Peter Chiarelli: Salary Cap Extraordinaire


Peter Chiarelli started off his Independence Day looking at the Boston Bruins depth chart and realized he had some glaring holes. Nathan Horton already declared he was off to test the Free Agent market and it looked as if Tyler Seguin was the only top scoring option on the right side of the offensive attack. At this time the depth chart would have placed Seguin on the top line while playing out of position, Peverley would have had to move up to Line 2’s right wing while also playing out of position. Shawn Thornton an offensively challenged, fan favorite  may have had to slide up to line 3. Another possibility  would have been playing  Carl Soderberg yet another center, over to the right side of Line 3. The only other feasible decision there would be Daniel Paille. This lineup shows 3 guys playing out of position.

The lines going into that day with chances of shuffling the deck around would have roughly looked something like this…

First Line: Lucic, Krecji, Seguin

Second Line: Marchand, Bergeron, Peverley

Third Line: Soderberg, Kelley, Paille

Fourth Line: Caron, Campbell, Thornton

All members of last year’s Stanley Cup run in the mix, but not exactly a lot of scoring depth and 75% of this line-up would have featured left handed shooting forwards. I can’t stress enough how many times I witnessed Bruins’ rushes fail due to passes handcuffing each other with same handedness all over the ice and that includes the defense as well as the pivot on the top power play unit. To be perfectly honest I prefer to see players on the opposite wing of the hand in which they shoot with. I feel it squares the hips up to the net when skating towards the circles thus opening up scoring options. It is far easier to swivel your hips when adjusting for a pass behind you and the most positive benefit of playing on your off-wing is that your forehand is on the blocker side of the goalie and we all know how important rebounds out front can be. Of course I know I am being a nitpicker so I’ll leave it at that. I just wanted to throw my two cents in on that subject. Let’s veer back to the subject at hand.

Making matters worse was the fact that Chiarelli was operating with $5.8 Million worth of space under the NHL’s cap total of $64.3 Million. Having Tuukka Rask expected to sign a contract in the $7 million per year range, the number crunching had begun. If Rask signs at this time Chiarelli is starting the free agent signing periods about $1 Million over the cap while carrying a top line winger that had fallen out of favor with the GM and Head Coach more than most of us realized. Additionally if Rask signs before other moves are made, Chiarelli’s hand is forced to deal pieces instead of trading from a position of strength. Believe me there is no coincidence behind the fact that the Seguin partying reports reached their apex after the trade was done. Can you imagine trying to get a decent haul from Dallas if Stars GM, Jim Nill is aware just how much Tyler had been painting towns red across the NHL?

Later that day Chiarelli spins the Tyler Seguin to Dallas  trade. In that trade the Bruins dealt $8.75 Million to Dallas between Seguin and Peverley. In return the Bruins received $4.25 on the Loui Eriksson contract plus give or take $900K on Reilly Smith‘s deal with that figure dependent upon on how much playing time the young winger earns because it is a two way contract. Chiarelli gains a total of $3.6 Million on the deal, receives some talented but developing prospects and a speedy left winger. Before heading into Day 1 of the Free Agent Frenzy the Depth Chart took on a completely new look.

The logjam of centers was replaced with a proven winger on a friendlier contract and a young winger who should see some playing time among the bottom 6 forwards.

Post Seguin Trade Depth Chart:

First Line: Lucic, Krecji, ???

Second Line: Marchand, Bergeron, Eriksson

Third Line: Soderberg, Kelley, Smith

Fourth Line: Paille, Campbell, Thornton

It is most likely that Eriksson will not out produce Seguin offensively and it is hard to gauge the difference between Smith and non roster candidates Caron,  Spooner, Knight or Fraser in the bottom 6 forward combinations.  The second line receives a boost from the Seguin trade and is much faster than the Marchand, Bergeron and Jagr trio of last year. Having Eriksson on this line with his added back-checking skills has the potential to be a strong shut down defensive line with the ability to light the lamp often on counter attacks they create via the turnover. However the absence of a first line right winger who can drive the net, possesses a finishing touch and some leadership still reamins, which is where the extra $3.6 million on the trade comes into play.

Chiarelli now has about $9.4 Million available to spend on Rask at $7 million with $2.4 Million left over for a right winger. The hot names on the list of free agent right wingers would most certainly be asking for a deal exceeding that annual salary.

Heading into the day many fans including myself were under the impression that the Bruins could use the LTIR (Long Term Injury Clause) on Marc Savard‘s contract at $4.027 Million, then couple it up with the $9.4 M in cap space for a total of $13.4 Million and make a run at Daniel Alfreddson, call it a day and then sign Rask on Saturday There were differing reports on the web regarding the LTIR so I decided to dive headfirst into the wonderfully, ambiguous contractual language known as the NHL collective bargaining agreement.

First and foremost a player 100% cannot be put on any Injury Reserve lists let alone the LTIR list in the off-season. A player must first be declared by the team physician at the START of the season to be unfit to play. There are also other  issues regarding the actual cap relief gained on an LTIR. The following are direct quotes from the actual CBA under Rule 50.10, page 290 in addition to paragraphs 2 & 3 coming from CapGeek

(iii) The total replacement Player Salary and Bonuses for a Player or Players that have replaced an unfit-to-play Player may not in the aggregate exceed the amount of the Player Salary and Bonuses of the unfit-to-play Player who the Club is replacing;

Teams requiring long-term injury relief to fit a roster under the salary cap throughout the season can be at risk of ending up with a bonus overage. That’s because utilizing LTIR results in the team finishing the season with $0 cap space. For teams in these positions with players earning performance bonuses, those bonuses are tacked onto their final cap payroll as an overage and carried forward as a penalty the following season.

In order to maximize cap space, teams generally want their cap payroll or “Averaged Club Salary” to be as close to the cap as possible before putting a player on LTIR. This places critical importance around the timing of placing a player on LTIR, especially at the start of the season.


Even if the Bruins had the ability to use the LTIR, Marc Savard’s contract could not be used to be replace the Tuukka Rask contract according to the ” cannot exceed aggregate salary” provision. Because of this a contract on the LTIR cannot be used in conjunction with existing cap space and the last piece of important information pertaining to the LTIR is that the Bruins would only gain salary cap relief if they actually exceeded the upper limit aka the salary cap by signing a replacement player. To summarize , do not use it unless you have to replace a player during the season and have no more money to do so.

Allow that to marinate for a moment so you can understand what must be going through the mind of Peter Chiarelli. For all intended purposes $2.4 million isn’t exactly the type of money that attracts Top 6 forwards to sign on the dotted line. This became more apparent as the day wore on with players signing some rather large contracts and at a frenzied pace no less. If you were following  on Twitter that day your head was probably spinning as was mine.

According to reports, Daniel Alfreddson was numero uno on the Bruins wishlist. Alreddson decided to break the hearts of his faithful Ottawa Senators by joining the Detroit Red Wings for 1 year at $5.5 million.

David Clarkson‘s name then started to gain momentum but he chose to sign  with the Toronto Maple Leafs in what I would consider the most outlandish deal of the day at 7 years and $36.75 million.

Michael Ryder was up next on the list and at this time you could see the Bruins fans simultaneously start panicking due to a lack of a signing and clamoring for Ryder to come back to Boston. Ryder decided to sign with the New Jersey Devils for 2 years at $3.75 Million per year. All 3 of these deals clearly above the $2.4 Million left in Chiarelli’s cap bank.

If Chiarelli panics and matches the offer to Alfreddson and he signs with the Bruins, the remaining cap space is $3.9 Million. Not enough for Tuukka. If he matches the Ryder deal at $3.75 Million per year the Bruins are still short on Rask by about $1.4 Million. The Bruins GM would have to get creative.

Enter Jarome Iginla. Behind the scenes it appears Chiarelli was kicking the tires on Iginla but with Alfreddson already signing you had to expect Iginla is going to sign somewhere within $1 Million of that contract for between $4.5-$5.5 Million. If you only have $2.4 Million to offer Iginla there is a pretty good chance he is going to pass.

The deal as we all know was signed for a base salary of $1.8 Million which isn’t the genius part of the deal in my opinion. The gem in the contract was the very attainable $3.7 Million games played performance bonus with an extra $500 K added in for goals and playoff performance. The reason the performance bonus part of the equation is the mastermind move for Chiarelli is that it kicked in a nice little 7.5% performance bonus cushion provision in the CBA which reads as follows.

When the bonus cushion is in affect, teams can exceed the salary cap in performance bonuses by up to 7.5 percent of the salary cap’s upper limit. Should performance bonuses actually earned at season’s end push them past the salary cap’s upper limit, the excess bonuses earned will be carried over as a penalty to the team’s cap payroll the following season.

Now do the math. Take the $64,300,000 salary cap and multiply that by 7.5% and the new Bruins gained an additional $4,882,500 on their salary cap at a new total of $69,182,500. The Bruins now have their first line right winger in Jarome Iginla and a total of $9,838,690 in cap space leftover. Now I am fully aware that the Bruins website and the CapGeek website are only showing $5,638,690 in available space for the Bruins to sign Rask with, but this is a bit misleading. You see they have added the complete $6 Million with the bonuses included to the Bruins cap total when in fact the entirety of his cap hit will not be paid until the season is over. They assume this total cap hit because the performance bonuses on Iginla’s contract have been deemed attainable, especially the $3.7 Million games played portion of it.

Of course there are always risks and penalties that may be accrued when salary cap manipulation comes into play.  Between Iginla, Krug and Doug Hamilton the Bruins now have a potential of $5.7875 Million in bonuses and if the Bruins exceed their salary cap with the bonus cushion added in which equals $69,182,500 they will carry that excess salary over to the 2014-2015 season as a penalty. The absolute worst-case scenario is that their salary cap will be reduced by $5.7875 M in 2014-15, if *all* bonuses are earned.

Not a pretty picture with Iginla, Bergeron, Thornton, Reilly Smith,  Seidenberg, Krug and Bartkowski all due for extensions.

To make it look more organized I decided to put in a mini salary table for you adding Rask’s $7 Million 2013-2014 cap hit to the Bruins non bonus payroll.

Salary Cap $64,300,000
7.5% Bonus Cushion $4,882,500
Cap w/Cushion $69,182,500
Non Bonus Payroll $64,696,310
Bonuses $5,787,500
Total Cap Payroll $70,483,810
Estimated Cap Penalty $1,301,310

As you can see heading into the season if Krug, Hamilton and Iginla hit all of their bonuses the Bruins will carry a $1,301,310 penalty aka deduction from their salary cap at the onset of the 2014-2015 season. For those of you wondering… the Patrice Bergeron extension will have no effect on the 2013-2014 season.

The above numbers coincide with the Depth Charts as follows:

First Line: Lucic, Krecji, Iginla

Second Line: Marchand, Bergeron, Eriksson

Third Line: Soderberg, Kelley, Reilly Smith

Fourth Line: Paille, Campbell, Thornton

Defensemen: Chara, Seidenberg, Boychuck, McQuiad, Krug, Bartkowski

Goalies: Rask, Johnson

The $1.3 Million overage penalty can be maxed out to the aforementioned $5,787,500 in many ways.

If Iginla gets injured and doesn’t reach his $3.7 Million games played bonus.
Same goes for $737,000 for Hamilton and another $850,000 for Krug.

Krug and Hamilton can also lose pay because they are on two way contracts. Same goes for Reilly Smith.

Two way contracts are paid out by days spent in the NHL during the season which last year was 188 days long. Bruins players that may see playing time who are on two way contracts include Krug, Hamilton, J. Morrow, Reilly Smith, Svedberg,  and Matt Fraser.

Say for example Smith is on the roster every day during the regular season he would be paid his full contract of $900,000. If he only stays on the Bruins Roster for 50 days during the regular season his pay would be calculated like this: ($900,000/188 days) x 50 = $239,361.

Chiarelli can play with the rotation of the current Hamilton, Krug and Smith roster spots to a small advantage. He can also lose money if Rask or Johnson gets hurt and additional cap space gets eaten by a promotion of Svedberg.

All of the injury possibilities and the current cap penalty is why Chiarelli should avoid anymore free agent signings at this point. With a worst case scenario of a $5,787,500 carry over of salaries next season and the possible need to make room to take on more salary with a trade deadline deal, in my  opinion trades are the best way to add talent to the current Bruins roster.