Explaining Free Agency: The NHL Guidelines

The National Hockey League Collective Bargaining Agreement is a ten-year agreement signed in 2012. It end 15 September 2022 and outlines the parameters for player contracts, including trade eligibility and requirements for players and teams. Free Agency includes restricted and unrestricted free agent negotiations. It begins on July 1 and signals the start of a new season of contracts for all players as their contracts roll over for another season or conclude.  Players with less then three years NHL experience are not part of Free Agency, unless they meet certain criteria as explained in the CBA.

The NHL will provide a list of players eligible for Free Agency to the media and public once the list is confirmed by all teams.

We offer this simplified overview of Free Agency. For in depth legalize language of the CBA and the rules governing Free Agency, please click here for the latest agreement.

Entry Level Players/Rookies

An entry level player is a “rookie” player who is younger then 25 as of 15 September in  the year that they play their first NHL game. These players are offered the following based on the CBA.

  • Age 18-21: Three-Year Deal
  • Age 22-23: Two-Year Deal
  • Age 24: One- Year Deal

NHL Entry Level Contracts have the following components:

  • Maximum Salary $925,000
  • Signing Bonus: Limited to 10% of maximum salary or $92,500 (included in salary)
  • Type A Bonus: Maximum $850,000 ($212,500 per individual bonus) for such performance based qualifiers such as ice time, goals, plus/minus
  • Type B Bonus: Maximum $2,000,000 for league performance awards (example: top 5 post-season awards) per season
  • Theoretically, a player could earn total compensation of $3,775,000 (chart by Centerview)

What is a UFA?

A player is considered a UFA if he does not have a contract or his current contract has expired. He is not subject to exclusive negotiating rights, meaning he is free to negotiate with any team in the NHL and any team can contact him with an offer.  He is at least 27 years old or has at least seven years playing as an NHL player., as of 30 June. They can begin talking to other teams on 24 June but can’t sign a contract with a new team until after 1 July. Those contracts have a term limit of seven years. The only compensation the losing team receives is a draft pick.

What is a RFA?

These players are no longer considered “entry level” players and they don’t yet qualify as UFAs. Their standard contracts have expired and their original team has first rights to resign them and to match offers from other teams. Qualifying Offers must be made by 5 pm on 25 June. These players may receive “offer sheets” with all the details for a new contract from other teams. The player has seven days to accept the offer or to decline. A RFA must sign a new contract by 1 December or he becomes ineligible to play for the remainder of the season.

What is an RFA qualifying offer?

An qualifying offer sheet includes all the terms of a contract such as salary, bonuses, and the length of time the player can expect to remain with his current team. The QA must be for at least one year and is subject to salary arbitration and the offer expires on 15 July at 5 pm. The player can accept or decline the offer. Once offered the team retains the RFA status of the player, even if the player does not initially sign. If no offer is made, the player becomes a UFA and can negotiate with other teams. The QA cannot be accepted prior to 1 July and the Prior Team has first right of refusal. It should be a one-way offer, if the player meets all the CBA requirements. If no offer is made the player becomes a UFA and is free to negotiate. Additional criteria is outlined by the NHL:

  • Players who earned less than $660,000 in the previous NHL season must be offered at least 110 percent of last season’s salary in a qualifying offer.
  • Players who earned up to $1 million must be offered 105 percent.
  • Players who earned over $1 million must be offered 100 percent

Put on Waivers?

This occurs when the team offers the players signing rights to other teams for consideration before a team exercises its right to end a player’s contract.

Who gets to enter into arbitration? 

A number of factors need to be met for salary arbitration. Deadline to request arbitration is 5 July. A team can request a salary arbitration only once in a player’s career; however, a player can ask as many times as he wants. Once a player asks his current team to enter into arbitration, he may no longer consider offers from other teams. When in arbitration, the team must offer 85 percent increase of the original contract. According to Cap Friendly, an arbitrator is called in to negotiate the length and terms of a new contract for RFA who have not signed an offer sheet. The player also must meet the following criteria:

  • 18-20: 4 years professional experience.
  • 21: 3 years professional experience.
  • 22-23: 2 years professional experience.
  • 24 and older: 1 year professional experience.

-Signing age is the age the player is on September 15 of the year they signed their contract, unless they turn 20 from September 16-December 31, in which case they are considered 20.
-Players aged 18 or 19 are considered to have completed a year of professional experience when they have played 10 or more NHL games in that season. Players aged 20 or older have completed a year of professional experience when they have played 10 games in a professional league, while under an SPC.

No Trade/No Move Clauses

Some contracts include no trade or no move clauses. These are part of the contracts for UFAs and become effective when a player becomes a “Group 3 Player,” meaning he “has seven (7) Accrued Seasons or is 27 years of age or older as of June 30 of the end of a League Year, shall, if his most recent contract has expired, with such expiry occurring either as of June 30 of such League Year or June 30 of any prior League Year.” They are designed to restrict the club from transferring a player without their agreement. However, a club can still terminate a contract or buy out a players contract. If a club notifies the player of their intention to terminate/buy out a contract, the player has the option to go on waivers in hopes that another team will pick up their contract.

Regular Season Waivers

The NHL CBA outlines the following timelines for regular season waivers:

13.2 The “Playing Season Waiver Period” shall begin on the twelfth (12th) day prior to the
start of the Regular Season and end on the day following the last day of a Club’s Playing Season. Subject to the provisions of this Article, the rights to the services of a Player may be Loaned to a club of another league, upon fulfillment of the following conditions, except when elsewhere expressly prohibited:
(a) Regular Waivers were requested and cleared during the Playing Season Waiver
Period; and
(b) the Player has not played in ten (10) or more NHL Games cumulative since Regular Waivers on him were last cleared, and more than thirty (30) days cumulative on an NHL roster have not passed since Regular Waivers on him were last cleared.

For more details on salary cap as teams negotiate – check out CapFriendly.

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