Hockey FAQ: UFA’s and RFA’s

As I was sitting around, watching all of the free agency signings and trades on 7/1/2018, I was suddenly hit by how little I knew about what was actually happening. What’s an RFA? How’s that different from a UFA? (Why grammatically do I put an “an” in front of a consonant, and an “a” in front of a vowel in those abbreviations?!). What does it mean to have arbitration status, and how am I going to get all this straight? If I was having a problem, I thought someone else might, so here is a handy dandy reference piece when it comes to free agency.

The way I see it, the only way I can adequately describe this process is to use an equivalent example. Free agency is kind of like an “adoption” process: you’re either emancipated (UFA) or “in the system” (RFA).

UFA’s

Those that are a UFA (unrestricted free agent), are players that have reached the age of 27, have seven years of experience in the NHL, or are “orphans” (AKA players under the age and experience limit where the clubs that originally signed them did not extend a qualifying offer to them, once they reached RFA status). All UFA’s have control over where they go, and what they do; they have a varying degree on how much they make, depending on what they are offered , and what they are looking for in a contract. They can negotiate their own contracts, and sign with whomever they want, without anyone telling them yay or nay. This is why people were going bananas over John Tavares, who became a UFA: he was a very, very good player, who can sign with any club he wanted, and everybody wanted him. Offer sheets and potential club meetings were thrown his way, and he could sign with any of them, until he made his decision and went to Toronto.

Clubs are not responsible for giving a qualifying offer to a UFA at the end of their contracts, if they do not wish to. They can let the UFA “walk” if they want. If they do send a qualifying offer, it is up to the UFA to accept whichever contract he wants, just like any other contract he may have received from other teams.

RFA’s – General Information

RFA’s are a little trickier.

Players who are under 27 years of age, or do not have 7 years of NHL experience, become RFA’s (restricted free agents) after they qualify for it. Their age when they sign their first contract originally defines how long they have to wait to qualify, once that contract is activated. To qualify, between ages 18 and 21, they must have 3 years of professional experience before becoming RFA’s (caveat: between 18 and 19, a “year” of experience is classified as 10 NHL games at least); from 22 to 23, they must have two years; from 24 and up, they must have 1 year. This is why Mitch Reinke, 22, will qualify as an RFA before Austin Poganski, 22. Reinke signed and activated his contract last year (2017-2018), meaning his time with the Blues last year (even if it was only a game and a few practices) counts towards his RFA status eligibility; his age dictated that a “year’s” worth of experience could be one game or more. Poganski deferred his contract, so his contract will not be activated until he gains experience this year (2018-2019).

RFA’s are paid an “allowance” (AKA their contract’s salary), usually an entry level contract of about $600,000 or better (the players with massive potential, usually nicknamed “generational players”, are offered quite a bit more). These guys are “in the system”, meaning that whatever club offered them a contract initially owns their rights until they meet their age requirement (27 years old), or have 7 years of NHL experience, or their contracts have been traded to another club. The new club that the player was traded to would carry on the same responsibilities as the old club, as if the player had not been traded away, and the experience rolls over to the new club.

So, a player whose contractual rights are owned by a particular club, is “raised” in that club’s system (or traded to another club and is “raised” in the second club’s system) for a certain amount of years, as stated above (1 to 3 years). If he has not reached 7 years of total experience as an NHL player, or is not 27 yet, that player is RFA qualified after  his period (1 to 3 years) is over, and he enters into RFA status.

An RFA is not an “adult” yet, so the “system” can offer them a better “allowance” (AKA a qualifying offer) to stay with the club. This must be done the day after the NHL Draft (this year, it was 6/29/2018). If an RFA is not given an offer to raise his “allowance” by the day after the draft, he becomes an “orphan” (AKA UFA). Contracts must be for at least a 100% increase minimum. If they made $600,000 or less, RFA’s receive no less than 110% more than the last contract at minimum; $600,000 to $952,380 receive 105% more at minimum; $952,381 to $999,999 receive $1 million flat; $1 million or more receive 100% more at minimum.

(Please note: the percentages above are ONLY for RFA’s. As a UFA, a player can negotiate for any amount, once they reach UFA status. This RFA payment information is also why players like Vladimir Tarasenko, who is a generational player, was offered a larger contract after his entry level contract, and for years beyond the 7 year marker. Entry level contracts are “prove it” contracts: prove your value to the club, and once you become an RFA the first time, higher contracts can be negotiated. As an RFA and beginning with the 2015-2016 season, Tarasenko was offered $7.5 million dollars year for 8 years, for his second contract. He would have been a UFA at the end of 2018-2019 season, at age 27, because he reached 7 years of NHL experience and reached the age limit for UFA status. By the time he would become a UFA, he could have negotiated for any amount for any amount of years! Clubs use the RFA contracts to their advantage with players like Tarasenko, when generational talent contracts occur. They benefit the players as much as possible, keep them with the club for as many years as possible [AKA “locking them up”], but try hard to remain significantly underneath their “cap”, meaning the total amount of money they are allowed to spend per year.)

An RFA player can accept his new “allowance” (AKA accept the offer as his new contract) and stay with a club for the next season, for the amount of years the club dictates. However, he can also consider other offers from other clubs, as of July 1st of every year. If he considers an offer from a second club, and believes he should sign with the second club, the player can be “adopted” into the second club. The only caveat is the player must decline his “allowance” offer from his first club first. After that, then the second club can sign him, with a penalty: it must not only pay for a new “allowance” for the player but must also fork up a draft pick to the first club. This is compensation for taking a player because he’s a “minor” (AKA not a UFA), and his rights belonged to the club that raised him. If a player signs with another team, the club that raised him has a chance to match that offer within 7 days. If the player still chooses the adopted club, then he’s adopted, and the original club gets a draft pick (what type of draft pick is determined by a lot of math that is very complicated to explain). Once a player accepts his “allowance” (AKA signs the offer sheet) from either the club that raised him or the adopted club, that becomes final: that is the contract he takes, and no other offers can be considered. An offer must be signed by December 1st, in order to play for any length of time in the current season.

RFA’s – Arbitration

When an RFA has “arbitration” status, this means that the player can argue about the term or the amount of his “allowance” he is offered once he’s an RFA. These players have at least four years of experience (less, if he signed originally after age 20, though the amount of time is not stated). If this occurs, the team and the player can negotiate for a better amount of money, or more years, that suits the player better. Arbitration status must be filed by July 5th. If the player rejects the negotiated amount or term, and nothing is resolved before July 20th, then hearings are scheduled from July 20th to August 4th to decide the proper amount of “allowance” a player should have. A player can work with the team and negotiate something better at any time from the date in which arbitration is filed until the hearing, and can sign any “allowance” offer between those dates. What they sign becomes their “allowance”. If both sides go to arbitration, the player can accept the terms of the contract, and stay with the club, or they can decline it, and become an “orphan” (AKA UFA).

CONCLUSION

I feel like I have a better grasp of this stuff. Hope you do too! Now I know what everyone is talking about, and I feel better prepared for the next year!

(Source: NHL.com, Cap-Friendly.com)



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