RFA Compensation, 2007-08

Discussion in 'The Business of Hockey' started by TomWaits, Jun 21, 2007.

  1. TomWaits

    TomWaits Registered User

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    Sorry if this has been discuss a 1000 times. Can someone post the information for me.
    thanks

    TomWaits
     
  2. Irish Blues

    Irish Blues Still on hiatus

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    Do you mean, "received before July 1 so what's the penalty" or "receives an offer sheet after July 1 and the original team doesn't match, what's the compensation due?"

    In the first case, the offer sheet would be rejected by Central Registry and would clearly constitute tampering ... so I'll assume you didn't mean that.

    In the second case:


    The amounts listed adjust up at the same rate as the Average League Salary increases - so if the ALS goes up 10%, the thresholds become $726,000, $1.1 million, $2.2 million, and so on. [Once the NHL announces the new guidelines, I'll update this accordingly.] The amount of the offer sheet for the table above is the average value of compensation proposed in the offer sheet (determined by dividing the total compensation by either the number of years specified or 5 - whichever is less).

    Thus, a player who signs a 4-year, $20 million offer sheet is considered to have an average value of $5 million for the table above; a player who signs a 6-year, $30 million offer sheet is considered to have an average value of $6 million for the table above.
     
    Last edited: Jun 25, 2007
  3. Irish Blues

    Irish Blues Still on hiatus

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  4. abev

    abev Registered User

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    IB, with respect to the compensation picks, how is it determined when the picks are given back as compensation?

    Does the team giving up the picks have any say when the picks are (which year?) or will they be forced to give them in order that they have them?

    I also would assume that if a team does not have a pick in that round the compensation would have to come from a different year?

    It could be possible that, before signing a player to an offer sheet, a team positions itself by trading away one of its future picks.

    Work with me here: Team A gives a offer sheet to Zach Parise for $3.5 mil and will have to send the Devils a 1st and a 3rd in the 08 draft. But before doing that, Team A trades their 3rd in 08 for Team B's 3rd rounder this year. Then Team A would give the Devils their 3rd round pick in 09.

    Would seem like a smart way to avoid losing too many picks.
     
  5. Irish Blues

    Irish Blues Still on hiatus

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    From the last part of Article 10.4: (important points in bold)

    I think that answers all of your questions.
     
  6. abev

    abev Registered User

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    I dont want to acquire picks to use as compensation, I want to trade away a pick before I give the offer sheet.

    If I know I am going to offer a play an offer sheet, and I know that I will have to give up picks, can't I protect myself by making a trade days before just to ensure that I will still have prospects in the system?

    If I am going to lose a 1st and a 3rd next year, can't I trade my 3rd in 08 right now for a player on another team(prospect).

    The trade is under the assumption that the player I traded for would in effect be a replacement for the 3rd rnd pick I will lose for next year.

    Losing a first and a third in one draft is a hit. But losing a first in 08 and a 3rd in 09 is tolerable, assuming the player that I gave the offer sheet to was a good player.
     
  7. Irish Blues

    Irish Blues Still on hiatus

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    Hence the, "picks must be available in the next draft" statement. The answer to your idea: no. The "3rd in '08" would not be available, and thus the offer sheet wouldn't be processed by Central Registry b/c the required picks aren't available.
     
  8. abev

    abev Registered User

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    Got it IB, thanks. Next draft - thats the key. I read right past it.
     
  9. kdb209

    kdb209 Registered User

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    Based on that link, the thresholds for compensation increased by 18%.

    From that we can infer that the Average League Salary increased by 18% from June 30, 2006 to June 30, 2007:

    It does NOT mean, as someone stated on one of the main boards, that the cap is going to increase by the same 18%. Compensation is dictated by the growth in actual salaries, the cap by growth in revenues.

    Given the cap estimates (sans the 5% inflation factor) of $48.5M - a 10.2% increase, but reflecting a revenue growth of < 10.2% due to the increase in the 54% Players Share - we can see that the growth in salaries greatly outstripped the growth in revenues and that the players will be giving a chunk of change back through escrow this year.
     
  10. Fugu

    Fugu Guest

    Something inflationary in this system, but it can't go on forever.

    Just to expand on kdb's point, if all teams were at or below the midpoint, you would see salary growth matching or staying below the revenue growth. I guess it is to be expected when more teams exceeded the midpoint this year vs. last season.
     
  11. Irish Blues

    Irish Blues Still on hiatus

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    Stuck to the top of the board for a little while, because it's been asked 114,723,897 times and some people still think an offer sheet of $2,000,000 requires a 1st-round pick.
     
  12. KLM-Line

    KLM-Line Registered User

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    Is it just me or do you agree that the respective value of compensation picks differs in an odd way? It starts to hurt at $2,343,764 as a 1st rounder is involved. But the next level seems to decline the ante with a single 2nd rounder added. Given it takes inflationary 4x 1st rounders for the maximum offer sheet which again fits into the picture shouldn`t the compensation scale continually upwards? In my book it seems there is a variation between $2,343,764 - $4,687,527 in terms of value. Or am I estimating value of picks incorrect?

    Wondering cuz offer sheets will likely be handed to higher talent. Thus reducing the gap at this level might have some impact.
     
  13. Irish Blues

    Irish Blues Still on hiatus

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    Don't know ... but both sides signed off on it, and I suspect it's less punitive than the table in the previous CBA (which the players absolutely hated b/c it really was prohibitive when it came to considering offer sheets).
     

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