The NHL Offer Sheets Unwritten Rule

As we are down to two teams facing each other in the Stanley Cup finals, we are also about a month away from the NHL Draft and the Free Agents’ frenzy. Teams will be allowed to speak to pending UFA’s and RFA’s of other teams starting the day after the Draft, which will be held at Rogers Arena in Vancouver on Friday, June 21st and Saturday, June 22nd. So starting bright and early on June 23rd, NHL GM’s will be trying to lure away some players whom they feel would help improve their respective team and on July 1st, they can sign them to a contract. While recent history has proven to be better known for the Unrestricted Free Agents period, each and every year, media and fans alike are wondering if finally, a GM or two will have the courage to sign a player to an offer sheet.

First of all, we must understand what an offer sheet is and who is eligible to sign such offers. An offer sheet is a contract offered to a restricted free agent (RFA) 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. Restricted (Group 2) NHL free agents can discuss new contracts with other teams beginning on the day after the 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 if he is confirmed to go into arbitration with his team.

The last offer sheet which ended up being unmatched was the signing of Dustin Penner by the Edmonton Oilers on July 26, 2007. Brian Burke and the Anaheim Ducks decided that the 5-year, $21.5 million offer was too rich for their blood to match and instead, accepted the 1st, 2nd, and 3rd round picks in 2008 as compensation. But it didn’t take more to fire up Burke who went into a very public verbal dispute with then Oilers’ General Manager Kevin Lowe.

“I like Kevin Lowe and I respect Kevin Lowe. But what he did was just so stupid to me and I fried him and then he challenged me to a fight on the air.” ~ Brian Burke

The next offer sheet – or should I say offer sheets – occured the following off-season when the Vancouver Canucks, then managed by rookie GM Mike Gillis, signed David Backes of the St. Louis Blues to a 3-year, $7.5 million contract. The Blues matched and then GM Larry Pleau went a step further by getting revenge on the Canucks a week later by signing pending RFA Steve Bernier to a one-year, $2.5 million deal. The Canucks also matched but they ended up paying Bernier much more than they wanted to because of it. It is important to note that Gillis has since been fired and so far, has never been hired as GM while Pleau resigned from the position in 2010, two years after the offer sheets were exchanged.

Shea Weber’s current contract was the results of an offer sheet by the Philadelphia Flyers, matched at the time by the Predators.

Since then, there have been only three (3) more offer sheets signed by NHL General Managers and the most lucrative all-time was when Philadelphia Flyers’ GM Paul Holmgren tried to scoop All-Star defenseman Shea Weber from the Nashville Predators, signing him to a 14-year, $110 million offer sheet. Preds’ GM David Poile ended up matching the offer which finally ended up forcing them to trade away Weber when a $13 million signing bonus, due on July 1st, 2016, was too rich for the ownership’s pockets.

PLAYERDATEOFFER AMOUNTORIGINAL TEAMOFFER TEAMRESULTSNOTES
Ryan Kesler2006-09-121 yr – $1.9MCanucksFlyersMatched
Thomas Vanek2007-07-067 yrs – $50MSabresOilersMatched
Dustin Penner2007-07-265 yrs – $21.5MDucksOilersAccepted1st, 2nd, and 3rd round picks in 2008
David Backes2008-07-013 yrs – $7.5MBluesCanucksMatched
Steve Bernier2008-07-081 yr – $2.5MCanucksBluesMatched
Niklas Hjalmarsson2010-07-094 yrs – $14MBlackhawksSharksMatched
Shea Weber2012-07-1814 yrs – $110MPredatorsFlyersMatched
Ryan O’Reilly2013-02-282 yrs – $10MAvalancheFlamesMatched

A tool under-utilized?

Players want the offer sheets to be used as it helps them bring the salaries up for everyone. Fans want to see this tool used more because it would generate some additional excitement with the potential of player-movement. But why isn’t it used more if it’s “legal” under the terms of the collective agreement? There are at least three very legitimate reasons why no offer sheet has been signed since 2013… and don’t think for a second that there hasn’t been any quality RFA’s available on the last six years!

1- Hard Salary Cap

As a GM, you have to contend with either the hard salary cap imposed by the league if you manage a team spending to the ceiling, or you have your own internal salary cap set by the owners if you’re running more of a budget team. Either way, in order to stand a chance to sign a player to an offer sheet with your team, the GM will have to go at least slightly above “market value”, or what the team owning the player’s rights is willing to pay him. In both case, whether you – or any other GM – sign a player to an offer sheet, it raises the average salary and cuts back on somewhat “cheaper labour”. Further, it inflates the salaries of similar production players around the NHL, including your own, in their next negotiation.

2- Steep Compensation

In order to sign a player to an offer sheet, a GM must, first and foremost, have the necessary picks to be able to compensate the other team in the event that they chose not to match the offer. For one thing, the picks must not only have all of the necessary picks, but they must be their own, not picks acquired through trades with other teams.

Here are the teams capable of signing offer sheets based on salary compensation:

Source: CapFriendly.com

So as you can see, a top-end player signed at $8.5M AAV per season costs four picks including two first rounders. Signing a player with an offer sheet of over $10.6M AAV would leave the team without a first round pick for the next four years!

Here’s an important twist however, that many don’t know… The compensation limits are the AAV of the offer sheet averaged over the length of the contract to an upper limit of five years. Here is an example to explain this: If a team signs a player to an offer sheet for 7-years at 10 million ($10M AAV), that seems at first look to require two first-round picks, one second and one third, right? That’s not the case! That $70 million has to be divided by five, so it’s actually an AAV of $14 million, and is a top-tier, four first-round picks compensation offer sheet.

3- Fear of Retribution

This is perhaps the point the most overlooked by media members and fans alike yet, it might just be the single most important point for NHL teams and their General Managers. Paul Holmgren admitted that he was forced to step down from his position as GM of the Philadelphia Flyers because of the offer sheet he signed Weber to. Why? Because no one wanted to do business with him afterwards. He was on the “blacklist” amongst NHL GMs.

Paul Holmgren admitted having to step down as Flyers’ GM because no one wanted to deal with him after signing Shea Weber to an offer sheet.

“It’s hard to do this job if you have a bad relationship, or at least a perceived bad relationship, with any number of GMs.” ~ Paul Holmgren

Unlike any other year, this summer’s list is very interesting, to say the least. I like sorting them by time on the ice per game as it often shows how valuable those players are already, gauging by how much they were counted on by their coaches. Feel free to click the link below the picture to sort them as you with on CapFriendly.com.

Source: Capfriendly.com

To get a full picture, one would have to take the time to look at teams individually and see how many NHL contracts they each have, how many pending key UFA’s and RFA’s they have to re-sign, and how close they are to the Salary Cap to determine how many teams in total would be capable of signing a RFA to an offer sheet which would either guarantee them the player, or at least put the other team in a tight spot if they chose to match the offer.

“When you sit in this chair, you’ve got to think long-term also,” Bergevin said at his end-of-season presser, noting the steep price tag of four firsts. “Trust me, it’s a tool [the offer sheet] that we look at all the time.”

While everything is possible, it is unlikely to see Marc Bergevin sign a player to an offer sheet.

That said, rest assured Habs’ fans, Marc Bergevin was being politically correct with this quote and he is very unlikely looking at the offer sheet tool as a serious option if he wants to keep a job as GM in the NHL. While very competitive and even cut-throat at times, NHL GM’s are a tight brotherhood and coaches and GM’s are being blacklisted from time to time. Pleau, Gillis and Holmgren found out the hard way, Ted Nolan has never been offered another job in the NHL (aside from a short stint back with the Sabres in 2013) after throwing his then GM John Muckler under the bus and Patrick Roy, after putting Joe Sakic in a bind by quitting late in the summer, has yet to return to the NHL in any functions.

I’ve said it before and I’ll say it again: the way for Bergevin to address his biggest need for a top-4 left-handed defenseman would be through trade. He will be going hard after Matt Duchene though. The ideal summer for Bergevin and the Habs would be, in my humble opinion, if he signs pending UFA Matt Duchene and trades for a top-4 left defenseman to play tough minutes with Weber. At the very least, he MUST finally address the need for that elusive defenseman. Anything short of that would be a huge disappointment. Go Habs Go!

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Timmins and Churla: The Drafting Kings

Hakuna Matata! What a wonderful phrase. Hakuna Matata! Ain’t no passing craze. It means no worries, for the rest of your days. It’s our problem-free philosophy: Hakuna Matata! Yeah, sing it, kid! It’s our problem-free philosophy: Hakuna Matata!

What a great motto! Fans – and sometimes media members – tend to worry too much. Yes, that’s an understatement but hear me out. We keep reading and hearing that Montreal Canadiens’ Assistant General Manager Trevor Timmins is terrible in his role, people only citing some of his draft misqueues. Often times, in order to differentiate the forest from the trees, one must take a step back… or two… or oven three as we can’t see what’s right in front of our nose. You want to be critical of Timmins? That’s fine. But at the very least, compare him to his peers, not to some preconceived narrative, or by listening to what you’ve been told by some biased, disgruntled, attention-seeking individuals. Wow! Now there’s a new concept!

This is not the first time that we try to analyse his work as we have touched before on Timmins’ overall performances, which placed him at the top of his class since he took over that position in Montreal in games played by players he had drafted. But then, it was pointed out that he is particularly struggling in the first two rounds of the draft, which we also researched on this very blog site. Then again, particularly in the second article, we didn’t really compare him to the rest of the NHL.

Trevor Timmins has a lot of reasons to smile.

Let’s just demystify Timmins’ work in the first two rounds and see exactly where he and Director of Amateur Scouting Shane Churla rank amongst their peers since 2003. For this exercise, I started tabulating up until 2013 as for every team, as the 2014 picks have several players who are just starting their career in the NHL so it’s too early to classify them as success or “flop”.

It is important to note that by “flops”, I used the same criterias for all teams: how are these players doing based on their drafting ranks, the number of NHL games played compared to their peers from the same draft year, and overall production. I was quite lenient for all teams. For example, if a first rounder played 200+ games, I didn’t consider them as “flops” even if their offensive numbers weren’t that great… unless they were a top-5 pick.

Admittedly, this type of analysis is very fluid, even quite murky at times and far from a top scientific go-to guide. But at the very least, it’s a measure of comparison with all teams in the NHL. You will also notice that I didn’t include the Winnipeg Jets, who started drafting in 2011, or of course the Vegas Golden Knights.

First Round

In this table, let’s only look at the columns with the yellow heading, the first round picks. The team with the fewest first round selections between 2003 to 2013 are the Detroit Red Wings with only five picks and their only “flop” was in 2008. Every other first round pick has turned out to be a decent NHL player. The Anaheim Ducks, Edmonton Oilers and Arizona Coyotes, on the other hand, have had 14 first round selections each. Only two of Anaheim’s 14 picks turned out to be “flops”, in 2006 and 2007.

As you can see, the league success rate average is 68,55% (100 flops out of 318 picks). The Habs are slightly above average at 72.73% success rate with three flops in the first round: David Fisher (2006), Louis Leblanc (2009) and Jarred Tinordi (2010). I did not include Michael McCarron in there (yet) as he showed some great signs this season until he was injured. Nothing to write a book about, but Timmins isn’t as bad as some make him out to be in the first round it seems.

Second Round

In the second round (blue columns header), the league’s success rate drops to 33.53%. The San Jose Sharks lead the pack with a 55.56% success rate while the New York Islanders, Vancouver Canucks and the Philadelphia Flyers are all below 20%. Note that the Chicago Blackhawks had the most second round picks from 2003-2013 with 21 selections, while the Calgary Flames only had five.

Somewhat surprisingly, the Canadiens find themselves 4th in the entire NHL at 45.45% success rate in the second round. They messed up on Cory Urquhart (2003), Ben Maxwell and Mathieu Carle (2006), Danny Kristo (2008) and Sebastian Collberg and Dalton Thrower (2012). GM Marc Bergevin did turn out Collberg into Thomas Vanek for a playoffs’ run however.

Combined

And that’s where we see the ensemble of the NHL’s teams’ draft work in the first two rounds. The league average sits at 50.46% success rate as the Chicago Blackhawks topped everyone with a total of 33 picks, followed by the St. Louis Blues with 29, and the Washington Capitals and Florida Panthers close behind them with 28 picks each. Amazingly enough, only 11 of the Capitals’ 28 picks are considered “flops”, putting them second in the rankings at 60.71% success rate. The LA Kings lead the NHL at 62.50% while the Philadelphia Flyers rank third, thanks to an amazing first round success rate of 88.89%.

Fourth overall is where the Canadiens and Trevor Timmins sit, with a very impressive success rate of 59.09% in the first two rounds of the draft. While this may (or may not) be enough to debunk the misconception of Timmins’ work, at least it is somewhat supported by information other than perception and dislike for the guy.

Most people will agree that his last couple of draft seasons, which include the likes of Noah Juulsen(2015), Mikhail Sergachev (2016), Ryan Poehling, Josh Brook, Joni Ikonen (2017), Jesperi Kotkaniemi, Jesse Ylonen, Alexander Romanov and Jacob Olofsson (2018) will go a long way in bringing the Habs closer to the top of the league in the first two rounds. Here’s hoping that Timmins and his team can repeat again this coming summer in Vancouver, with three more selections in the first two rounds. Go Habs Go!