Players on LTIR, do not affect a team ability to sign other players to "replace" the LTIR. So come this summer if the the cap 83m, the Leafs can spending on 83m on "working" players 5.3m Horton for a total of 88.3m

Where LTIR does affect a team...sometime, is WHEN it can spend it's performance bonus money. This year the Leafs want no performance bonus carryover to the very expensive next year. So in the Leafs case this year and this year only, the Leafs have Horton "on the roster", so they allowed to pay this PB money in the same year. If Horton is not "on the roster", PBs have to be carried over to the following year.

Horton's contract can be entirely negated (IE Leafs can spend up to 5.3 million over the cap) with him on LTIR. However, LTIR CANNOT be used for performance bonuses, which are added after the season is over. I expect that the Leafs pay out 3.7 million in bonuses this year, so we have to have that much space, or else the salary rolls over to next season (which would be bad considering how tight we are next year).

What this all means is that Horton's contract has to count against the cap this year, but won't next year in terms of space.