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Offer sheets: How they work, the cost, and restricted free agents who could be targetted

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Teams can offer contracts to the young players with expiring contracts on other clubs in the league starting today. Here's how the offer sheet procedure works, and which talents are highest on the radar.

Brad Rempel-USA TODAY Sports

The NHL has several rules to allow teams to retain players they’ve drafted.

Entry-level contracts can be extended if a drafted player doesn’t see a significant amount of professional action in the first few seasons after he's selected. Once that contract expires, a team can still retain the player’s rights, provided they extend a new offer prior to the start of the next season, called a qualifying offer. The player can choose to sign that offer, but the team buys time to work out a new deal after the player’s legally binding pact expires whether he signs it or not.

Players can elect for arbitration, and have their previous performance reviewed by an independent party, who then awards a salary that he feels is fair. While that can see a player get paid more money, he will be required to continue on as a member of the original team.

There is a rule that allows a player to find a new team that will give him a better chance to play in the NHL than he feels his current team is giving him. Other teams can offer contracts to players whose contracts are up, and those players are able to sign them and get a change of scenery.

It’s not quite that simple. The original team that holds the players rights can veto the signed contract, with a Right of First Refusal, within seven days. If the player's current team does choose that option, it has to pay the player at least what the other team offered, and is unable to trade the player away for the next season.

Only players who have received a qualifying offer can sign an offer sheet, and only if they haven’t elected for arbitration. If the arbitration was chosen by the team, players can still sign offer sheets up to 5 PM on July 5 and have a chance at moving to a different organization.

Offer sheets have been presented in the past, but not as often as you may think. Since the previous lockout in 2004-05, only eight offer sheets have actually been signed, and only one of those has not been matched by the player’s original team.

Player Signing Date Term Amount Original Team Offering Team Outcome
Ryan Kesler Sept 12, 2006 1 year $1,900,000 Vancouver Canucks Philadelphia Flyers Matched
Thomas Vanek Jul 6, 2007 7 years $50,000,000 Buffalo Sabres Edmonton Oilers Matched
Dustin Penner Jul 26, 2007 5 years $21,500,000 Anaheim Ducks Edmonton Oilers Accepted
David Backes Jul 1, 2008 3 years $7,500,000 St. Louis Blues Vancouver Canucks Matched
Steve Bernier Jul 8, 2008 1 year $2,500,000 Vancouver Canucks St. Louis Blues Matched
Niklas Hjalmarsson Jul 9, 2010 4 years $14,000,000 Chicago Blackhawks San Jose Sharks Matched
Shea Weber Jul 18, 2012 14 years $110,000,000 Nashville Predators Philadelphia Flyers Matched
Ryan O'Reilly Feb 28, 2013 2 years $10,000,000 Colorado Avalanche Calgary Flames Matched

If the player moves to a new destination as the result of signing an unmatched offer sheet, the original team is compensated with draft picks, and the number and quality of draft selections is predicated on how much the player was signed for.

For the purposes of annual salary determination, the total dollar amount of the deal is divided by either five or the length of the contract in years, whichever is lowest. If the offer sheet was for a contract of longer than five years, that calculated number will be higher than the actual average salary of the contract.

Annual value Compensation
Less than $1,239,266
$1,239,226 to $1,877,615 Third-round pick
$1,877,615 to $3,755,233 Second-round pick
$3,755,233 to $5,632,847 First- and third-round pick
$5,632,847 to $7,510,464 First-, second-, and third-round pick
$7,510,464 to $9,388,080 2 first-round picks, one second-round pick, one third-round pick
$9,388,080 or greater 4 first-round picks

(You can see the teams that have the necessary draft picks to present offer sheets here.)

For the 2016-17 season, any player signed to an offer sheet worth an average of less than $1,239,266 will require no compensation for the original team.

A contract equal to the bridge deal signed by Alex Galchenyuk a season ago, at $2.8 million per season for two years, would cost the offering team's assigned second-round pick in the 2017 Entry Draft.

Andrew Shaw’s contract, at six years, $23.4 million, carries an actual annual value of $3.9 million, but would have come out as (23.4 / 5 =) $4.68 million under the offer sheet rules had that been the method used to acquire him, and would have required the Canadiens to give up their first- and third-round picks.

A select list of restricted free agent forwards (as of Thursday night) who have received qualifying offers and are eligible to sign offer sheets follows:

Player Age Position Current Team 2015-16 Cap Hit
Marcus Johansson 25 LW Washington Capitals $3,750,000
Alex Killorn 26 C Tampa Bay Lightning $2,550,000
Brayden Schenn 24 C Philadelphia Flyers $2,500,000
Chris Kreider 24 LW New York Rangers $2,475,000
Jaden Schwartz 23 LW St. Louis Blues $2,350,000
Mike Hoffman 26 LW Ottawa Senators $2,000,000
Marcus Foligno 24 LW Buffalo Sabres $1,875,000
Kyle Palmieri 24 RW New Jersey Devils $1,466,666
Brandon Tanev 24 LW Winnipeg Jets $925,000
Sean Monahan 21 C Calgary Flames $925,000
Nathan MacKinnon 20 C Colorado Avalanche $925,000
Sergey Kalinin 24 C New Jersey Devils $925,000
Valeri Nichushkin 20 RW Dallas Stars $925,000
Johnny Gaudreau 22 LW Calgary Flames $925,000
Petr Straka 23 RW Philadelphia Flyers $925,000
Tyler Gaudet 22 C Arizona Coyotes $925,000
Ryan Haggerty 22 RW Chicago Blackhawks $925,000
Ryan Carpenter 24 C San Jose Sharks $925,000
Casey Bailey 24 C Ottawa Senators $912,500
Kevin Hayes 23 RW New York Rangers $900,000
Zemgus Girgensons 22 C Buffalo Sabres $894,166
Joel Armia 22 RW Winnipeg Jets $894,166
Rickard Rakell 22 C Anaheim Ducks $894,166
Vladislav Namestnikov 23 C Tampa Bay Lightning $874,125
J.T. Miller 22 C New York Rangers $874,000
Ryan Strome 22 C New York Islanders $863,333
Nicklas Jensen 22 RW New York Rangers $863,333
Phillip Danault 22 C Montreal Canadiens $863,333
Mark Scheifele 22 C Winnipeg Jets $863,333
Matt Puempel 22 LW Ottawa Senators $863,333
Tobias Rieder 22 RW Arizona Coyotes $853,333
Daniel Carr 24 LW Montreal Canadiens $842,500
Alex Khokhlachev 22 C Boston Bruins $786,666
Nikita Kucherov 22 RW Tampa Bay Lightning $711,666
Vincent Trocheck 22 C Florida Panthers $661,666

For all your salary cap and contract details on this busy start to the free agency period, be sure to visit General Fanager and CapFriendly.