The Hockey News’s Connor Eargood did a very capable job of explaining some of the intricacies of the NHL’s salary cap as it applies to the Red Wings’ decisions to send Justin Holl down to the Grand Rapids Griffins (for now) and waive Austin Watson to send him to Grand Rapids tomorrow (for now).
Most of us are familiar with cap space as a year-long concept. If a player signs for $1 million, then a team is committing $1 million in cap space to them for the season. But cap hit is actually calculated by prorating the daily cap hit through however many days are left in the season. So long as a team doesn’t take advantage of long term injured reserve, whatever is left over to reach the salary cap is saved up as something called accrued cap space.
Accrued cap space is calculated with the formula: Projected Cap Space x (Total Days in the Season / Days Left in the Season). Accrued cap space is essentially saved up cap space that teams can use to afford bigger transactions later on. Let’s say a team comes in $2 million under the salary cap all season. By the 100th day of the 192-game season, they can spend $3.84 million and still be under the salary cap.
This accrued cap space is very useful. It allows teams to acquire players at the trade deadline when they would otherwise come in over the salary cap. Blogger Brett Lee broke this down well in a Substack post in 2023. I highly recommend you read his work.
So what does this have to do with Justin Holl? The Red Wings save $1.15 million in cap relief by sending him down to the AHL. On a daily basis, that is $5,989.58 in daily cap savings. This money, accumulated over however long he isn’t with the NHL team, can be used to pay the remaining cap hit later on a potential acquisition. Detroit already needed to send him down to clear the roster space to sign Watson without exceeding the 23-man roster limit. Now that he has cleared, there is no incentive to call him up early because Detroit is saving up cap space to use later each day he is on the AHL books.
Cap space is also accrued by not calling up a player to fill that 23rd roster spot that Watson’s AHL assignment opens up. And as Detroit already has the players for its opening night roster in place, there is no reason to fill that space with a player who won’t play. The open roster spot allows the Red Wings to make appropriate moves in the future — calling up Holl, Watson or even rookie Marco Kasper — while still accruing cap space.
These moves are all about flexibility — both for the usage of Holl, the usage of the final roster spot and the usage of accrued cap space later on.
Continued; good stuff here.
