can they take on? Just north of $50 million.
Does that mean that the Penguins can go out on deadline day and add $50 million in actual active players’ contracts? Not quite. A new rule for this season introduces a playoff cap hit, which requires every actual 20-player in-game roster to have cap hits that add up to below the $95.5 million ceiling. So while the Penguins are on pace to be able to add up to $50 million worth of cap hits on deadline day, the 20 players dressed for Game 1 of the playoffs would have to be playoff cap-compliant — which still provides them some more leeway than during the regular season, since it only covers the players actually dressed and not the full 23-man roster limit that exists before the trade deadline.
What does that all mean?
The Penguins can afford to do a number of things leading up to the deadline that could bolster the current roster and the future. They’ll have ample cap room to add active players to the current roster in trades, but they really can’t use all $50 million, given that not everyone would be able to dress in the playoffs.
That doesn’t mean that the extra space would just be wasted, though. The Penguins have enough projected deadline day space that they could also afford to be the middle man in a three-team trade, and acquire some picks and prospects in exchange for helping other teams out. Starting this season, the NHL banned double-retained trades within a set timeframe, meaning that if one team trades a player to a team with retained salary, he can’t then immediately be moved to a third team with salary retained a second time. But there’s no rule against only the middle team retaining salary. So, if two other teams want to make a deal but cap space is an issue, the Penguins could afford to play middle man and take on a little bit of dead cap for this season only, and be compensated in futures for their help.
The Penguins have been sitting on cap space all season, and the team on the ice has managed to get into a playoff position anyway. The patience the Penguins have had to not make any major moves could really benefit them for the March 6 trade deadline, as their banked space will put them in a position to add roster players with room left over to leverage for future assets.