Since this was a few years before my time as a fan, I was always confused why Lou didn't match. When I was looking up info several years back, I was surprised to learn that there was no option to match Group I RFAs. A team could match Group II/III/IV offer sheets. Free agency was a bit of a new concept in every sport in the late 80s/early 90s, so there were some growing pains. Some interesting ones to look back on:
Troy Crowder does well in a couple fights against Bob Probert. Then he signs a Group I offer sheet with Detroit. Fresh off the Stevens decision, Lou has the nerve to request Probert back as compensation. While Crowder was a pure fighter, Probert could take a regular shift so that was a bit of an unreasonable request. The arbitrator sided with Detroit and we were given Dave Barr and Randy McKay.
Teams probably didn't like this process and Group I and II were merged in the 1995 CBA. You left a lot in the hands of an arbitrator who might not necessarily be hockey savvy. The Rangers signed Adam Graves to a Group I offer sheet. They offered Troy Mallette as compensation while the Oilers requested Steven Rice and Louie DeBrusk. The arbitrator admitted that he had no idea how to value Rice/DeBrusk since they had limited time in the NHL. On paper, Mallette seemed close enough to Graves so he sided with the Rangers.
Teemu Selanne signed a Group IV offer sheet with Calgary in the summer of 1992 as an unsigned European draft pick. Selanne would receive a 1.5 million dollar signing bonus and a 400K salary for three seasons. Winnipeg begrudgingly matched and they would have received no compensation if they hadn't.
A year later, Peter Forsberg and Markus Naslund went to court in order to get the same ability as Selanne. This led to possibly my favorite non-trade. Quebec was loaded with young forwards and needed a franchise D. At the 1993 Draft they badly wanted Chris Pronger. They offered Mike Ricci and #10 to San Jose but they weren't interested. On the draft floor, they offered an unsigned Forsberg straight up for the pick. Sharks GM Dean Lombardi declined and vented to the press afterwards.
Essentially he would have done the deal contingent on Forsberg signing, but Quebec's last second offer gave them no time to talk to Forsberg's agent. Forsberg was eyeing the contract that top pick Alexandre Daigle was about to sign with Ottawa (12.5 mil over 5 years). There were rumors that a rich team like the Rangers was prepared to give Forsberg a 4-5 mil signing bonus (dwarfing what Selanne got a year before). San Jose couldn't risk trading for Forsberg.