Fundamentals of the NHL’s Free Agent System

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In the NHL, free agency dates to 1972, when the league granted players some restricted rights, but it wasn't until 1995 that players got the right to unrestricted free agency. The 2013 collective bargaining agreement, which is a 10-year agreement, lays out the rules on NHL free agents. 

Unrestricted NHL Free Agents

Here is the breakdown of some of the key rules governing the NHL's unrestricted free agents:

  • The 27-or-7 Benchmark—Any player whose contract has expired can declare himself an unrestricted free agent if he is at least 27 years old or has at least seven years playing as an NHL player.
  • The Free Agency Period—Free agency begins on the first day of July. At that point, an unrestricted free agent is free to negotiate and sign a contract with any NHL team. In the negotiations for the most recent CBA, the NHL sought to move the beginning date to July 10, but the union resisted.
  • Free Agent Interviews (last updated in 2013)—Unrestricted free agents may meet and interview with potential new teams from the day after the NHL Entry Draft (but not later than June 25) until June 30.
  • Seven-Year Maximum (last updated in 2013)—A term limit of seven years is set for contracts signed by unrestricted free agents.
  • No Compensation—Teams losing unrestricted free agents do not receive any compensation. Under the collective agreement that existed prior to 2005, teams received draft picks as compensation.

Restricted Free Agents

Players who are no longer considered entry-level but do not qualify as unrestricted free agents become restricted free agents when their contracts expire.​

The current team must extend a "qualifying offer" to a restricted free agent to retain negotiating rights to that player. For an offer to be qualifying:

  • Players who earned less than $660,000 in the previous season must be offered 110 percent of last season's salary.
  • Players making up to $1 million must be offered 105 percent.
  • Players making over $1 million must be offered 100 percent.

If the team does not make a qualifying offer, the player becomes an unrestricted free agent. If the player rejects a qualifying offer, he remains a restricted free agent.

Offer Sheets and Restricted Free Agents

An offer sheet is a contract negotiated between an NHL team and a restricted free agent on another team. The offer sheet includes all the terms of a standard player contract, including length, salary, and bonuses. A player who has signed a qualifying offer or is going to salary arbitration with his original team cannot sign an offer sheet.

Key elements of offer sheets include:

  • Accept or Decline—When an offer sheet is signed, the player’s current (original) team is notified. That team can keep the player under the terms of the offer sheet, or decline and let the player join the new team under those terms. The original team has seven days to make its decision.
  • No Turning Back—Once a player signs an offer sheet, the original team cannot negotiate a new contract under different terms or trade the player’s rights. Its only options are to accept or decline the offer sheet.
  • The No-Trade Clause—If the original team chooses to accept, or match, the offer sheet, the player cannot be traded for one year.
  • Compensation—If the original team declines the offer sheet and loses the player, it receives draft picks from the player’s new team as compensation. Compensation for losing a restricted free agent is on a sliding scale, depending on how much the new contract is worth. The exact numbers change every year. The most a team can lose for signing an RFA is four first-round draft picks.

Salary Arbitration and December 1 Deadline

A team or player can file for salary arbitration as a mechanism to settle contract disputes. A team can take a player to arbitration once in his career and cannot ask for a salary reduction greater than 15 percent. Players can ask for salary arbitration as often as they want.

Restricted free agents must sign NHL contracts by December 1, or they are not eligible to play in the NHL for the rest of the season.