What’s with all the dead money on the Utah Hockey Club’s books?

If you’ve taken the time to peruse the Utah Hockey Club’s PuckPedia page , you might be wondering why so much of the team’s salary cap is occupied by people who don’t play for the team. We’ll explain each player’s situation. But first, let’s define some important terms.

What is a buyout in the NHL?

When a team determines that a given player no longer provides the value that the team would like, the team might buy out the player’s contract. This means that the team only pays part of the player’s remaining salary and the player is free to sign with another team.

If the player is 26 or older, he is owed two-thirds of the remaining money on his contract. If the player is younger than 26, he is owed one-third of the remaining money. Regardless of age, the money is paid out over twice the number of years remaining on the contract.

For example, if a team buys out a 27-year-old player who makes $3 million a year and has four years remaining on his contract, the team owes him $8 million, which would be paid over the next eight years.

The payments are based on how much actual money remains on the player’s contract, rather than the average annual value. This is a major reason why lots of players negotiate for front-loaded contracts, which pay large chunks of the money in the first few years of the deal and relatively small amounts in the latter years.

What is retained salary in the NHL?

When a team trades a player, the team can retain the responsibility to pay up to 50% of the remaining money the player is owed. That money counts against the salary cap of the team trading him. This is negotiated as part of the trade, as it saves the acquiring team both money and cap space, and it typically increases the value of the return on the trade.

While one team can’t retain more than 50% of the money owed to a given player, a second team may retain another 50%. Let’s be clear: This does not mean that the third team gets the player without paying him anything; the second team can pay up to 50% of the remaining money after the initial trade.

A recent example of this was when the Toronto Maple Leafs acquired Ryan O’Reilly from the St. Louis Blues in 2023. The Blues retained 50% of O’Reilly’s $7.5 million contract, keeping a total of $3.75 million. They then traded him to Minnesota, which retained 50% — $1.875 million — of the remaining $3.75 million owed to O’Reilly. The Wild then traded him to the Maple Leafs, where he was owed just $1.875 million, allowing them to fit a valuable player within the salary cap at a much lower price.

In this example, both the Blues and the Wild received assets simply for retaining salary, which is why it can be worth it for a team to do it.

Remember this: A team can retain money on no more than three contracts at a time. For this reason, it’s much easier to get a team to retain money on a contract with one year remaining than a contract with several years remaining.

LTIR

Long-Term Injured Reserve is an exemption that can be applied to a team’s salary cap when a player is injured. If the player is expected to miss at least 10 games and 24 days due to an injury or illness, the team can place him on LTIR. That allows the team to go over the salary cap by the amount of money owed to the player.

For example, if a player who makes $3 million gets injured and is expected to miss 10 games and 24 days, the team can place him on LTIR and now spend a total of $91 million, rather than the normal $88 million; however, this only benefits the team if it doesn’t plan on having the player back during the regular season because once that player comes back from injury, the team’s cap goes back down to $88 million.

There is no salary cap in the playoffs, so teams will sometimes utilize LTIR to keep highly paid players out of the lineup from the trade deadline until the playoffs, allowing them to acquire extra help. Though many teams have done this, the Vegas Golden Knights currently take the most heat for it, having placed captain Mark Stone on LTIR three years in a row, only to have him return for the first game of the playoffs.

Utah Hockey Club salary cap

Alright, let’s get into Utah HC’s cap situation.

Oliver Ekman-Larsson

Utah has one buyout on its books: former Coyotes captain Oliver Ekman-Larsson. It’s a particularly sticky situation because Arizona/Utah did not buy him out — the Vancouver Canucks did, two years after acquiring him from the Coyotes.

The Coyotes had retained 12% of Ekman-Larsson’s contract when they traded him. Now that he has been bought out, the Coyotes are only on the hook for two-thirds of the money that they’d owed him, but that money is spread out over eight years, rather than the four more years they’d expected to have to pay him.

Why does this matter? Well, remember when we said “remember this?” in reference to the fact that a team can only retain money on three contracts at a time? The Ekman-Larsson buyout occupies one of Utah’s salary retention spaces until 2031.

Ekman-Larsson must be happy, though. Yes, he receives less money than he thought he’d get, but he was free to pursue another NHL job. He signed with the Florida Panthers last summer, led their power play, won the Stanley Cup and earned a four-year deal with the Toronto Maple Leafs.

OEL must be a true Panther because he sure landed on his feet.

Zack Kassian and Patrik Nemeth

There’s less drama with the buyouts of Zack Kassian and Patrik Nemeth than there was with that of Ekman-Larsson.

The two players were bought out on the same day: June 21, 2023. Both were advancing in age and neither had performed well the previous season. Because the Coyotes were buying out their own players, rather than having retained salary on a traded player, these buyouts do not affect their ability to retain salary on future trades.

Shea Weber

The Utah Hockey Club has a member of the Hockey Hall of Fame on its roster. He won’t be on the roster come opening night and he has never played a game for Arizona or Utah, but Hall of Fame defenseman Shea Weber belongs to Utah HC.

Weber last played in the NHL during the 2021 Stanley Cup Final, when his Montreal Canadiens lost in five games to the Tampa Bay Lightning. He reportedly battled injuries throughout the entire playoffs that year, and they’ve kept him out of his teams’ lineups ever since.

The Coyotes acquired Weber and a fifth-round pick from the Vegas Golden Knights, who had previously acquired him from the Canadiens. It helped the Coyotes get to the cap floor without having to spend as much actual money, as Weber’s cap hit is about $7.86 million but his actual salary is $1 million per year for three years.

After undergoing a routine checkup with the team doctors to verify that he’s still unfit to play, Weber will be placed on LTIR at the beginning of the season and then carry on his merry way, collecting a million bucks a year and admiring the street named after him in his hometown of Sicamous, British Columbia.

Fun fact: Weber signed this contract as a restricted free agent in 2012. The Philadelphia Flyers had attempted to steal him from the Nashville Predators with an offer sheet, but the Predators matched it. It was a 14-year deal worth a total of $110 million and it’s still the highest-value contract in NHL history.