RFA’s And The Offer Sheet

Understanding The RFA Offer Sheet ….

Before we get into the meat of the article the RFA offer sheet is a tool that is very seldom used and there is a lot of information upcoming about all the nuances of RFA’s and the offer sheet.  Historically the offer sheet is usually matched.  I would like to see offer sheets used a little more often but it seems to be a taboo within GM circles.  HAVE FUN

Definition Of A RFA

A player who is no longer considered to be entry-level, but does not qualify for UFA status. He becomes a restricted free agent when his contract expires. 

Definition Of A UFA

A player may only declare himself to be an unrestricted free agent if he is over the age of 27 or has played in the league for a minimum of 7 years. 

The National HockeyLeague offer sheet is a contract offered to a restricted free agent by one of the other 29 member teams.  If the player signs the offer sheet, his current team has seven days to match the contract offer and keep the player or else he goes to the team that gave the offer sheet but with a pre-determined compensation going to his original team.

When dealing with the offer sheet scenario, teams may not have two different players signing offer sheets at the same time unless  the value of the offered contracts would involve the different level of draft pick compensation.

Zack Bogosian

Winnipeg Jet RFA Zack Bogosian

Example: If a restricted free agent accepts a contract with a yearly salary of at least $8,410,977, the team can only offer to other restricted free agents contracts less than $3,364,392 per year, since those would not require any first round pick as compensation.  See chart below.

Compensation Levels

A.  $1,110,249 or below – No Compensation

B.  Over $1,110,249 to $1,682,194 – 3rd round pick

C.  Over $1,682,194 to $3,364,391 – 2nd round pick

D.  Over $3,364,391 to $5,046,585 – 1st round pick, 3rd

E.  Over $5,046,585 to $6,728,781 – 1st round pick, 2nd, 3rd

F.  Over $6,728,781 To $8,410,976 – Two 1st Round Picks, 2nd, 3rd

G.  Over $8,410,976 – Four 1st Round Picks 

In addition, if a team does not have a pick in the next upcoming draft available for compensation, they may not make a contract offer in the certain range where that pick is needed for compensation.

Teams may not use draft picks acquired in trades with other teams, but extra acquired draft picks can influence a team’s decision to submit an offer sheet.  

To Summarize

1.  Player has to sign the offer sheet.

2.  Who can get them?

      A.  Players that have received a qualifying offer can sign an offer sheet.  

      B.  Players that are headed to arbitration cannot.

3.  If a player signs an offer sheet then his current team get seven days to match the offer sheet.

4.  If they match the offer sheet they cannot trade him for the entire season. 

5.  If offer is not matched original team receives compensation based on player salary chart. 

Definition Of A Qualifying Offer

1.  The current team must extend a “qualifying offer” to a restricted free agent to retain negotiating rights to that player.

2.  Players who earned less than $660,000 in the previous season must be offered 110 percent of last season’s salary.

3.  Players making up to $1 million must be offered 105 percent. Players making over $1 million must be offered 100 percent.

4.  If the qualifying offer is not made, the player becomes an unrestricted free agent.

5.  If the player rejects a qualifying offer, he remains a restricted free agent.

6.  If the player does not sign before December 1st, he is ineligible to play in the NHL for the remainder of the season.

Player Options

1.  If a player accepts a qualifying offer he remains with his current team for a one- or two-year term.

2.  The length of the contract is determined by the player and at the end of this contract the player becomes an Unrestricted Free Agent.  

. While the player is in negotiation with his current team, other teams are allowed to extend Offer Sheets to him. Should the player sign a proposed Offer Sheet, his current team is notified as such, can no longer negotiate a new contract or trade the rights to negotiate and is left with 2 options, Accept or Decline. The current team has 5 days to make its decision.

  • Accept:  The player remains with his current team on a contract identical to that of the Offer Sheet. The team is not allowed to trade the player for one year.
  • Decline:  The player becomes a member of the team with whom he signed the Offer Sheet under all the terms of said Offer Sheet. His now former team claims draft picks from the player’s new team as compensation. Compensatory draft picks are determined by the player’s new salary on a sliding scale.

At any point during the negotiation process, if the player has been in the NHL for longer than 4 years (less if the player signed his first contract after the age of 20), either the player or his current team may file for Salary Arbitration as a means of settling a contract dispute. At this point the player may no longer sign an Offer Sheet. The deadline to file for Salary Arbitration is July 5th with cases being heard between late July and early August.

Definition Of Salary Arbitration

Both the player and his current team submit their expectations for the player’s salary for the coming year. The team cannot request a reduction in salary of greater than 15%. The arbitrator hears the case from both player and team and renders a verdict. The verdict sets the salary the team is required to pay the player. After the arbitrator’s verdict is rendered, the team must make a decision within 48 hours of the verdict being rendered. If the team accepts, the player is signed to a new contract at the salary set in the verdict. Should the team decline, the player then becomes an unrestricted free agent.

A team can take a player to arbitration once in his career. Players may request salary arbitration as often as they please.

Aren’t you glad you read this? 

 

 

 

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