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Long-Term Injured Reserve

I'm by no means a capologist, so I was wondering if someone could explain to me how the long-term injury reserve works. For example, if Sid goes on the LTIR, the Pens still pay him his $8.7, but does it come off the cap? Last season, this gave us room to bring in Kovalev. Hopefully Sid is back sooner than later, I was just wondering how it works. Any insight is much appreciated!


                                                                                                                                                                                                               

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