Getting to Know the CBA - Episode 2: The Draft & Entry-Level Deals

Charles LeClaire-US PRESSWIRE

Last week, we went through the first seven articles of the NHL CBA, laying out the groundwork for the agreement by which the NHL runs. This week, we continue our series on getting to know the NHL's CBA by taking a look at Article 8, which covers the Entry Draft and Article 9, which covers

You can find the entire CBA here (PDF)

From a legal standpoint, the draft is maybe the most interesting part of how the CBA works because it's really in its truest sense the NHL agreeing to limit the open market on players with the permission of the players who have been through that system. Any 18 year old who has a problem with being prevented from having his choice of teams with whom to negotiate would have to fight both the NHL and the NHLPA on a united front about this issue and it could very well cost him his career.

At any rate, Article 8 lays out all the considerations of the draft. There are seven rounds, which can contain between 210-240 picks in it (no more than 30 compensatory picks can be added; more on that later). The draft lottery is laid out in Exhibit 4, explaining how the worst team by points totals gets a 25% weighting for the lottery of the #1 pick and how only the #1 pick is up to be won (if the #15 team doesn't win, they get the #15 pick. If the #1 team doesn't win, they get the #2 pick. No picks other than the #1 can be moved by more than 1 spot on the ranking).

The order of selection other than the lottery goes as such.

30th overall: The Stanley Cup Champion
29th: The losing team in the Stanley Cup Final
28th: The losing conference finalist with more points in the regular season (Pittsburgh this year)
27th: The losing conference finalist with fewer regular season points (Los Angeles)
26th-??: The remaining division winners, ranked by regular season points (Washington gets the 23rd for having the fewest points, Anaheim 26 for the most). This number will change, depending on how many division winners fail to make the conference finals.
??-16th: Teams ranked in order of final regular season points.

Per the CBA, this is essentially based on tradition. They have the right to change this when they see fit, but they have to give the NHLPA notice of their intention to do so in order for the PA to have time to confer.

As far as draft rules go, there are a lot of them which deal with specific ages of a player. The NHL entry draft is one of universal eligibility. If you're 18 and real (or not), you are eligible to be drafted into the NHL. One doesn't have to "declare". You are eligible for draft unless you've met any of a number of conditions (like already being in the NHL) which make you ineligible.

In this article, a player's age can change based on what specific issue they're referencing. For the sake of ease, a player's age is defined by how old he turns in the year he's drafted. Starting when you're 18 and ending unequivocally when you're 22, if one wants to play in the NHL, one has to submit to the possibility of being drafted.

Once a player is drafted, his team essentially has until next June to keep exclusive rights to him. Here's where all of the age-based considerations/exceptions come into play. In reality, nobody of note becomes draft re-eligible after one year.

To do so, a player has to be drafted, not hit a number of extremely-common situations players his age go through, and not be tendered a Bona Fide Offer (they have to at least offer him the league minimum on the entry-level deal he's entitled to based on his age.)

For the most part, a club retains a players exclusive negotiating rights until he's 22 after he's drafted if

  • He leaves Major Junior hockey before age 20 (if he hangs out for one year, the team has to give him that Bona Fide Offer, otherwise they don't.)
  • He goes to college. He doesn't even have to stay there. The CBA allows for his rights to be extended a bit beyond the fourth year after his drafting, but doesn't allow for a way that a player can re-enter the draft.
  • He plays in a foreign league

22 is kind of a minimum consideration. The CBA doesn't technically use the age and in some cases, exclusive rights can extend to age 23 or beyond, but when some four year rights to 18-year olds turn into three year rights for 19 year olds, it's just easier to say that the rule of thumb keeps almost all unsigned players ineligible to re-enter the draft or become draft-related free agents before they hit age 22

To recap as simply as possible: If you're wanted, you'll be drafted and if you want to develop the skills to be in the NHL, you'll either sign with that team or accept they're going to have exclusive rights to your professional career while you develop.

Other considerations:

  • Aged 18 and 19 players who aren't going to be used by the big club have to be offered to the junior club from whom they were drafted before they can be sent to any other team (AHL, ECHL)
  • Rights to players transfer with the player: You can't trade just SOME rights to a player you drafted.
  • Compensatory picks are only given for first-rounders: If you take a guy in the first 30 picks and somehow don't end up signing him despite your best efforts, you get the same numbered pick in the very next draft, except its a 2nd-rounder (For example, Atlanta got Pittsburgh's 2008 first-rounder, 29th overall, and took Daultan Leveille. Four years later, after a college career, the Jets didn't tender Leveille an offer, making him a free agent. For this, Winnipeg will get the 29th pick of the 2nd round as a compensatory selection).
  • If the NHL holds any kind of event for undrafted players (like a scouting combine), the NHLPA is entitled to hold a private and closed meeting with those players.

Article IX - Entry Level Compensation

Just in case lacking the power to choose your own team isn't bad enough for kids who are probably paid more than you should give to people their age, but are still paid much less than people their equal in talent get for simply being older and lucky enough to survive playing hockey to that age, the NHL has a limit on how much you can pay players on entry-level contracts.

The entire purpose for an entry-level deal is to limit how much a player can be paid. That's it. Length of the deal depends on when the contract is signed, by age (for this article, age is defined as how old the player is as of September 15th of the year he signs his contract).

18-21: 3-year deal
22-23: 2-year deal
24: 1-year deal
25-27 (EUROPEANS ONLY) - 1-year deal

The CBA actually defines anybody playing outside North America as a "European" for the purposes of this article. That's right, it Taro Tsujimoto were real and were signed from the Tokyo Katanas right now at age 26, he would be have to accept a one-year entry-level deal for being a European player.

A real-life example is Damien Brunner's contract. Brunner signed his contract at age 26. If the Wings had wanted to sign him to a multi-year deal, they'd have had to talk him into waiting two years until he was 28 to avoid the entry-level requirement.

The CBA talks of previous years and those limits, but those only apply to already-existing contracts. All new entry-level contracts under this CBA will automatically be two-way and will automatically have a maximum salary of $925,000 at the NHL level and $70,000 at the AHL level (or ECHL level if the case may be). However, players can earn a maximum of up to $3,775,000 from their team thanks to what the CBA calls "Exhibit 5" bonuses (performance bonuses).

Speaking of which, bonuses are only available on entry-level deals and they work in multiple ways:

Games-played bonuses are limited to three tiers: 5, 10, and 10+. If earned, they're only to be included in the maximum $925K salary a team can give. The 5-game bonus can't exceed $25,000.

Signing bonuses are limited to 10% of the compensation ($92,500). This doesn't add anything to their cap hit. It just means that a team can pay a guy 10% of his salary up-front.

Performance bonuses are fairly strictly-defined. They're automatically counted as "earned" for cap space consideration, but don't have to be paid unless earned. There are two categories of bonuses which can be paid:

1: Individual "A" Bonuses - These are broken into categories like ice time, goals, and plus/minus. Each category has a minimum requirement a team can bonus for (10 goals, for example) and each category may not create more than $215,00 worth of bonuses (you can bonus $100K at 10 goals and then $115K at 15 goals if you want). Total "A" Bonuses can't exceed $850,000.
2: Individual "B" Bonuses - This is kind of a two-part bonus system based on performance comparative to the rest of the league. First off, the league itself will pay the player a bonus outside of his Club-paid salary if he does things like earns a place in the top five for postseason awards like the Hart, Selke, or Vezina; or if he places top ten in the league in offensive/goaltending categories. On top of the league bonuses, the club can pay bonuses of up to $2M to the player for making these awards.

Basically, entry-level deals are a great way to inflate a cap hit without inflating a salary number. You have to offer the league minimum ($525,000 this season), but can't pay a player more than $925,000 in regular salary plus $850,000 in A bonuses plus $2,000,000 in B bonuses. This is how you get the maximum $3,775,000 hit for guys like Justin Schultz, who is a great example of a drafted player waiting until he's old enough to reach free agency.

During the lockout, some of the discussion centered around extending entry-level deals. The NHLPA fought against this and, when you get into the CBA, you can see why. Sidney Crosby won the Hart trophy during year 2 of his entry-level contract and got a $250,000 bonus for doing so. The best player in the league (by that metric) was prevented from making the kind of salary he would earn more than a year later under his follow-up contract by virtue of a collectively bargained tradition designed to make him "pay his dues."

The Entry-Level Slide

For 18 and 19-year old players, if the club doesn't use the player for 10 NHL games in a season where he's under an entry-level contract, his contract "slides" for one year. This extends the entry-level contract for one year under the exact same terms, unless both the club and player both agree to not make it slide (and why in the world would a club do that?) This is why you'll semi-regularly see a club start a highly-touted rookie for the first 9 games of a season before returning him to his junior club.

Up next, we'll cover free agency.

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