A deep look at the Colorado Avalanche’s salary cap situation as the team heads into training camp

The Colorado Avalanche are in an enviable position salary cap-wise. According to PuckPedia, the Avs have a little over $2 million in available cap space. The club has room to add a low-cost player such as Pierre-Edouard Bellemare who has joined the team on a PTO.

While the Avalanche’s cap situation may seem solid, there’s far more beneath the surface. In fact, the return of one or two players could derail the Colorado Avalanche’s entire cap structure.

So, let’s take a closer look at where the Avalanche’s cap situation stands as training camp is set to open.

Taking a deep dive into the Colorado Avalanche's potential cap crunch

The Colorado Avalanche’s cap situation as it stands

As mentioned earlier, the Avs have a touch over $2 million in available cap space. That cap space is there because two high-priced players are not on the roster.

Let’s start with Colorado Avalanche captain Gabriel Landeskog. Landeskog has been on long-term injured reserve (LTIR) for the past two seasons. As per PuckPedia, Landeskog has a $7 million cap hit. However, at this point in time, Landeskog’s cap hit is on the Avs’ books.

Technically, players cannot be placed on LTIR during the offseason or preseason. Players can only go on LTIR once the season officially begins.

The Avs could get an extra $7 million worth of cap space by placing Landeskog on LTIR prior to the season’s opening. As of now, the Avs don’t need to do that. The club can ice a full roster without placing Landeskog on LTIR.

But if the club wanted to, they could add therefore $2 million in current cap space plus Landeskog’s $7 million, totaling $9 million. However, that situation could change if Landeskog returns to the ice (more on that in a moment).

Then, there’s Valeri Nichushkin. Nichushkin was suspended without pay for at least six months back in May, as he entered the NHL/NHLPA Player Assistance Program. Allegedly, the suspension stemmed from a substance violation.

Whatever the case, Nichushkin’s situation actually subtracts his salary from the Avs’ cap structure. PuckPedia shows Nichushkin’s cap hit as -$6.13 million. Unlike LTIR, a suspension removes the cap hit from the team’s books.

In contrast, LTIR actually allows the team to exceed the cap. So, if the Avs max out the cap at $88 million and then place Landeskog on LTIR, that would allow the Avs to bump up to $95 million. This provision is included in the cap rules as the entire point of LTIR is to allow teams the flexibility to replace a player when he’s out for more than 10 games or 24 calendar days during the regular season.

However, Nichushkin’s situation is treated like he’s not even on the team. But like Landeskog, things could get dicey if Nichushkin returns.

The Colorado Avalanche could have serious cap complications if Landeskog and Nichushkin return

Now, let’s be clear for a moment. Getting a healthy and productive Gabe Landeskog and Valeri Nichushkin on the club would be a major boost.

Nevertheless, their returns could wreak havoc on the team’s salary cap structure.

Let’s explore the following scenario:

Landeskog is cleared to play. He plays a few rehab games in the AHL and hits the ice with the Avs. The Colorado Avalanche have their captain back and all is good.

Since the Avs don’t add Landeskog to LTIR, the team’s current cap space remains $2 million. So far, so good.

Now, let’s assume that Nichushkin is also cleared to play. Per the terms of his suspension, Nichushkin could return to the lineup as early as mid-November. Please note that it’s not automatic that he can suit up. There’s no telling in what sort of physical or mental condition Nichushkin is in. As such, it may take longer for Nichushkin to be game-ready.

Here’s where the trouble begins.

Nichushkin carries a $6 million cap hit. If we subtract $6 million from $2 million, that leaves the Avs $4 million in the hole.

In short, that cannot happen. The Avs would have to find a way to remain cap compliant. Otherwise, they could face a financial penalty or worse, forfeit games for being over the cap. The closest team to a situation such as that was the Vegas Golden Knights. The Knights had to ice an undermanned team in order to remain cap compliant.

Overall, having Landeskog and Nichushkin could send Colorado management into a frenzy. GM Chris MacFarland would need to figure out the best way to remain cap compliant without sacrificing the lineup.

That task is easier said than done. So, let’s get into the potential options the Avs would have to remain cap compliant.

Ways the Colorado Avalanche could remain cap compliant

Again, we’re dealing with the assumption that both Landeskog and Nichushkin return. Please bear in mind that if either one returns, the Avs should have an issue.

Let me explain.

If Nichushkin returns, his $6 million cap hit would blow past the cap ceiling. But if the Avs place Landeskog on LTIR, the problem is solved.

If Nichushkin’s suspension is up but he doesn’t return, the Avs could place him on LTIR if he qualifies. Otherwise, the Avs may explore trading him or placing him on waivers. However, that topic is best reserved for another day.

So, getting back to Landeskog and Nichushkin on the ice. That’s roughly $4 million over the cap. The Avs would need to clear space. There are two main ways to do it.

First, the Avs don’t dress a full team. For instance, the Avs could dress 18 or 19 players instead of 20. Similarly, the Avs could send someone down to the AHL. But doing so could prove tricky.

According to PuckPedia, the only players who are waiver-exempt are Nikolai Kovalenko, Chris Wagner, and Jacob MacDonald. Anyone else who gets sent down to the AHL would have to clear waivers, meaning the Avs could lose that player for nothing.

The Avs could explore such a situation, for example, if the club waives someone like Oliver Kylington. If Kylington gets picked up, the Avs rid themselves of his cap hit. But if he clears, he goes down to the AHL but his cap hit remains on the books.

At that point, the other alternative would be to trade someone. That’s where things can become extremely complex. The Avalanche would need to move a player whose cap hit offsets the amount over the cap.

Alternatively, multiple players with lower cap hits could be moved. But who? I won’t get into specific names as there could be an endless number of possibilities.