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The Salary Cap Loophole That Won Vegas The Stanley Cup

  • Writer: Juhi Patel
    Juhi Patel
  • Mar 6
  • 8 min read

 

The National Hockey League (“NHL”) and the salary cap have had a turbulent relationship since the league’s decision to implement a hard salary cap which led to the 2004-05 season lockout.[2] Since its enactment in 2005, the upper limit has more than doubled, from $39 million to the current $83.5 million limit.[3] Unlike other leagues with a salary cap, the NHL’s cap is considered the strictest due to a hard upper and lower limit. This limit is reinforced by the regulations laid out in the league’s collective bargaining agreement (“CBA”) with the players association… until a team reaches playoffs.

 

Chicago Finds the Loophole

 

In 2015, Chicago Blackhawks’ star winger, Patrick Kane, broke his collarbone just a week before the trade deadline.[4] While he quickly underwent surgery to repair it, the team physician announced Kane would be out for about 12 weeks.[5] As a result, Kane and his $6.3 million cap hit went on long-term injury reserve (“LTIR”). At the trade deadline the Blackhawks responded to the loss of Kane by adding Kimmo Timonen, Antoine Vermette, and Andrew Desjardins to their roster.[6] However, Kane didn’t sit out for the full 12 weeks, but instead made an unexpected comeback for the first game of the playoffs before going on to win his third Stanley Cup.[7]


Chicago found the loophole: there is no salary cap during playoffs.[8] The Blackhawks exceeded the salary cap by $5 million at the time of their championship victory. They strategically used Kane’s injury to their advantage by acquiring additional depth players prior to the trade deadline, but reaped the benefits of Kane's early return.[9] As the rules currently stand, the salary cap disappears as soon as the regular season ends. In response to Chicago’s exploitation of this loophole, the Tampa Bay Lightning proposed a vote to change the salary cap rules.[10] When propositioned to the league, no other team supported the initiative.[11]


 

In an ironic turn of events, the Lightning placed their top goal-scorer, Nikita Kucherov, on long-term injury reserve prior to the start of the 2019-20 season to free up $9.5 million in cap space.[12] Kucherov underwent a procedure in December to repair a torn labrum and was back skating in mid-March.[13] However, he did not play a single regular season game during the 2020-21 season.[14] Despite this, Kucherov returned for Game 1 of the playoffs, where he went on to record 32 points in 23 games to win his second Stanley Cup.[15] While there is precedent for the five-month recovery period, when comparing players who underwent similar surgeries by the same physician, Kucherov embraced the rumors regarding the suspicious timing of his recovery.[16] Kucherov himself posted photos of him and friends wearing shirts reading “18M over the cap” while holding both the Stanley Cup and Lombardi Trophy.[17]

 

Vegas Enters the Conversation

 

Following the Blackhawks and Lightning Stanley Cup wins, fans have grown increasingly cynical when players are placed on LTIR just prior to the trade deadline. While the NHL warned trades involving injured players would be “closely scrutinized,” they clarified their purpose was looking into transactions with teams acquired players they had no intention of playing.[18]


In 2023, Mark Stone, captain of the Las Vegas Golden Knights, was placed on LTIR in January.[19] He quickly started rehab and underwent his second back surgery, one of several procedures he faced in less than one year.[20] However, he was back on the ice for Game 1 of the playoffs leading the Golden Knights to the franchise’s first Stanley Cup victory.[21] He and three newly acquired teammates, Ivan Barbashev, Teddy Blueger, and Jonathan Quick, who were traded to the Golden Knights while Stone’s salary sat in LTIR, were critical to the team’s championship victory.[22]

 

The NHL investigated the Golden Knights and asked for medical reports regarding Stone’s injury timing and recovery to ensure their use of LTIR was proper.[23] In 2024, Stone was once again placed on the LTIR leading up to the trade deadline.[24] As a result, the Golden Knights acquired Noah Hanifin, Anthony Mantha, and Tomas Hertl.[25] The three players’ salaries add $10.8 million to the team’s roster while Stone's $9.5 million salary was excused while he was placed on LTIR.[26] This loophole begs the question of what draws the line between a legitimate injury with good timing and a prolonged recovery pushed into the playoff period?

 

How CBA Negotiations Will Come into Play

 

General managers across the NHL once again brought up the topic of weaponizing LTIR in 2024, but the league halted discussions on the matter until the next CBA.[27] Now that the 2026 CBA negotiations have begun, this loophole is sure to be an issue of contention. Various solutions have been proposed, ranging from extending the salary cap into the playoffs or requiring players on LTIR to play the final game of the regular season in order to be eligible for playoffs.[28] The loophole has been discussed at both General Manager meetings as well as during negotiations between the league and the Players Association, but no actions have been taken to make a change.[29]

 

Until this loophole is addressed, teams will and should continue to capitalize on this technicality, best demonstrated by the Golden Knights. On the first day of the 2024 playoffs, the Gold Knights not only activated Mark Stone, but also Alex Pietrangelo and William Carrier from LTIR.[30] The addition of these three players added an additional $10.9 million to the Golden Knights’ playoff roster.[31] Whether the method is seen as unsavory or cautious, it is not illegal. In the 2023-24 season, over 20 teams utilized the LTIR at same time throughout the year to help maintain their roster. [32]

 

2025 Trade Deadline Looms Ahead

 

While Mark Stone is not on the LTIR this year, other major playoff teams have some of their top players on LTIR prior to the trade deadline tomorrow at 3 p.m. The Florida Panthers, the reigning Stanley Cup champions, currently sit tied for first in the Atlantic division. However, their star forward, Matthew Tkachuk, was recently injured at the 4 Nations Face-Off and is set to miss the remainder of the regular season.[33] When announcing his injury, the Panthers’ General Manager shared the team hopes to have him back for playoffs.[34] This would both allow Tkachuk time to recover following his superstar performance at 4 Nations and provides the team with $5.3 million in cap space they could utilize before the trade deadline.[35]

 

Similarly, the Dallas Stars, second in the Central Division, also have one of their star wingers, Tyler Seguin, on LTIR, but he is currently expected to return “early in the play-offs.”[36] However, with Seguin’s $9.85 million cap hit on reserve, this leaves the Stars with an additional $4.6 million to sign additional depth players.[37] Similarly, the Minnesota Wild, third in the Central Division, have star forwards like Kirill Kaprizov and Joel Eriksson Ek on LITR with no official return date in sight.[38] With the two players' nearly $15 million in cap space, the Wild have already begun making moves by trading to acquire Gustav Nyquist on Monday.[39] With an additional $7.5 million in cap space available, the Wild will have their eyes keen on trade eligible players leading into tomorrow.[40]

 

The most dangerous teams right now are the Columbus Blue Jackets and Calgary Flames. The teams have $18.9 million and $17.9 million respectively in cap space as of the day before the deadline.[41] The Blue Jackets currently have Wild Card 1 in the Eastern Conference while the Flames have Wild Card 2 in the Western Conference.[42] With star forwards Sean Monahan and Cole Sillinger out week-to-week,  the Blue Jackets have the funds and motivation to make their first playoff appearance since the 2020 bubble playoffs.[43] While Monahan was initially expected back mid-March, unexpected setbacks continue to push that timeline back.[44] Similarly, Sillinger is expected to miss several weeks, including the majority of March, but is posed to make a timely return for playoffs.[45]  With roughly twenty games and about $20 million in cap space, both teams are likely to be active players prior to the trade deadline.[46]



JUHI PATEL (editor-in-chief) is a 2L at Villanova University Charles Widger School of Law. She self-identifies as an off-brand New York Sports fan rooting on the Islanders, Nets, and Bills. She is a part of the Soccer Negotiation Competition Team as well as the executive boards for the Labor and Employment Law Society and IP Law Society.



References:

[2] SI Staff. The 2004 NHL lockout: A light look back at a dark day (9/16/04). Sports Illustrated (Sept, 15, 2014) https://www.si.com/nhl/2014/09/15/2004-nhl-lockout-look-back-at-dark-day

[3] Salary Cap. CapFriendly (accessed Apr. 19, 2024) https://www.capfriendly.com/salary-cap

[4] Cathy Squires. Salary Cap Loopholes and Well-Timed Injuries: Can the Leafs pull off the Chicago Gambit? PPP Leafs (Jan. 14, 2020) https://www.pensionplanpuppets.com/salary-cap-loopholes-and-well-timed-injuries-can-the-toronto-maple-leafs-pull-off-the-chicago-gambit/

[5] See Id.

[6] See Id.

[7] See Id.

[8] Navin Vaswani. GMs reportedly want clarify on so-called Kane salary cap ‘loophole.’ The Score (2016) https://www.thescore.com/nhl/news/970796

[9] See Id.

[11] See Id.

[12] Joe Smith. Precedent shows Nikita Kucherov case is caution – not cap circumvention. The Athletic (Mar. 18, 2021) https://theathletic.com/2457989/2021/03/18/precedent-shows-nikita-kucherov-case-is-caution-not-cap-circumvention/

[13] See Id.

[14] Career Playoff Stats. NHL (accessed Apr. 21, 2024) https://www.nhl.com/lightning/player/nikita-kucherov-8476453

[15] See Id.

[16] Joe Smith, supra note 11.

[17] Mary Clarke. Nikita Kucherov fully embraces his role as the NHL’s newest villain with ‘$18M over the cap’ shirt. ForTheWin (July 11, 2021) https://ftw.usatoday.com/2021/07/lightning-nikita-kucherov-shirt-18m-over-cap-stanley-cup

[18] Greg Wyshynski. Source: NHL watches trades for cap manipulation. ESPN (Feb. 28, 2023) https://www.espn.com/nhl/story/_/id/35753473/source-nhl-watches-trades-cap-manipulation

[19] Chris Gawlik. Did Golden Knights Circumvent the Cap? Vegas Hockey Now (June 22, 2023) https://vegashockeynow.com/2023/06/22/golden-knights-cap-circumvention/

[20] See Id.

[21] See Id.

[22] Michael Russo. Golden Knights cap circumvention? Why the NHL and other GMs aren’t crying foul on Mark Stone LTIR. The Athletic (Mar. 14, 2024) https://theathletic.com/5341529/2024/03/14/golden-knights-cap-circumvention-nhl/

[23] See Chris Gawlik, supra note 18.

[24] See Michael Russo, supra note 21.

[25] See Id.

[26] See Id.

[27] See Id.

[28] See Id.

[29] Emily Kaplan and Kristen Shilton. Takeaways from the NHL GM meetings: LTIR ‘loophole’ staying, World Cup of Hockey returning. ESPN (Mar. 29, 2022) https://www.espn.com/nhl/story/_/id/33623569/takeaways-nhl-gm-meetings-ltir-loophole-staying-world-cup-hockey-returning

[31] See Vegas Golden Knights. CapFriendly (accessed Apr. 21, 2024) https://www.capfriendly.com/teams/goldenknights

[32] See Michael Russo, supra note 21.

[33] Mike McDaniel, Panthers Star Matthew Tkachuk Out for Season Due to 4 Nations Face-Off Injury (Mar. 4, 2025). Sports Illustrated. https://www.si.com/nhl/panthers-matthew-tkachuk-out-for-season-due-to-4-nations-face-off-injury

[34] Id.

[35] Florida Panthers Overview (last visited Mar. 6, 2025) Puckpedia. https://puckpedia.com/team/florida-panthers

[36] Dallas Stars Roster (last viewed Mar. 6, 2025) Puckpedia. https://puckpedia.com/team/dallas-stars

[37] Id.

[38] Minnesota Wild Roster (last viewed Mar. 6, 2025) Puckpedia. https://puckpedia.com/team/minnesota-wild

[39] Robert Brent, The Wild Had Better Trade Targets Than Nyquist (Mar. 3, 2025) Hockey Wilderness. https://hockeywilderness.com/news-rumors/minnesota-wild/the-wild-had-better-trade-targets-than-nyquist-r30536/

[40] Minnesota Wild Roster, supra note 38.

[41] NHL Salary Cap Summary (last visited Mar. 6, 2025) Puckpedia. https://puckpedia.com/

[42] Wild Card Standings (last visited Mar. 6, 2025) NHL. https://www.nhl.com/standings/2025-03-05/wildcard

[43] Columbus Blue Jackets overview (last visited Mar. 6, 2025) Puckpedia. https://puckpedia.com/team/columbus-blue-jackets

[44] Aaron Portzline, Blue Jackets‘ Sean Monahan expected to be out until March after injury setback (Jan. 25, 2025) The Athletic. https://www.nytimes.com/athletic/6088411/2025/01/25/monahan-blue-jackets-injury/

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