Restricted Free Agents (RFA) In The NHL Explained

Free agency in the NHL is a period where players have met specific requirements and have the freedom to sign a contract with any team in the NHL; however, we want to look at restricted free agents (RFA) in the NHL.

What Is A NHL Restricted Free Agent

A Restricted Free Agent, also known as RFA, is a term to qualify NHL players who are no longer bound by an entry-level contract but do not qualify to become unrestricted free agents. The maximum time frame of an entry-level contract is three years. After this period, the player is stuck on the team until he becomes a free agent because his rights are owned by his current team. 

However, once a player has met the requirement, he can become a free agent. But there is a difference between being a restricted free agent (RFA) and an unrestricted free agent (UFA). 

Difference Between Restricted And Unrestricted Free Agent (RFA Vs UFA)

Firstly, what is the qualification to be an RFA or UFA?

To qualify as an unrestricted free agent (UFA), a player must be 27 or older or play in the NHL for seven accrued seasons (for Group 3 UFA). An accrued season in the NHL is when a player is on the roster of an NHL team for at least 40 games in a season(30 games for goaltenders). 

But when it comes to restricted free agents (RFA), a player is an RFA when he is less than 25 years or has played less than seven accrued seasons in the NHL. 

Another difference between the two free agents is their movement freedom.

UFAs are not bound to any team in the NHL and are free to sign a contract with any team of their choice, whereas RFAs are bound to an NHL team, but they have a “conditional” privilege to pursue contract offers outside their current team. The condition for an RFA to sign with another team will be discussed later in this article.

NHL RFA Rules

Here are some general rules and terms associated with restricted free agents in the NHL. In this section, we will be looking at Qualifying Offers, Offer Sheets and Salary Arbitration.

RFA Qualifying Offer

A qualifying offer is a contract extension to an RFA by his current team, in which the RFA will receive a minimal raise from his previous contract offer. Qualifying offers are proposals to players after the end of their entry-level contract (before they qualify as an unrestricted free agent) or after the end of one qualifying offer.

A qualifying offer in the NHL must be for at least a year. In other words, the qualifying offer can last the duration the player is an RFA. A player automatically becomes an unrestricted free agent if a team does not give a qualifying offer as an RFA on their roster. 

There are four key points to consider about qualifying offers.

• If his team does not give an RFA a qualifying offer, he automatically becomes a UFA. 
• Also, if a player rejects a qualifying offer from his team, he will remain a restricted free agent. This means the team still owns his rights until he qualifies as a UFA. 
• NHL teams who fail to send a qualifying offer to their RFAs before July 1 lose the players, and they become UFAs.
• If a player accepts and signs a qualifying offer, the terms, length, and monetary value of the offer become the player’s new NHL contract with the team.
• Lastly, any player who refuses to sign the qualifying offer on December 1 cannot play for the rest of that season. 

The table below shows the values of qualifying offers. 

Players Salary	Qualifying Offer
$660,000 or less	110% Of the Player’s Salary
$660,001 – $952,380	105% Of the Player’s Salary
$952,381 -$999,999	$1 million in salary
$1 million and above	100% Of the Player’s Salary

Does An RFA Have To Sign His Teams Qualifying Offer

RFAs are not obliged to sign the qualifying offer of their team. There are a few players who refused to sign the qualifying offer of their team. However, the options open to such players are limited and aren’t great ones. 

I. Sit It Out

Since signing a qualifying offer is not compulsory for a restricted free agent, a player is free to reject the offer. However, the downside of this decision is that a player stands to lose out on making money with his current team. 

Similarly, if a player refuses to sign the qualifying offer, he remains an RFA. An RFA might want to get an offer sheet from another team or wait until they qualify as a UFA, giving them the signing freedom. 

As mentioned, if the RFA resolves not to sign the offer before December 1, he will be excluded from the remaining part of the season. In addition, being dormant as a player can lead to a depreciation of the player’s skill as he does not use it in actual games. 

II. Sign An Offer Sheet From Another Team

Restricted free agents can sign offer sheets from other NHL teams. However, most of the time, these offer sheets are matched by the player’s team. Offer sheets are just like qualifying offers. However,  unlike qualifying offers, offer sheets are proposals from other NHL teams to an RFA. 

If an offer sheet is signed and not matched by the restricted free agent’s current team, then the player can move to the other NHL team. This will be discussed in detail later on in this article. 

III. Move And Play In Europe

Finally, if a player can’t find an NHL team he can sign an offer sheet with (without his current team matching it) and is unwilling to continue with the team or sit it out, he can sign a contract with a European ice hockey team. 

Although, a characteristic trait of European leagues is that they pay considerably lesser than the NHL or other North American Leagues. Also, for an RFA to move from the NHL to a European league, he does not need to meet any requirements.

Offer Sheet: How Offer Sheets Work In The NHL

Offer sheets are a binding agreement (contract) that teams make with RFAs whose rights are owned by another team. They are like a trade contract in which an NHL team agrees to sign an RFA whose rights are owned by another team in exchange for its draft picks. 

This deal is a tricky one as a team has to deliberate between trading a player of known value and skill level for a player who is unknown and of unknown skill sets.

Now, How Do They Work?

If a team sees an RFA that they want on their roster, they can negotiate an offer sheet with the player. Once the RFA player signs the offer sheet, the player’s current team is notified of the action, and they have seven days to match the offer sheet. 

To match an offer sheet means the team with the player’s right has replicated the offer sheet of the team that wants the RFA. If the offer sheet of the player is not matched by the team seven days after a player has signed, the player’s rights will move to his new team. 

The offer sheet, which contains the terms, salary and bonuses a player will receive, becomes the player’s new contract. However, it is only in rare instances that a team does not match a qualifying offer.

Offer Sheet Compensation

A team that is negotiating an offer sheet does not take up an RFA from its current team without giving something in return. The currency of exchange when it comes to Offer Sheets in the NHL is draft picks. 

In addition, the weight of compensation is not equal for every RFA, and it depends on the player’s Annual Average Value (AVV). The AVV of a player is the sum of his salary and signing bonus divided by the number of years in his contract. 

Here is a table of the distribution of offer sheet compensation based on the AVV of the RFA. 

Contract AVV	Offer Sheet Compensation
$1 – $1,356,540	No Compensation
$1,356,541 – $2,055,364	1 Third-Round Pick
$2,055,365 – $4,110,732	1 Second-Round Pick
$4,110,733 – $6,166,096	1 Second-Round Pick 1 Third-Round Pick
$6,166,097 – $8,221,463	1 First-Round Pick 1 Second-Round Pick 1 Third-Round Pick
$8,221,464 – $10,276,829	2 First Round Picks 1 Second-Round Pick 1 Third-Round Pick
$10,279,829 and more	4 First Round Picks

Salary Arbitration

Salary arbitration is when a salary dispute between a restricted free agent and an NHL team goes to a third party to cross-examine and make a final decision. After filing an arbitration, a two-week interval is usually before a hearing. 

After the hearing, the final decision is passed by the third party. If an NHL team does not agree to the arbitrator’s decision, the player becomes an unrestricted free agent. 

However, between filing an arbitration to hearing, NHL teams and players can review their contract agreement. 

Can Any Player File An Arbitration?

Even though a salary arbitration seems like a nice step for setting the salary dispute between an RFA and his team, not every player can file an arbitration. Arbitrations are only open to RFA. However, here is the eligibility condition for arbitration. 

• Players 18-20 must have four years of NHL experience
• A 21-year-old player must have 3-year experience
• Players 22-23 must have two years of experience
• Players aged 24 or older must have at least one year of NHL experience

A player will be counted to have a year of experience if he plays in at least 10 NHL games in a season. 

Conclusion

Most times, RFAs do not opt to look for offer sheets or go for salary arbitration. Waiting till they are unrestricted free agents before looking for other options is common practice. Having disputes with an NHL team early on in their career might not be a good call. 

This brings us to the end of restricted free agents in the NHL. Thanks for reading.