The Maple Leafs elected to have an arbitrator decide Jonathan Bernier's salary for next season. This process is adversarial and puts the outcome in the hands of a third party.
Why did the Leafs choose salary arbitration?
The Leafs filed for salary arbitration against Bernier almost as quickly as it was allowed. Bernier is a Restricted Free Agent (RFA) as defined by the Collective Bargaining Agreement (CBA).
We don't know how negotiations proceeded through the end of the season, but obviously both sides were far enough apart on term, money, or both, that the Leafs saw a risk that they would not otherwise get a deal done.
Bernier ask: $5.1M. TOR offer: $2.89M— Elliotte Friedman (@FriedgeHNIC) July 29, 2015
Bernier is coming off a two year deal where he earned $2.4M in 2013-14 and $3.4M in 2014-15, meaning an average for salary cap purposes of $2.9M. But the CBA says a club can request from the arbitrator a salary that is at a minimum 85% of the "prior year's salary" - as opposed to the average contract salary - and that's exactly what the Leafs did. While they are offering less salary than last year, it is still much more than in 2013. Since Bernier is eligible for Unrestricted Free Agent (UFA) status after this coming season, an arbitrated contract will be fixed at one year.
The Leafs' strategy here is clear: they want to transfer as much contract risk to Bernier as possible and believe they have maximum bargaining power to do this now and very little to lose by forcing arbitration.
Bernier's performance last season declined noticeably. He does not have a long NHL career track record so the Leafs are stuck with the question of whether last season was a blip, either caused by playing in front of a team that was defensively terrible, or because he is really not an above-average goalie.
What if last year was a blip, and Bernier has a stellar season on a one year arbitrated contract? He will end the season as a UFA and General Managers from around the league could come to him with briefcases stuffed with cash.
But the Leafs have cap space and lots of cash too. They can throw at him all the money they need to keep him, if he wants to stay. They will need to insist on starting negotiations for another contract well before the 2016 trade deadline. If Bernier won't play ball with the Leafs by then, he would be a great trade piece to a contender with a goaltending problem (injuries or an off-year).
What if last year wasn't a blip and Bernier's performance stays below average this season? The Leafs then lose nothing by having gone through arbitration.
Think about what could have happened if the Leafs didn't request arbitration. Bernier could sit out through to the start of the season and the Leafs would have only James Reimer and someone from the Marlies as a backup. Reimer is a bit of an unknown too at this point, coming off a bad season himself.
That's a lot of risk to the team, and the pressure at training camp would be enormous to just sign Bernier to any deal they could get. Every day that passed would make Bernier's bargaining position stronger, and he could throw all that contract risk back at the Leafs by asking for a long term deal, or the high value one-year deal an arbitrator is unlikely to award.
What happens at the hearing?
Make no mistake, this is a formal process that is described in detail over several pages in the CBA (Article 12, section 9 if you are interested). It's not like a cable news talk show with everyone shouting and arguing over each other.
The hearing will be on Friday, probably at 9am Toronto time. Bernier will be present but represented by someone, likely his agent or someone from his agency. The Leafs management will monitor, but will have an attorney or league representative on their side to make the case.
To keep it simple I'll just refer to Bernier and The Leafs.
The Leafs get to establish their case first, then Bernier can proceed with his. Then each side can make a rebuttal and offer a closing statement. Each side is allowed only 90 minutes total to talking time. If the Leafs feel Bernier has introduced new player comparisons or evidence in his last statements, there is an opportunity for an extra 10 minutes time to address those.
The discussion is limited to the following:
(A) the overall performance, including National Hockey League official statistics (both offensive and defensive), of the Player in the previous season or seasons;
(B) the number of games played by the Player, his injuries or illnesses during the preceding seasons;
(C) the length of service of the Player in the League and/or with the Club;
(D) the overall contribution of the Player to the competitive success or failure of his Club in the preceding season;
(E) any special qualities of leadership or public appeal not inconsistent with the fulfillment of his responsibilities as a playing member of his team;
(F) the overall performance in the previous season or seasons of any Player(s) who is alleged to be comparable to the party Player whose salary is in dispute; and
(G) The compensation of any Player(s) who is alleged to be comparable to the party Player.
The League and PA establish a list of valid comparable players and it is restricted to players on contracts signed when they were an RFA. Note that the arbitrator will only consider player comparisons that are actually mentioned by Bernier or the Leafs. He is not allowed to do his own research or pick out comparable players on his own.
Unlike a skater, there are far fewer stats to quibble over for a goalie. It's likely a lot of talk will focus on the comparable contracts around the league.
There are famous stories of teams making exaggerated statements bashing players right to their face, and calling them the worst player in the league. It's necessary to make as strong a case as possible and sometimes that's how they do it.
What happens immediately after the hearing is over?
Arbitrators have 48 hours to consider the arguments and deliver a ruling. The Leafs and Bernier can resume negotiating a contract immediately after the hearing is over, still unbound from any demands they made at the hearing. In 2013 P.K. Subban and the Canadiens inked an 8 year contract only a few hours after his hearing concluded, rendering the whole arbitration process moot. We will never know what his arbitrator would have decided.
Arbitrators don't always "meet them in the middle" either. They are free to choose any point in the entire range of proposed salaries. Earlier this month Alex Chiasson of the Ottawa Senators was awarded a $1.2M salary, slightly more than the Senator's request of $1.0M, but far less than his request of ~$2.5M.
Whatever happens, the minute the arbitrator emails his decision it is final and binding.
We will know Bernier's new contract no later than noon Sunday. UPDATE: It is possible the details may take longer to filter out to the public. I noticed that Alex Chiasson's arbitration award was not announced until almost 3 days after his hearing.