Offer sheets aren’t a new concept in the NHL. Restricted free agents have the right to sign with any team that will take them as long as the team is willing/able to pay the compensation for the player. The problem with offer sheets is that a lot of GMs see them as taboo. Fear of retaliation (see Vancouver/St. Louis circa 2008), the loss of draft picks and criticism from other teams has lead to only a handful of offer sheets over the past 10 years. Since 2006 there have been a total of 8 offer sheets to RFAs and in each case except for Dustin Penner the original team matched the offer sheet.
What we haven’t seen yet is a dual offer sheet. The concept is pretty simple and I’ll break down the basics. If you want more detail around the dual offer sheet, Derek has written about it here, here and here.
Offer Sheet Compensation
Before going too far into the explanation the first thing to understand is how teams are compensated should they decide not to match an offer sheet. This information is for 2015 only and is adjusted every season before free agency starts.
|Average annual value||Compensation|
|Less than $1,205,377||Nothing|
|$1,205,377 to $1,826,328||Third-round pick|
|$1,826,328 to $3,652,659||Second-round pick|
|$3,652,659 to $5,478,986||First and third-round picks|
|$5,478,986 to $7,305,316||First, second and third-round picks|
|$7,305,316 to $9,131,645||Two firsts, a second and third-round picks|
|$9,131,645 or greater||Four first-round picks|
How It Works
I am going to use 2 hypothetical teams and 2 hypothetical players to give the quick run down.
- League Salary Cap $50M
- Team A (Kangaroos) - Offering Team ($38M)
- Team B (Whales) - Original Team ($45M)
- Player A (Smith) - 3rd line player
- Player B (Norton) - 2nd line player
More on Dual Offer Sheets
More on Dual Offer Sheets
The Kangaroos, knowing that the Whales are close to the salary cap and still have a few players to sign offer Smith a $3M/yr for 1 year contract. Smith isn’t necessarily the Kangaroos’ first choice but they need him in order to sign their preferred choice, Norton. Smith still has value and even though $2M is an overpayment it's not too much of an over payment so even if the Whales don’t match the offer, it isn’t a total loss.
Knowing that the Whales need to sign at least 5 more players or at the very least call up players from the AHL, the Kangaroos offer Norton a $5M/yr contract (set the term at whatever you want). This forces the Whales to give up at least, if not both, of these players. The offer sheets have made the Kangaroos better and the Whales get a 1st, 2nd and 3rd round pick in the next year’s draft.
I mentioned earlier that a dual offer sheet scenario hasn’t occurred since the new rules were introduced in 2005 but there was a situation that was close. In the third round of the 2010 Stanley Cup playoffs the San Jose Sharks had been eliminated quite handily by the Chicago Blackhawks. San Jose was about lose it’s number 1 goalie to free agency and their number 2 wasn’t ready to take on the number 1 job.
Antti Niemi was a RFA but the team had elected to go to arbitration. Chicago was already quite close to the salary cap thanks to a blunder by previous GM, Dale Tallon, when the qualifying offer cut-off was missed and the Blackhawks ended up having to sign RFAs at UFA prices. Since Niemi was going to arbitration the Sharks had to target someone else. They targeted a player that wouldn’t hurt them if the Blackhawks had decided not to match the offer sheet. On July 9, 2010 the NHL announced that San Jose had signed Niklas Hjalmarsson to a 4 year contract worth $14M.
Chicago decided to match but by matching they would be unable to resign Antti Niemi. In arbitration Niemi was awarded $2.75M but thanks to salary cap issues the Blackwaks had to walk away from Niemi making him a UFA. San Jose swept in and offered Niemi $2M and got the goalie they needed.
What does this Mean to the Oilers?
Funny enough the same team has put their neck into the salary cap noose once again. This time by tying up $41.3M in eight forwards, $15.4M in three defensemen and $6.6M in two goaltenders Chicago have placed themselves into another salary cap bind. The salary cap is projected to be around $73M, Chicago has already spent ~$63M and only have 13 players signed add in another $925K for Trevor van Riemsdyk and Chicago only has $8.1M to spend on 8 roster spots. Spending just over $1M per player is tough enough but Chicago has an even bigger hurdle to overcome, they still have to qualify and resign two RFA forwards, Marcus Kruger and Brandon Saad.
Kruger is a regular 3rd/4th line centre. Over the past three seasons he’s started only 19.05% of his shifts in the offensive zone while maintaining a 52.9% corsi. His best comparable player in the NHL is Jarret Stoll (their numbers are eerily similar) but because to the "different" roles they play Kruger may be that much cheaper to obtain.
Kruger will obviously be looking for a raise but the nice thing about a player making $1.325M is that a raise can be as low as $2M. Obviously a $2M offer will probably mean that Chicago will match it so raising it to $2.5M or even $2.6M may be required. As outlined in the compensation chart any of these offers will only cost the Oilers a second round draft pick. The other thing this does is allow the Oilers to shop Boyd Gordon or at the very least include him in a package deal to obtain a defenseman.
Saad is an interesting case, he is coming off of an ELC which priced him dirt cheap. He is due for a raise but because of their cap situation I could see Chicago trying to low-ball him. A low-ball qualifying offer would make the opportunity for an offer sheet very appealing to both Saad and any team in the NHL. Saad’s closest comparables are pretty nice and also place him almost perfectly into the next compensation level.
The contract offer for Saad is going to be on the higher end especially if the plan is to protect Saad from Chicago matching the offer but an offer above $4.5M but lower than $5M might work. Signing Saad, especially at sub $5M, also means that the Oilers can entertain trading Jordan Eberle for help on defense or possibly in net. Plus at sub $5M they free up an extra $1M in cap space.
If this scenario were to happen what would the Oilers’ salary cap situation look like? As I stated earlier the salary cap is projected to be around $73M this up coming season. The Oilers currently have 18 players under contract, 13 forwards, 4 defensemen and a goalie and they are sitting with approximately $21M in cap space. If the above scenario were to play out as outlined and Chicago was unable/unwilling to match either of the offer sheets the Oilers would have 20 players signed, at approximately $60M leaving them with $13M to fill out the rest of the roster. Even though the defense & goaltending is a dog’s breakfast at least the forward group would be pretty much completed and competitive for a few years to come and could make attracting defensive talent a lot easier as well.