Definitions

contract offer

Offer sheet

In the National Hockey League, an offer sheet is a contract offered to a restricted free agent by a team other than the one for which he played during the prior season. 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, with compensation going to his first team.

The National Basketball Association uses the term offer sheet to refer to an offer made by another team to a restricted free agent who has received a qualifying offer from his current team.

Time period

Restricted NHL free agents can discuss new contracts with other teams beginning on the day after that season's draft. Discussions must stop if a player accepts a contract from his own team or is confirmed to go into arbitration with his team, be it player- or team-filed.

Compensation

When a player accepts an offer sheet and his team declines to match the value of the contract, his former team is entitled to draft pick compensation in future drafts based on the averaged yearly salary of the contract. These values were set for the 2005 offseason, with percentage increases annually equal to the same percentage increase in the average salaries of all NHL players. The 2005 and 2007 offseason values are as follows:

2005 Averaged Salary Current Averaged Salary Draft Pick Compensation
$660,000 and below $863,155 and below No compensation
$660,001 to $1,000,000 $863,155 to $1,307,811 Third round pick
$1,000,001 to $2,000,000 $1,307,812 to $2,615,624 Second round pick
$2,000,001 to $3,000,000 $2,615,625 to $3,923,436 First and third round pick
$3,000,001 to $4,000,000 $3,923,437 to $5,231,248 First, second, and third round pick
$4,000,001 to $5,000,000 $5,231,249 to $6,539,061 Two first round picks and a second and third round pick
$5,000,001 and above $6,539,062 and above Four first round picks

A team may not have two different players sign offer sheets at the same time if the value of the offered contracts would involve any of the same draft picks as compensation. For example, if a restricted free agent accepts a contract with a yearly salary of at least $6,539,062, the team can only offer to other restricted free agents contracts less than $2,615,625 per year, since those would not require any first round pick as compensation. 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.

Effect of the salary cap

Prior to the 2004-05 NHL lockout, teams could spend as much or as little as they wanted, therefore most offer sheets were matched. This caused offers to restricted free agents to be rare to avoid ill will amongst general managers. Currently, under the rules of the 2005 NHL Collective Bargaining Agreement, teams have a salary cap ceiling and floor, so teams must spend money more wisely. This means it is more likely that general managers will offer a contract to a younger player with potential that their team does not see as much value in matching, rather saving money for other players. This also leads to teams signing their own players to long-term contracts before they are eligible for restricted free agency, possibly locking them in at a lower rate than they will have to pay later, depending on each player's future performance.

Players signing offer sheets

Footnotes

References

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