Each year the NHL sets new limits for offer sheet compensation based on the Average League Salary, which they usually release just as the Conference Finals get going. With these limits in hand, you can make up all sorts of offer sheet scenarios.
The new compensation limits are:
But wait, there’s a couple of things you need to know first.
- NHL teams cannot negotiate with a player by offer sheet until 5 p.m. on June 26. That’s the usual date, but I can’t find a replacement one in the new CBA MOU, so that’s a mystery yet to be solved. The player cannot sign that offer sheet until October 9, however, which is the start of free agency.
- Always helpful to remember the subject - verb - object of offer sheets. A team does not offer sheet a passive player; rather, the player signs an offer sheet from a team.
- If the player (but not his team) elects arbitration, he cannot sign an offer sheet.
- The team submitting the offer sheet has to have all of the required compensation picks, and they have to be their own picks. They have to be picks for the next draft (so 2021) unless they are required to have two picks from the same round. Then they can have two of the next three year’s picks to offer.
- The team has to have offseason cap space at the time the offer sheet is issued to the league to cover the contract.
- And now for the calculation of the AAV:
The compensation limits are the total compensation of the offer sheet averaged over the length of the contract to a maximum of five years. Here is an example to explain this: If Mat Barzal signs an offer sheet for 7 years at 10 million, that seems at first look to require two first-round picks, one second and one third.
But that $70 million has to be divided by 5, so it’s actually an AAV of $14 million, and is a top-tier, four first-round picks compensation offer sheet.
Now, you’re ready to go make up offer sheet scenarios. For your convenience, the wonderful CapFriendly has a calculator for you to use.