It’s kind of remarkable that such brilliance came from this 1960s era-looking roundtable, pic via Flyers Twitter
I assume that only a subset of the most hardened OB Flyers fans understand the intricacies of the league’s cap and CBA. So, if you’re not intimately familiar with how it works – I’m not either, and I have to look it up every time the team pulls off some mathematical wizardry to undo the impulsive whims of madmen Ed Snider and Paul Holmgren – here’s a primer on why the draft day trade yesterday was so good. [All numbers are rounded off for ease of understanding… and because I really didn’t feel like being that precise.]
First, the trade
Flyers press release: The Philadelphia Flyers have acquired 5-11, 202 lb C Sam Gagner and a conditional 2016 or 2017 draft pick from the Arizona Coyotes in exchange for D Nicklas Grossmann and the contract of D Chris Pronger, according to general manager Ron Hextall.
How, on Earth, did Hextall manage to trade a guy who hasn’t played in three years, works for the league, and is effectively retired, when Ruben Amaro can’t even figure out how to trade Cole Hamels or Ryan Howard?
That… is a great question. The simple answer would be Hextall is good at his job and Amaro is of questionable intelligence… but there’s more to it than that.
First, it’s important to understand the league’s goofy rules. Pronger has not officially retired because doing so would’ve, obviously, prevented him from getting collecting the ~$19 million he was owed after his career-ending concussion(s). Somewhat incredibly, he’s under contract through 2016-2017. What’s more is that Pronger retiring, while it would’ve saved the Flyers money, would’ve cost them a roughly $5 million cap hit every year. By staying “active,” even though he works for the league(!), Pronger was eligible to not only be placed on long-term injured reserve and collect salary, but also come off the Flyers’ cap at around the start of the season. It was a win-not loss scenario.
But Pronger is owed only ~$1 million over the next two seasons (cap hit remains ~$5 million). The Coyotes, in taking on a small portion of his salary, will not place him on LTIR, so they can count him against their cap because they need to hit cap floor.
So why bother trading Pronger if the Flyers could just place him on LTIR?
Well, there are a few reasons.
Yes, the Flyers could effectively go $5 million over the cap since they placed Pronger on LTIR every year. But getting him off the books completely has many benefits, because while you can go 10% over the roughly $70 million salary cap during the offseason, Pronger’s $5 million cap hit counted against the Flyers’ allotment until either the end of training camp or the start of the regular season, (the two times the Flyers could’ve chosen to place Pronger on LTIR) and limited what the team could do in free agency. The ways to realize the cap upper-limit using LTIR vary, and it’s really not worth going into detail over here, but it’s safe to say that doing so could create many headaches (pun not really intended). Now they can sign free agents without having to pull off all sorts of chicanery to avoid a penalty.
There are other fringe benefits as well, including the ability to prorate in-season acquisitions against the cap, more room in their total contract limit, and just the general ability to not have to find loopholes and spend important(?) brain capital to build a team around a guy on LTIR. In short– it’s better to have actual cap space than LTIR cap space. But yeah, trading Pronger probably helps Phoenix more than the Flyers. Continue reading