RFA Compensation, 2007-08

Ted Hoffman

The other Rick Zombo
Dec 15, 2002
28,859
8,113
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:

Amount | Compensation Due
$773,442 or less|None
$773,442 - $1,171,882|3rd round pick
$1,171,882 - $2,343,764|2nd round pick
$2,343,764 - $3,515,645|1st and 3rd round pick
$3,515,645 - $4,687,527|1st, 2nd, and 3rd round pick
$4,687,527 - $5,859,412|Two 1st's, one 2nd, one 3rd round pick
$5,859,412 or more|Four 1st round picks

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.
 
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abev

Registered User
Sep 30, 2005
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NY
www.fakepuppy.com
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.
 

Ted Hoffman

The other Rick Zombo
Dec 15, 2002
28,859
8,113
From the last part of Article 10.4: (important points in bold)

Clubs must use their own draft picks (being those awarded directly to the Club by the League for use by it in the Entry Draft, including such draft picks described in the first clause of this parenthetical that a Club has traded or encumbered, and subsequently reacquired or unencumbered.)

-- Clubs cannot acquire picks to use as compensation (with the exception being a Club's own draft selections that are traded and then re-acquired).
-- Clubs owing one (1) draft selection must have it available in the next draft.
-- Clubs owing two (2) draft selections in different rounds must have them available in the next draft.
-- Clubs owing three (3) draft selections in different rounds must have them available in the next draft.
-- Clubs owing two (2) draft selections in the same round, must have them available in the next three (3) drafts.
--Clubs owing three (3) draft selections in the same round must have them available in the next four (4) drafts, and so on.

When a Club owes two (2) or more draft selections in the same round, the signing Club does not elect the years in which such selections shall be awarded to the Prior Club; rather, the selections next available will be transferred to the Prior Club (i.e., a Club that owes two (2) selections has them available in the next two (2) drafts – that is when they are transferred).

I think that answers all of your questions.
 

abev

Registered User
Sep 30, 2005
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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.
 

Ted Hoffman

The other Rick Zombo
Dec 15, 2002
28,859
8,113
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).
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.
 

kdb209

Registered User
Jan 26, 2005
14,870
6
http://capitals.nhl.com/team/app/?service=page&page=NewsPage&articleid=323120

*** TABLE FOR COMPENSATION UPDATED ***

Based on the two numbers given in the link above (numbers are near the bottom of the link), these are the compensation ranges for RFA offer sheets for 2007-08.
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:

CBA Article 10.4 said:
The dollar amounts set forth in the scale outlined above shall be increased on an annual
basis at the same percentage rate of increase as Average League Salary, with the 2006/07
League Year being the first year such increase shall take effect. By way of example, if
the Average League Salary on June 30, 2007 has increased by 10% from the Average
League Salary on June 30, 2006, then each of the dollar amounts stated in the table above
shall be increased by 10% on June 30, 2007, and the basis for determining the number
and quality of draft choices due to the Prior Club for the loss of a Restricted Free Agent
signed after such date shall be adjusted accordingly. For each League Year thereafter, a
similar comparison and adjustment shall be made.

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.
 

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.
 

Ted Hoffman

The other Rick Zombo
Dec 15, 2002
28,859
8,113
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.
 

KLM-Line

Registered User
May 8, 2007
1,889
86
Munich
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.
 

Ted Hoffman

The other Rick Zombo
Dec 15, 2002
28,859
8,113
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.
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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