Inflated cap hits for mid-season contracts

Recently, [John Klingberg](/person/john-klingberg-5322) signed a $1.35M contract with the Edmonton Oilers mid-season. Why then, is his cap hit listed at approximately $1.75M?

It comes down to the contract specific pay and the NHL's salary cap system. For a mid-season contract, NHL salary is pro-rated, but signing bonuses are paid in full.

Because NHL salary is pro-rated, Klingberg's $1M NHL salary keeps its $1M cap hit. Like every other NHL player with a $1M salary, he will be paid ~$11k each day. At the end of the season, he will have made about $460k in NHL salary, and the Oilers will be charged the same amount against the salary cap. The cap hit for his NHL salary remains $1M.

His $350k signing bonus, on the other hand, has already been paid in full. The Oilers need to be charged that full amount over the remainder of the season, about $3900 per day. Over the length of the season (~190 days in 2024-2025), a daily $3900 cap charge would sum up to about $750k.

Between NHL salary and the inflated signing bonus cap hit, we have $1M and $750k for a total cap hit of about $1.75M.

We talk about NHL contracts in yearly terms, but players are paid daily, and salary cap charges are calculated daily. As such, we adjust our cap hits to the full length of the season.