Note from DG:
This is the first in a multi-part series to help the BSH community understand the complicated mess that is the 2005 NHL Collective Bargaining Agreement. Please provide any comments, feedback, suggestions, or any additional questions in the comments section below.
In order to make this Frequently Asked Questions series easier for everyone to understand, I've decided to start off by explaining some of the acronyms and terms that appear in the Collective Bargaining Agreement. Some of these definitions are exceedingly simplistic, and their concepts will be explained further in the chapters that cover those sections of the agreement.
SPC (Standard Player Contract) - All NHL contracts are referred to as "SPCs", regardless of the contract type.
NHLPA (National Hockey League Player's Association) - The union to which all players signed to NHL contracts belong.
League Rules - The NHL's Constitution and Bylaws, which are maintained by the Board of Governors.
Minor league contract - Not to be confused with two-way NHL contracts. A minor league contract, such as an AHL contract, does not permit the player to be called up to the NHL team. In these cases, the player is actually contracted to the minor league team and is not a member of the NHLPA. In order for these players to be brought up to the NHL level, a new NHL contract must be signed and submitted to the league office.
Upper Limit of the Payroll Range - Often just called the Upper Limit, this is what we usually refer to as the Salary Cap.
Lower Limit of the Payroll Range - More commonly known as the Salary Floor.
Payroll Range - The range between the upper and lower limits, or the floor and the cap. This range is always $16 million dollars.
Adjusted Midpoint - The midpoint of the payroll range; $8 million below the cap and $8 million above the floor.
HRR (Hockey Related Revenues) - The total operating revenue of the League and its member clubs, arising from directly or indirectly from NHL Games and NHL Events. This includes items such as ticket sales, merchandise, broadcast revenues, advertising, concessions, and sponsorships. The full list of inclusions is covered in Article 50. HRR is using in many calculations throughout the CBA, including the determination of the payroll range and many items pertaining to the revenue sharing system.
Players' Share - The percentage of revenue that must be distributed to the players, which can vary between 54% and 57% depending on the total aggregated amount of HRR.
Types of NHL SPCs:
a) Entry-Level Contracts (ELCs) - All North American Players signed to their first NHL contract between the ages of 18 and 24, or European players signed between the ages of 18 and 27, will be subject to the entry-level system. All ELCs are also two-way contracts (see below).
b) 35-plus Contracts - Contracts or contract extensions that begin when the player is 35 years of age or older. The player's age at the time of signing does not matter; it counts as a 35+ contract if the player is 35 or older on June 30th of the year the new contract begins.
c) Standard - Contracts that don't fall into either the Entry Level or 35+ categories above.
Contract sub-types and qualifying characteristics:
a) Two-Way NHL SPC - These are contracts that will pay a player two different salaries when they are playing in the AHL and when they are playing in the NHL, respectively.
b) One-Way NHL SPC - The opposite of a two-way contract; the player receives the same salary regardless of what league they are currently playing in.
c) No Trade Clause (NTC) - An individually negotiated clause preventing a player from being traded to another team without their consent, however they can still be waived to the minor leagues without their permission. If they are claimed during the waiver process, they must report to their new team. NTCs are only available to players who qualify for Group 3 Free Agency.
d) No Movement Clause (NMC) - An individually negotiated clause preventing a player from being either traded or waived without their consent. NMCs are only available to players who qualify for Group 3 Free Agency.
Restricted Free Agent (RFA) - A player who, at the expiration of their current contract, continues to have their rights owned by their parent club.
Unrestricted Free Agent (UFA) - A player who, at the expiration of their current contract, is free to negotiate a contract with any club and retains no obligation to their previous club.
a) Group 1 - Players on Entry Level Contracts.
b) Group 2 - RFA, a player who does not yet qualify for Group 3 or Group 6 UFA, who is an RFA at the completion of their ELC or a Standard contract they signed after the expiration of their original ELC.
c) Group 3 - UFA, who earned their status by either reaching age 27 or having played seven (7) seasons at the NHL level.
d) Group 4 - Defected Player, a type of RFA whose SPC has expired but has unfulfilled obligations to an NHL club and thus that club continues to retain rights to the aforementioned player.
e) Group 5 - A type of UFA that can no longer be reached; previously defined as a player who had played 10 seasons but made less than the league's average salary. When the age requirement to qualify for Group 3 UFA status dropped down to age 27, it became impossible to reach Group 5 Free Agency.
f) Group 6 - A type of UFA who is either age 25 or 26 and has played 3 seasons in the NHL, but has appeared in less than 80 NHL games for a skater or less than 28 games for a goaltender.
Right of First Refusal - The club's right to match any Offer Sheet sent to one of their RFAs by another NHL club.
RFA Compensation - When a team chooses not to match an Offer Sheet from another NHL club and loses one of their RFAs, they receive compensatory draft picks. The number of picks received and the round number of each pick are determined by the cap hit of the offer sheet signed by the departing player.
Performance Bonuses - These bonuses are only available to players on Entry Level Contracts, players on 35+ contracts that are only 1 year in length, or a special exemption for contracts where a player who has played 400+ NHL games was injured for more than 100 days in the final year of their most recent SPC, and has signed a 1 year SPC for the upcoming year. All other contracts are not eligible for any form of Performance Bonuses. The individual bonuses are negotiated directly into the contract and are not public knowledge, however, the list of allowable bonuses appears in Exhibit 5 of the CBA and are not completely arbitrary.
Waivers - The basic principle of waivers is that they are paperwork that gives you permission to assign a player to another league. Just because you have permission does not mean you have to assign them somewhere, you just have the right to do so. There are three types of waivers: Regular waivers when a player is sent down, Re-Entry waivers when certain players get called back up from the minors, and Unconditional waivers that happen before a player is bought out of their contract. These will be covered in details in future articles. To clear up a common myth, Two-way contracts are only loosely related to waiver requirements, so just because a player is on a two-way contract does not indicate whether or not they can be assigned to the AHL without passing through waivers.
CHL Transfer Agreement - The agreement governing player movement and loans between the Canadian Major Junior leagues and the NHL. The full wording of the agreement is not public, but the known conditions will be discussed in a future article.
IIHF Transfer Agreement - The agreement governing player movement and loans between the NHL and leagues outside of North America.
Reserve List - A team can own the rights to up to 90 players at one time. They are limited to 50 total one-way or two-way NHL contracts at any given time, to which the only potential for going over the 50 man limit is the Slide Rule (see the following definition). The remaining spots on the 90 man list are reserved for unsigned draft choices, players on minor league contracts to whom we hold the negotiating rights, and defected players not currently signed to an SPC.
Slide Rule - A potential exemption to the 50 man contract limit for Entry Level Contracts. In order to qualify, the player must be 18 or 19 years old and be sent back to their Major Junior team. If they don't play 11 NHL games during that season, their contract will be extended for an additional year and "slide" onto the following year's 50 man list. If the player does appear in 11 NHL games, their contract will not slide and must count toward the 50 man list for the current year.
League Year - The period from July 1 to the following June 30th.
Accrued Season - Any League year during which a player is on the Club's Active Roster for 40 or more Regular Season games (30 for a goalkeeper), provided that any games missed due to hockey-related injury count as games played during the season the injury occurs and a maximum of one additional season. This is used a measurement of a player's experience in the league.
Active Roster - Starting on the day before the opening of the Regular Season, a club's Active Roster includes all players who are signed to an SPC that are not injured or loaned to a club of another league (including the AHL). If a player is sent to the AHL on a conditioning loan, they remain on the club's Active Roster. During Training Camp, a player is deemed to be on the club's Active Roster only if he had been on the Active Roster after the trade deadline of the preceding season (other than on an emergency basis).
Bona Fide Long-Term Injury/Illness Exemption (also referred to as Long Term Injured Reserve, or LTIR) - If a player will be unable to play due to illness, injury, or disability for a period of at least 10 NHL games or 24 consecutive days as determined by the team physician, the team may place the player on the Injured Reserve List, and use a limited exemption to spend above the cap if necessary to replace the injured player. The player's salary and bonuses will continue to count toward the cap calculation, but the club will have a line of credit to exceed the cap by the amount of the injured player's salary and bonuses. The exemption will end immediately upon the return of the injured player, and the club must make room on both the Active Roster and under the Upper Limit for the previously injured player. This exemption will be fully explained in its own chapter.
Injured Reserve (IR) - Players who are injured, ill, or disabled and will be unable to play for a minimum of 7 days may be moved to the Injured Reserve list. Players who are placed on IR come off of the Active Roster and the club can call up a replacement player, however both the injured player and the replacement player will count toward the salary cap.
Disclaimer: The content in this CBA FAQ is based on my own interpretation of the wording in the NHL Collective Bargaining Agreement, unless a link to the source of another person's interpretation is explicitly provided. The full PDF document of the 2005 CBA is available for public download from the CBA section of NHL.com. I will do my best to ensure the accuracy of each article, but I welcome any comments, feedback, and discussion to improve and/or correct each section.