Free Agency Simplified

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Free agency is a very complex issue filled with rules and regulations. None of these things sound very fun or necessary to the casual hockey fan, which is why Crosschecked is breaking it down for you step by step.

STARTING IN THE NHL
When a player is first drafted, his team can either keep him in the minors (for Vancouver, this is the Chicago Wolves) or sign him to an “entry level contract”.  This is just the legal term for a rookie contract. If they sign him, he plays with the team for the regular season. Every player up until the age of 24 is required to sign a rookie contract. The maximum any rookie can be paid is $925,000 a year with a 10% signing bonus.

STEP 1: BECOMING A FREE AGENT
Whenever a player’s contract expires, he becomes a free agent. Starting on July 1st, a player becomes eligible to sign a new contract with any team in the NHL.

STEP 2: TYPES OF FREE AGENTS
Before signing a contract, a player can either be classified as an Unrestricted or Restricted free agent. Here is a quick rundown of the difference between the two:

Unrestricted free agents (UFA)
this is just as simple as it sounds; a player who is an unrestricted agent can sign with any team in the NHL.In order to be declared a UFA, a player must meet the “27-7 criteria” – This means a player must be either 27 years old OR have played 7 years in the NHL.

Restricted Free Agents (RFA)
If a player does not meet the 27-7 criteria and is not a rookie, they are a Restricted Free Agent. Here is a breakdown of what happens when a player is an RFA.

1)   Qualifying contracts: The player’s current team can offer a “qualifying contract” – this is their old contract plus a minimum 10% raise. If the team doesn’t offer this, the player becomes a UFA. If the team DOES offer it but the player refuses, he remains an RFA and the team can either go to arbitration or let the offer sheets roll in.

2)   Arbitration: If the player or team decide the qualifying contract isn’t fair, they can choose to use arbitration. A neutral party is brought in to decide how much the player is worth. If the team does not agree and refuses to sign the contract within 48 hours, the player becomes a UFA.

3)   Offer Sheets: So the player refused the team’s qualifying contract and didn’t go to arbitration… This is when the offer sheets roll in. Other teams in the league are allowed to offer contracts to the player. But if the player signs with a new team, the new team has to give up draft picks based on how much they pay the player. This is extremely rare and has only happened once in the past 6 years (Dustin Penner signed with LA). Here are the parameters for offer sheets:

New Contract

Draft Picks Required

  $1,034,249 and below

Nothing

  $1,034,250 to $1,567,043

3rd round pick

  $1,567,044 to $3,134,088

2nd round pick

  $3,134,089 to $4,701,131

1st and 3rd round pick

  $4,701,132 to $6,268,175

1st, 2nd, and 3rd round pick

  $6,268,176 to $7,835,219

2 1st round picks, a 2nd and a 3rd

  $7,835,220 and above

4 1st round picks

If a player signs the offer sheet from a new team, their original team has 7 days to match it. If they don’t, the contract goes through and the player now has a new team. The reason draft picks are used in RFA signings is to prevent opposing teams from offering monstrous contracts to RFA players, forcing their current team to overpay to keep the player. This is especially important in today’s NHL where there is a limit to how much a team can spend every season. 

In case you are wondering, Dustin Penner was traded for a 1st, 2nd and 3rd round pick. He has 17 points for the Kings in 57 games.

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Dean Brookstone 

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