Hockey contracts come in a dizzying array of types, and everyone is forgiven for getting mixed up about who is playing under what type of contract and what that means. This is particularly bad for teams like the Leafs where they own their AHL team and have some level of control over their ECHL team. It begins to seem like they just have an undifferentiated mass of players. But the differences have distinct meanings.
An NHL contract is exactly what it sounds like: a contract between an individual player and a specific NHL team. The standard player contract or SPC is the deal under which most players in NHL games are covered. For the details on the contract itself, and what is in it, you need this article:
The team a player signs a contract with doesn’t tell you where the player is playing once training camp is over. Many players are loaned to other teams. We usually use the term “sent down” to refer to loans to the minor leagues, but all of these transactions are loans. There are many NHL-contracted players in the AHL, and they are subject to all the rules of the NHL CBA — they are paid by their NHL teams and are eligible to play on the NHL team. There are a small number of NHL players in the ECHL as well.
There are many NHL-contracted players who have been loaned to European teams (with whom they also have a contract) or to junior hockey teams. NHL clubs cannot sign a player in the NCAA and loan them back. This is a violation of NCAA eligibility rules, so NCAA prospects are never signed to any kind of contract until they leave school.
There have been somewhat rare events where NHL-contracted players are loaned to an AHL team affiliated with another NHL club. Sam Gagner is under contract to the Vancouver Canucks, but plays for the Marlies this season. Buffalo has loaned Matt Moulson to the Ontario Reign for two seasons. These players are only eligible to play for the NHL team that they are under contract to, not the affiliate of the AHL team they are playing on.
All new players coming into the NHL must be signed to an entry-level contract (ELC) if they are under 25 years old. The term of an ELC is one to three years, based on age at signing.
ELCs can contain performance and signing bonuses and can also “slide”. Players on ELCs who play outside the NHL (minors, junior, Europe), and who meet the age limits can have their contract slide for that year so they are not paid their salary and the term of their contract extends by a year. They are paid their signing bonus, however.
One-way and two-way contracts
NHL contracts come in two types: one-way and two-way. The most important distinction here is that a player on a two-way contract is paid differently in the minor leagues to the NHL. A one-way deal has only one salary amount.
There used to be differences in the waiver rules as well, but that changed in the last CBA. You’ll still find old articles and new comments that state that a player on a two-way contract is always waiver exempt. This is wrong, but it persists as a belief.
There are some other subtle differences: The calculation of offseason cap space considers two-way deals differently, for example, and arbitration rules consider the type of contract in the structure of awards.
All ELCs are two-way, and the minor league salary is capped at $70,000.
Garret Sparks current contract illustrates how salary works on two-way vs one-way deals.
He signed the deal in summer of 2017, and it was for two years. The first year was a two-way deal that paid (salary, not cap hit) $650,000 in the NHL and $200,000 in the AHL. In addition, the contract had a clause that guaranteed his minimum salary at $250,000. This sort of clause exists to bump up the salary on a player who is expecting to play in both leagues or to incentivize the NHL team to call him up.
Of, course, as we know, Sparks played no NHL games in 2017-2018. He was paid a very small amount at his NHL salary rate, however, as he was called up for some days when Frederik Andersen was ill. He would have, at some point, been paid enough extra to bring him to the $250,000 amount.
In the second year of his deal — this year — the contract becomes one-way and pays $700,000 no matter where he plays.
Most of the NHL-contracted players on the Marlies are either on one-way deals or ELCs. But the highest paid player on a two-way deal is Kasimir Kaskisuo at $100,000 in minors salary.
There are two reserve lists for players on NHL contracts. The first is the so-called 50 SPC limit. All NHL teams are limited to 50 SPCs active at any one time for players signed to NHL contracts. This number is based on the contract year which runs from July 1 to June 30, so a player signed in April to a contract that takes effect for the next season does not use an SPC slot until July 1.
The only current-season contracts that are exempt from this limit are players loaned to junior hockey teams. Cap Friendly also lists some European players as exempt from the limit when they are loaned to men’s teams in European leagues. This is not the same thing as an ELC slide. A player can be too old to have their contract slide and still be exempt from the SPC limit.
Any contract for a player on LTIR, like Nathan Horton for example, still counts as an SPC against the limit until the contract expires.
The second reserve list is capped at 90 and includes everyone on the first list plus all players the NHL team holds exclusive signing rights to. This essentially means all the un-signed draft picks. There are a few other players who might show up on the 90-man list. Miro Aaltonen, who was signed by the Leafs, played out his ELC, and then returned to the KHL, is on that list because he left as an RFA, and the Leafs hold his NHL signing rights.
An AHL contract is a deal between the player and an AHL team. Players on NHL contracts who play in the AHL are not on AHL contracts.
There are many similarities between AHL and NHL contracts but much less publicly available information. Most dollar amounts on AHL deals are never made public, but it is broadly known that the pay rates, particularly for top-quality AHL players, have been rising as teams with enough money to spend push the salaries up.
The AHL has a players’ association and a CBA. That agreement runs out this summer, so it needs to be renewed. For the 2018-2019 season, the minimum salary in the AHL is $47,500 US. That amount has increased every year under the current agreement, and in the 2017-2018 season, all salaries were paid in US dollars for the first time. Prior to that year, Canadian teams got to pay in Canadian dollars and had a separate minimum. This kept them from being victims of fluctuating exchange rates, but sometimes the minimum, set when the CBA was created, became wildly out of line with reality.
Unlike in the NHL, where salaries are paid over the regular season only, all players on the AHL roster share in a pool of funds for playoff appearances based on games played.
AHL players can be traded or loaned to other AHL teams and can be loaned to other minor leagues, usually the ECHL. The AHL does have one- and two-way contracts, which contain two salary rates exactly like they do in the NHL.
Because the AHL is the league in the middle, they receive players on loan coming up from the ECHL. Those players are paid a minimum salary of $48,000 Canadian this season. For some reason, there is still two minimums depending on country for this circumstance. At current exchange rates, the Canadian dollar minimum is $2,000 lower than the US dollar amount converted to Canadian funds.
There is no salary cap in the AHL, no maximum salaries, no roster size limits until the playoff roster is set, and no control on salary inflation beyond the willingness of teams to spend money. With most NHL teams owning their AHL affiliate outright or in partnership with another owner, the expenditures of the teams are no longer dependant on revenues like ticket sales. If the NHL team thinks it’s a good idea, they can subsidize their AHL team as much as they want.
With the upward pressure on AHL salaries, either from AHL contracts or in NHL deals for full-time AHL players, the cap on the AHL salary portion of an ELCs makes the top prospects, who are often some of the best players in the league, some of the worst paid players on their AHL teams. Only the ECHLers on a loan routinely get much less.
The ECHL also has a players’ association and a CBA, but the league is structured in very different ways to the AHL.
Players in the ECHL might be on loan from either an AHL or NHL team, and they are subject to those contracts and CBA rules and are paid the salary set in that contract for.
For players under contract to the ECHL, life is very different to the other leagues. The League has a salary cap that runs on a weekly basis, and they have strict roster limits. The 20 players on the active roster cannot exceed $13,000 US in total compensation on the week. That includes AHL players who have been sent to the team.
There is another capped amount for rookies, who are players who have played less than 25 professional games. They can’t receive more than $550 US per week.
Like the AHL, ECHL players continue to be paid during the playoffs, and you can see why. They’d run out of money for food if they weren’t. The ECHL is required to provide accommodation for players, which mitigates the low salaries somewhat.
If you assume an ECHL season is approximately 30 weeks, the average player is making less than $20,000 US to play professional hockey and a rookie makes $16,500 US at most.
Most ECHL teams are independent operations that rely on ticket revenue to cover costs, and the salary cap isn’t out of line for the amount most teams can genuinely afford to pay. No team is generating millions in revenue in the ECHL like Canadian junior hockey routinely sees.
Try-out deals, nearly always called ATOs and PTOs (A is for amateur and P is for professional) are short-term deals that pay a per-diem and expire after 25 games played. They can be renewed, however. The most common use for these contracts is for professional players looking for AHL or NHL jobs in the early part of a season and for amateur players, usually graduating juniors, looking for AHL or ECHL jobs in the spring.
Drafted prospects from junior hockey or Europe can play on AHL or ECHL teams under an ATO when their other hockey season is over. NCAA players cannot unless they have finished college hockey.
In very rare instances, players will appear deeper into the regular NHL season than the first few games while still on a PTO. The team would have to be careful the league didn’t consider it cap avoidance, and the player would have to willing to play for what amounts to free in the NHL, so it doesn’t happen often.
Moving Up a League
Loans down from the level a player is contracted at are fairly simple. Loans up are more complex. To go from the ECHL to the AHL, all a player needs is a try-out agreement if it’s a short-term situation. For a long-term loan, the player is usually just signed to an AHL SPC mid-season.
To go from the AHL to the NHL, the player has to be signed to an NHL SPC. So the AHL-contracted players on the Marlies are not going to suddenly show up on the Leafs. This rule gets elasticized in training camp, and preseason games are often full of AHL-contracted loaners.
This article skims the surface of contracts in hockey. There are all sorts of rules about travel, reimbursement for meals and expenses, health insurance, etc. For almost every rule, there are exceptions and nuances that space doesn’t allow me to go into here. The AHL and ECHL CBA are not publicly available in their entirety. For most NHL CBA nuances, the place to begin is the Cap Friendly FAQ before you dig into the CBA itself.