Offer sheet
Encyclopedia
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. However, unlike NHL offer sheets, NBA offer sheets do not require a team to relinquish a draft pick.
with his team, be it player- or team-filed.
, with percentage increases annually equal to the same percentage increase in the average salaries of all NHL players. The 2005 and 2011 offseason values are as follows, the latter based on an average NHL player salary of $2.3 million:
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 $7,835,220, the team can only offer to other restricted free agents contracts less than $3,134,089 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.
, 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; contracts cannot be renegotiated under the current CBA. A potential benefit to a player whose current team matches an offer sheet is that the player cannot be traded for the next calendar year.
Since the lockout, six restricted free agents have signed offer sheets, and only one player has changed teams as the result of an offer sheet: Dustin Penner
before the 2007-08 season
. Penner is also the only player since 1997 (Chris Gratton
) to change teams via an offer sheet). The risk invested in real and cap dollars along with the negative reaction to an offer sheet has led to the act of signing an offer sheet becoming rare under the current CBA.
National Hockey League
The National Hockey League is an unincorporated not-for-profit association which operates a major professional ice hockey league of 30 franchised member clubs, of which 7 are currently located in Canada and 23 in the United States...
, an offer sheet is a contract offered to a restricted free agent
Free agent
In professional sports, a free agent is a player whose contract with a team has expired and who is thus eligible to sign with another club or franchise....
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
National Basketball Association
The National Basketball Association is the pre-eminent men's professional basketball league in North America. It consists of thirty franchised member clubs, of which twenty-nine are located in the United States and one in Canada...
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. However, unlike NHL offer sheets, NBA offer sheets do not require a team to relinquish a draft pick.
Time period
Restricted (Group 2) NHL free agents can discuss new contracts with other teams beginning on the day after that season's entry draft, which is also the deadline for a team to make a qualifying offer. Discussions must cease if a player accepts a contract from his own team or is confirmed to go into arbitrationArbitration
Arbitration, a form of alternative dispute resolution , is a legal technique for the resolution of disputes outside the courts, where the parties to a dispute refer it to one or more persons , by whose decision they agree to be bound...
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 the next upcoming draft or drafts based on the averaged yearly salary of the contract. These values were originally set for the 2005 offseason to coincide with the new NHL Collective Bargaining AgreementNHL Collective Bargaining Agreement
The NHL collective bargaining agreement is the basic contract between the National Hockey League team owners and the NHL Players Association , designed to be arrived at through the typical labor-management negotiations of collective bargaining...
, with percentage increases annually equal to the same percentage increase in the average salaries of all NHL players. The 2005 and 2011 offseason values are as follows, the latter based on an average NHL player salary of $2.3 million:
| 2005 Averaged Salary | Current Averaged Salary | Draft Pick Compensation |
|---|---|---|
| $660,000 and below | $1,034,249 and below | No compensation |
| $660,001 to $1,000,000 | $1,034,250 to $1,567,043 | Third-round pick |
| $1,000,001 to $2,000,000 | $1,567,044 to $3,134,088 | Second-round pick |
| $2,000,001 to $3,000,000 | $3,134,089 to $4,701,131 | First- and third-round pick |
| $3,000,001 to $4,000,000 | $4,701,132 to $6,268,175 | First-, second-, and third-round pick |
| $4,000,001 to $5,000,000 | $6,268,176 to $7,835,219 | Two first-round picks and a second- and third-round pick |
| $5,000,001 and above | $7,835,220 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 $7,835,220, the team can only offer to other restricted free agents contracts less than $3,134,089 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; there were no offer sheets made in the six years prior to the lockout. Currently, under the rules of the 2005 NHL Collective Bargaining AgreementNHL Collective Bargaining Agreement
The NHL collective bargaining agreement is the basic contract between the National Hockey League team owners and the NHL Players Association , designed to be arrived at through the typical labor-management negotiations of collective bargaining...
, teams have a salary cap
Salary cap
In professional sports, a salary cap is a cartel agreement between teams that places a limit on the amount of money that can be spent on player salaries. The limit exists as a per-player limit or a total limit for the team's roster, or both...
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; contracts cannot be renegotiated under the current CBA. A potential benefit to a player whose current team matches an offer sheet is that the player cannot be traded for the next calendar year.
Since the lockout, six restricted free agents have signed offer sheets, and only one player has changed teams as the result of an offer sheet: Dustin Penner
Dustin Penner
Dustin Penner is a Canadian professional ice hockey forward currently playing for the Los Angeles Kings of the National Hockey League . Penner was never drafted by a team in the NHL. He was discovered and signed as a free agent by the Mighty Ducks of Anaheim after playing college hockey for the...
before the 2007-08 season
2007-08 NHL season
The 2007–08 NHL season was the 91st season of operation of the National Hockey League . It began on September 29, 2007, with the regular season ending April 6, 2008...
. Penner is also the only player since 1997 (Chris Gratton
Chris Gratton
Christopher A. Gratton is a retired Canadian professional ice hockey player who last played with the Columbus Blue Jackets of the National Hockey League...
) to change teams via an offer sheet). The risk invested in real and cap dollars along with the negative reaction to an offer sheet has led to the act of signing an offer sheet becoming rare under the current CBA.