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.