A Quick LTIR Explanation

NEW YORK - SEPTEMBER 29: Alex Frolov #31 of the New York Rangers skates with the puck while Brendan Smith #2 of the Detroit Red Wings defends in the first period of a preseason game at Madison Square Garden on September 29 2010 in New York City. (Photo by Andrew Burton/Getty Images)

With the news that Alex Frolov is done for the year, he will likely be placed on long term injured reserve (LTIR) for the remainder of the season. When a player is placed on LTIR, it gives the team more breathing room in regards to cap space. To be brief, the team can "recover" the pro-rated cap hit from a player on LTIR and use it to go over the cap. However, that overage is only needed if a team is going over the $59.4 million cap ceiling. The Rangers are not going over that threshold, so they don’t "gain" the extra cap space, at least not right away.

The way the Rangers can use LTIR when not going over the cap ceiling is at the deadline. Right now, the Rangers have been "banking" cap space to use at the deadline (that’s where pro-rated cap hits come into effect). For each day that the Rangers have had Frolov, Chris Drury, Vinny Prospal, Ryan Callahan, and Erik Christensen on LTIR, they have been banking more "cap space", which is really flexibility. While LTIR allows teams to go over the cap for a period of time, it also allows teams like the Rangers (who are not going over the cap) to take on additional cap space at the deadline, and then using that LTIR overage they accumulated throughout the season.

To quickly summarize, when the Rangers officially place Alex Frolov on LTIR, they bank an extra $16,129 per day ($3 million divided by the 186 day season) that they can use at the deadline if they want to make a big splash. LTIR provides the Rangers flexibility to make that splash. Of course, whether they decide to make that move, or if that move is necessary at this point in time, is a whole other story.

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