It occurred to me yesterday as I was throwing around some acronyms that it might be worth a post to explain how the free agency system actually works.
I’ll do my best to cut through the legalese, but for those of you that enjoy torturing yourself (or if you suffer from bouts of insomnia and need help nodding off), here is a link to the full NHLPA collective bargaining agreement.
Note: contract years run from July 1st to July 1st, hence the free agent period always starting at noon eastern on July 1st.
Unrestricted Free Agents (UFA) – these are the players who are free to sign with any team once their existing contract expires and the free agent period begins. Up until the free agent period begins, the player can only negotiate a contract extension with his current team. In some cases, teams that are about to lose a player to free agency opt to trade the exclusive negotiating rights for that player to another team in order to get something for him. We saw that this year with Christian Ehrhoff (his rights were actually traded twice) and James Wisniewski. In both cases, the players got signed by their new teams before making it to free agency.
Types of UFA:
Group 3 – The most common type of UFA. Includes any player who is 27 years of age or older as of June 30th or has accrued 7 seasons in the NHL.
Group 5 – Includes any player who has played 10 seasons of professional hockey (minor league or NHL) and did not earn more than the average league salary in the final year of his last contract.
Group 6 – Includes any player who is 25 years of age or older and has played 3+ professional seasons, as long as he’s played less than 80 career NHL games as a skater or 28 career NHL games as a goalie.
Other – Includes any undrafted player who is not eligible for any future entry drafts and is not on any team’s reserve list.
Restricted Free Agents (RFA) – these are the players whose existing contract is expiring, but do not qualify as unrestricted free agents. Essentially, restricted free agents can agree to “offer sheets” from other teams when the free agent period begins, however as long as their current team has “qualified” them as a restricted free agent, they retain the right to match any offers made by other teams. Should the team who owns the rights to the RFA choose not to match the terms of the offer sheet, they will receive compensation from the “poaching” team based on the salary level of the new contract as follows:
- $660,000 or below —> no compensation
- $660,000 – $1,000,000 —> 3rd round draft pick
- $1,000,000 – $2,000,000 —> 2nd round draft pick
- $2,000,000 – $3,000,000 —> 1st and 3rd round draft picks
- $3,000,000 – $4,000,000 —> 1st, 2nd and 3rd round draft picks
- $4,000,000 – $5,000,000 —> two 1st, one 2nd and one 3rd round draft pick
- Over $5,000,000 —> four 1st round draft picks
There has been a bit of drama this year surrounding potential offer sheets for guys like Steven Stamkos and Drew Doughty, but so far nothing has come of it. There’s an interesting dynamic with offer sheets in that other GMs consider them to be somewhat of a faux pas. It requires a pretty big set of cajones for a GM to go against the norm and try to land another team’s restricted free agent.
Types of RFA:
Group 2 – The most common type of RFA. Includes any player that has fulfilled his entry level contract but does not qualify as a UFA or a Group 4 RFA. Note: when players are first drafted, they are classified as Group 1 and are subject to some complicated rules for signing an entry level contract (ELC).
Group 4 – This one gets a little messy but it basically includes “defected players”, which are players who either (a) never fulfilled their current NHL contract but went on to play with an unaffiliated club (non-NHL) or (b) got drafted by an NHL club but never signed an NHL contract and instead went to play for an unaffiliated club.
Hopefully this cleared things up a little. There will be a test next year