How long should young stars such as Alex Galchenyuk (left) and overall number one pick Nail Yakupov (center) and number two overall draft pick Ryan Murray observe the proceedings at the 2012 NHL Draft at CONSOL Energy Center. Mandatory Credit: Charles LeClaire-US PRESSWIRE

NHL CBA Issues – Rookie Contracts And UFA Timing


After looking at three other potentially lockout inducing issues over the past three weeks, there is yet another issue that could be a stumbling block to a quick resolution between the two sides.

The NHL is apparently looking to completely revamp the entry level contract as well as the age that players can qualify for Unrestricted Free Agency.   Currently, players sign mostly 2 or three year entry level deals depending on what league they are coming from.  According to rumors, the league wants to extend the entry level contract to 5 years.

They also want to extend the amount of service required to qualify for unrestricted Free Agency to 10 years.  Currently, players can become UFAs when they turn 27, or have 7 years of service, whichever comes first. Players like Tyler Seguin, Taylor Hall and Ryan Nugent-Hopkins who entered the league at 18 could become UFAs at the age of 25.

So on one hand, the league wants teams to be able to hang onto its young core players longer.  I understand that.  However, it seems to me like artificially setting the market and keeping prices down given the size of some recent “2nd contracts” like Erik Karlsson and Drew Doughty.  Whether the league wants to keep the entry level contracts flatlined as they seem to be now, or allow for some annual percentage raise would go a long way to determining which side of the fence I would fall on.  Keeping a star player at the same salary for 3 years is enough, but 5?  That seems too long.

However, the owners (by way of their GMs desperate to keep their jobs), have once again allowed the second contracts to spiral out of control in both length and salary.  The precedent has been set, when teams started “buying” the first few (or in some cases many) years of a players rights to UFA status.  These are the contacts that are driving the salary train, and the limit of 5 years on any contract could help that without extending the entry level deals.

Again, the solution lies in a compromise.

1. Keep the entry level deals at three years.

2.  Players gain unrestricted free agency after 8 years of service, regardless of age.

So essentially, a player who is a core player on a team should be able to sign their entry level deal, then a five year deal to take them to UFA stays.  Players who enter the league at 18 will get their UFA status at 26, but there is not a ton of those players out there.  Teams will no longer be able to overpay to buy a player’s unrestricted years.

The only hiccup would come when the second contract does not extend 5 years.  A player signing a 3 year 2nd contact after their 3 year entry level deals would be in the same position as they are now, except the number of UFA years a club could buy out would be capped essentially at a maximum of 4 years.  Even if you implement the exceptions I introduced last week (maximum of 2 6+ years deals per team), salaries would not rise as sharply between contracts as they are now for the big names coming off entry level deals.  Teams are going to save those exceptions for soon to be UFAs to get the superstars locked up long term, not someone coming off entry level whose options elsewhere are pretty limited.

 

Not being in the negotiating room, I cannot determine exactly what these two factors in combination are intended to do.  However, it is another case of management needing a set of rules in place to limit salaries instead of being able to stick to a budget.  Although it’s admittedly very difficult to stick to a budget when you are competing with someone who has two or three times the budget to work with.  Which is why the revenue sharing between the clubs is vital to any successful CBA agreement, bringing my arguments back full circle!

Let the negotiations continue!  And hopefully end quickly!

 

Previous CBA posts

 

Revenue Sharing between the team’s – part 1 and part 2

Splitting the Revenue Pie between players and teams 

Capping Contract length

 

Tags: NHL NHL CBA NHLPA ROOKIE CONTRACTS UNRESTRICTED FREE AGENCY