The Golden Knights made “news” yesterday by confirming William Karlsson, Colin Miller, and Tomas Nosek have all filed for arbitration. In reality, this isn’t really news at all. However, based on the wide range of reactions we received on Twitter, Facebook, and face-to-face, it feels like a good time to explain how this all works and why the three Golden Knights filing for arbitration is not a good or bad thing for either the player or the team.
In the NHL, when a player reaches the end of a contract they are placed into one of three categories.
- Unrestricted free agent (UFA)
- Any player 27 years old or older
- Any player with 7 seasons in the NHL
- Restricted free agent with arbitration rights (RFA)
- Younger than 27 years old
- Meets experience requirement based on age when signed first contract. (10 NHL or AHL games = 1 year)
- 24-27 years old when signed = 1 year of NHL experience
- 22-23 years old when signed = 2 years of NHL experience
- 21 years old when signed = 3 years of NHL experience
- 18-20 years old when signed = 4 years of NHL experience
- Restricted free agent (RFA)
James Neal, David Perron, Luca Sbisa, and Ryan Reaves were all older than 27, so they all became UFA’s.
William Karlsson -20 y/o when signed + 5 years experience = RFA w/ arb
Colin Miller -20 y/o when signed + 5 years experience = RFA w/ arb
Tomas Nosek -22 y/o when signed + 4 years experience = RFA w/ arb
Shea Theodore -20 y/o when signed + 3 years experience = RFA
William Carrier – 20 y/o when signed + 3 years experience = RFA
That brings us to the difference between the three categories. In short, the difference is how much freedom a player has to negotiate.
An unrestricted free agent (UFA), as the name suggests, has no restrictions. He can solicit offers from all teams and can sign with whichever one he pleases.
A restricted free agent (RFA) on the other hand can only negotiate with his current team and is not free to leave for a new team. If the team wants to retain the player, he will be extended a “qualifying offer” and must sign it if he would like to remain in the NHL. If the team does not extend the qualifying offer he then becomes a UFA and is free to sign with any team.
(The Golden Knights offered qualifying offers to all of their RFAs. William Karlsson, Tomas Nosek, William Carrier, Colin Miller, Shea Theodore, Teemu Pulkkinen, Philip Holm, Oscar Dansk)
An RFA with arbitration rights has one more step in leveraging a better contract. Rather than being forced to sign the qualifying offer, he can choose to file for arbitration. In other words, he can ask for a raise.
So, let’s go through the steps of the process for RFA’s without arbitration rights, like Theodore and Carrier.
- Step 1: Team decides if they want to retain each player
- If yes: Extend qualifying offer
- If no: Do not extend qualifying offer (Player is released)
- Step 2: Player signs qualifying offer
That’s it. The player has no negotiating power and is essentially stuck signing the offer. The dollar value of a qualifying offer is determined by the NHL’s Collective Bargaining Agreement (CBA). The team hands the player a contract and their either sign it or leave the NHL.
The process for RFA’s with arbitration rights, like Karlsson, Miller, and Nosek adds one more step, giving the player that bit of negotiating power. Rather than being forced to sign the qualifying offer, the player can file for arbitration. Arbitration means both sides will present how much they believe the player is worth and then a third party will decide the contract the team and player will sign. Of course, the player must remain with their original team, so the negotiating power is significantly less than that of a UFA who can negotiate with all teams.
600 words later we get to the point of this whole article, is the fact that three Golden Knights filed for arbitration good or bad for the team?
The answer is neither. It’s just the rational next step in the process. Instead of signing a contract that offers little to no raise (the qualifying offer) the player can ask for a raise.
Filing for arbitration gives up only one small option for the player. They can no longer sign an “offer sheet.” If you are interested, click here to read more about offer sheets. However, understand that not a single offer sheet has been extended since 2013 and no player has changed teams due to an offer sheet since 2007.
So now that you understand the process, let’s walk through showing why there are no winners, losers, low-ball offers, pompous GM’s, or any of the other garbage I’ve seen spewed about Karlsson, Miller, and Nosek filing for arbitration. The process is the same for all three, but Karlsson’s situation illustrates it best so we’ll use him as the example.
After the season ended the Golden Knights had to decide by June 25th if they wanted to keep William Karlsson or lose him for absolutely nothing. To do so, they are forced to extend him a qualifying offer worth exactly $1 million. Clearly, the Golden Knights want to keep Karlsson and from the team’s perspective, paying him $1 million sounds pretty good. So, they did that.
Karlsson then had two choices. Either sign for $1 million and be grossly underpaid or file for arbitration. Obviously, Karlsson believes he deserves a raise, so he filed for arbitration.
There is no backstabbing. There is not a winner or a loser. It’s simply a process and both sides are doing exactly what they should have done to this point.
So where does that leave us now? In the next few days, the NHL will set a date for Karlsson, Miller, and Nosek’s arbitration hearings. Here’s the key. Filing for arbitration does NOT mean the player is going to make it to the arbitration hearing. The team and the player are free to negotiate between now and that date to reach an agreement on their own. More than 90% of players reach an agreement before arbitration. Last year 30 players filed for arbitration, 29 of them reached deals prior to the hearing. The one was Nate Schmidt, but let’s try to ignore that elephant in the room for now.
Once the dates are set (between July 20-August 4) for Karlsson, Miller, and Nosek, the Golden Knights and each player will have a deadline to reach a deal. Like all negotiations, deadlines help get deals done.
Odds are the Golden Knights reach agreements with all three players prior to their arbitration hearing and no one is hurt. But, if for whatever reason one or more of them do reach the hearing, then we’ll have something to talk about. Then, there will be winners and losers. Then, feelings might be hurt. Then, you might (I emphasize might) be free to call George McPhee a cold-hearted son of a… nevermind.
But until then, go on with your day knowing the only important thing about the entire RFA process to this point; William Karlsson, Colin Miller, and Tomas Nosek are all guaranteed to be Vegas Golden Knights in 2018-19.
Unless of course they are traded.
Hockey is great.