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Waivers & Entry-Level Contracts for Dummies

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The legal print can get a bit confusing.

In an attempt to help explain the possibly confusing verbiage of the NHL’s Collective Bargaining Agreement, or CBA, I’ve decided to write a piece detailing the odds and ends regarding waivers, entry-level contract slides, and other tidbits that are seen as fine print by some in this deal.

On January 6, 2013, after a long labor dispute, an agreement was reached to implement a new CBA after 510 regular season games had been cancelled as part of the abbreviated 2012-13 lockout. On January 9, the NHL's Board of Governors ratified the new deal. The NHLPA membership followed on January 12.

The current CBA is set to expire after the 2021-22 season—more specifically on September 15, 2022. However, both the NHL and NHLPA have the right to terminate the agreement in September 2019.

With this new CBA came several changes. For example, re-entry waivers were removed from the playing field. This used to be in effect for players recalled to the NHL. Nowadays, a player only has to clear waivers if re-assigned to the AHL, unless they are exempt.

And that brings me to my main point: waiver rules and exemptions.

In a nutshell, to determine whether a player is waiver eligible, one must analyze when said player was signed, played his first professional game, and how many NHL games that he has played. In addition, waiver eligibility is split into two subgroups: skaters (forwards and defensemen) and goaltenders.

If a skater signs his entry-level contract at 18, he will become waiver eligible after playing 160 NHL games or after 5 seasons of being under contract, whichever comes first.

For goaltenders, that number is slightly adjusted. Netminders who sign their entry-level contract at 18 will become waiver eligible after playing 80 NHL games or after 6 seasons of being under contract.

Below is a table to help simplify things:

One minor caveat that will reduce the amount of seasons until a player is waiver eligible occurs only with 18- or 19-year-olds who play in 11 NHL games or more. Such skaters will become waiver eligible after 3 years, as opposed to 5, with the same decrease in years will occur for goalies—from 6 to 4. However, it is very rare nowadays for a goaltender to play in the NHL before the age of 20.

So, the age at which a player signs his entry-level contract, or ELC, also plays a role in determining waiver eligibility. A neat feature of the CBA is the ability to “slide” the beginning of an entry-level contract if a player does not play at least 10 games in the NHL during his age-18 or age-19 seasons.

A player’s age is determined by their age on December 31st of that season for purposes of sliding a contract. A player can play in Juniors or the AHL and have their ELC slide. Slides are most common for Juniors players, but can also happen with some European players that are eligible for the AHL as an 18 or 19 year old.

This was the case for Mikhail Sergachev, who played in 4 NHL games with the Canadiens last season before being returned to Windsor of the OHL—his junior club. His contract now runs from 2017-18 to 2019-20, unless he is sent back to juniors again after training camp this September, in which case his ELC would slide by one year again.

An interesting case is that of Jonne Tammela. He signed his ELC at age 18, but due to the fact that he turned 19 by September 15 of his signing year, he is considered to have signed his ELC at age 19. Therefore, his ELC can only slide one year, which it did in the 2016-17 season. He signed his ELC on April 1, 2016.

This means that if Tammela cannot find a spot in the Crunch’s lineup this year, he can be sent back to Peterborough of the OHL so that he plays. However, Year 1 of his ELC would be burned.

The length of entry-level contracts is dependent on age. 18- to 21-year-olds sign for 3 years; 22- and 23-year-olds sign for 2, and 24-year-olds sign for 1 year. Players 25 or older as of September 15 of the year in which they sign their first NHL contract do not sign entry-level deals. The exception to the 25 or older rule is for players that were drafted outside of North America. Those players that sign from 25 to 27 are subject to a one-year ELC.

A key aspect of the CBA is that a player’s signing age will be determined by his age on September 15 of his signing year. Therefore, in theory, an 18-year-old could sign an ELC, but in terms of the NHL CBA, he will be considered to have signed his ELC at age 19. Slightly confusing, but hey, lawyers write these rules.

ELCs can include signing and performance bonuses. Signing bonuses, however, cannot exceed 10% of the contract’s total cap hit—the maximum being $925,000 until 2022—thus allowing a player to have a signing bonus that does not exceed $92,500. If a player’s ELC slides, and has signing bonuses, the player’s salary cap hit will be recalculated when the contract slides.

For example, Brayden Point signed a three year ELC with NHL salaries of $575,000, $650,000, and $650,000 and signing bonuses of $92,500 for three seasons. If he had played in the NHL as a 19 year old, his salary cap hit would have been $717,500. His contract was slid for one year. His first signing bonus essentially “slides” off the contract as well. His new salary was $575,000, $650,000, $650,000, and $92,500 signing bonuses in the first two years. Adding all three salaries and the two signing bonuses and dividing it by three gets his new salary cap hit of $686,666.

One last thing I’d like to clear up: the all-too-common notion that two-way deals mean a player can be sent to the minors and a one-way deal means they can’t.

Last off season, Cory Conacher was signed to a one-way contract for $575,000. At the end of training camp, he did not make the Tampa Bay Lightning roster and was put on waivers. When he cleared waivers, he was assigned to AHL Syracuse Crunch. Conacher’s signing age was 23 years old, giving him 60 NHL games or three seasons before he became eligible for waivers. He hit the 60 games mark in his second season back in 2013-14. He was on a one-way contract, was placed on waivers, and assigned to the minors.

As a contrast, Tye McGinn was re-signed to a two-way contract for $575,000 last offseason. He did not make the Tampa Bay Lightning roster, was placed on waivers, and assigned to AHL Syracuse Crunch, where he spent the entire season (although he was injured for most of it). He signed his ELC at age 21 giving him three years or 80 games in the NHL before he became waiver eligible. He did not reach 80 games within his first three seasons and so became waiver eligible after his third season in 2014-15.

The difference between a one-way and two-way contract is strictly how much money the player makes. A player on a one-way contract receives the same salary weather he is in the NHL or the AHL. A player on a two-way contract receives one salary in the NHL and a lower salary in the AHL. A player being on a one-way or two-way contract has zero impact on his waiver eligibility.