The Colorado Avalanche have been playing with house money for the last couple of seasons. The team has been operating above the cap ceiling thanks to Gabriel Landeskog’s tenure on Long-Term Injured Reserve (LTIR).
Placing a player on LTIR allows teams to take that player's salary and utilize it toward replacing that player in the lineup. Teams have been utilizing the infamous LTIR loophole to spend above the cap limit.
In short, a team with a player on LTIR can spend up to the cap limit, then place a player on LTIR, automatically adding extra cap space to that team’s roster.
It’s what the Tampa Bay Lightning and Vegas Golden Knights did to get them over the top in their Stanley Cup runs.
This season, the Colorado Avalanche operated with over $13 million in LTIR money at the start of the season as Valeri Nichushkin and Landeskog started the season on LTIR. Half of that money evaporated when Nichushkin returned in mid-November.
Now, the remainder of that LTIR pool will likely go out the window as Gabriel Landeskog is set to return to full-time duty next season.
That situation means the Avalanche will need to re-sign key UFAs in Brock Nelson, Ryan Lindgren, and Jonathan Drouin plus RFA Sam Malinski.
Now, let’s crunch some numbers for a second. PuckPedia reports the Avalanche to be about $6 million over the current $88 million cap ceiling. That ceiling will hike to about $92 million next season. But that won’t be enough to keep Nelson, Drouin, Lindgren, and Malinski.
In simplistic terms, the Avalanche won’t be able to afford every player. They’ll have to choose which players go to fit everyone under the cap ceiling. The Avs could also move other contracts out to make room, but that would imply sacrificing someone. We won’t get into that discussion here. But I can only cringe at the thought of trading someone like Martin Necas or Valeri Nichushkin just to make room under the cap.
Unless Landeskog heads back to LTIR, the Avalanche will need to forego re-signing everyone and just bite the bullet.
How the Colorado Avalanche could potentially fit everyone under the cap next season
One idea that comes to mind is utilizing deferred contracts to bring costs down. Since convincing the league that Landeskog needs to go back to LTIR seems highly unlikely at this point, deferred contracts would be the way out.
These contract types are not common in the NHL, but not unheard of. For instance, the Anaheim Ducks signed Frank Vatrano to a three-year contract extension worth $18 million. However, that contract wouldn’t be paid out over the three years. Vatrano would, instead, get $900 over 10 years.
If it were me, I’d go for the guaranteed income over a longer period. Perhaps I say that because I’m just a regular guy thinking that $18 million is a boatload of money. But in practical terms, deferred money allows teams to pay players, but also manage their cap hits more efficiently.
In Vatrano’s case, he’ll get $9 million during the contract’s lifetime with the other $9 million paid out over 10 years.
That sounds like a good deal to me.
The Avalanche could utilize a similar approach with a player like Brock Nelson. They could pay him the amount he wants, but stretch out the payment across numerous years to keep his cap hit down.
It’s a win-win. Nelson gets paid and the Avalanche manage their cap more sensible. If Nelson believes the Avalanche can win, he could go for a deal like that. But if he wants to get paid now, he’ll have to settle for a team, most probably a non-contender, with the cap space to pay him.
The Avalanche, ultimately, could utilize a deferred contract structure with its impending free agents to keep the band together, while ensuring their cap compliant. As the cap ceiling goes up in the next few seasons, the increased space would make it easier to continue adding pieces to remain competitive.
It will certainly be an interesting summer as the Colorado Avalanche look to reload and make a strong run at the Stanley Cup in 2026.