RFA Offer Sheet Compensation

[Guest]

If RFA compensation is broken, it's because the compensation is too low, not too high. The reason why we don't see offer sheets very often is because in general, the owning team will match. The only way to get the owning team to not match (in most situations) is to both rely on other contributing factors while overpaying the player. If the player is offered a reasonable, or even somewhat greater than reasonable salary, the owning team will match because compensation for the player is of lesser value than the player himself. If compensation were bumped up marginally (and this is mostly directed at mid-salary offer sheets) the amount of overpayment in salary required to secure a player's services would fall.

This of course all assumes the process is "broken" in the first place (see the previous couple posters on what the real intent of RFA is).

That said, if we want to adjust the process of offer sheets, I'd rather see it as an adverse trade type scenario. That's to say, rather than having fixed compensation for RFAs, allow teams to offer specific compensation in addition to the offer sheet. That is to say, Minnesota could offer sheet E. Kane for 6 years $31.5MM (a small increase over that rumored 6 year, $29MM deal being worked on) with compensation of Setoguchi + Prosser + 1st. No arbiters involved. This just ends up being more or less a "sign and trade" offer that Winnipeg is forced to decide upon.

I think we all agree that if it's broken it's because the compensation is too low. Too risky for a team not to match and too easy for a team to offer a player means that it's not worth the effort most of the time.

I like the idea of making offer sheets more trade oriented as I suggested previously, but you cannot make it directly part of the offer sheet itself. Otherwise a team like Philly could make that offer sheet to Weber and say they're going to give a 5th round pick as compensation. There has to be a negotiation in the trade for the compensation of the offer sheet.

 

[squidz*]

I think we all agree that if it's broken it's because the compensation is too low. Too risky for a team not to match and too easy for a team to offer a player means that it's not worth the effort most of the time.

I like the idea of making offer sheets more trade oriented as I suggested previously, but you cannot make it directly part of the offer sheet itself. Otherwise a team like Philly could make that offer sheet to Weber and say they're going to give a 5th round pick as compensation. There has to be a negotiation in the trade for the compensation of the offer sheet.

Teams would be inclined to offer decent enough value for the player because otherwise they need to structure the deal in a way that makes them worse off. If compensation for Weber's offer sheet was a 5th round pick, Nashville would have never even once remotely considered whether to match or not. They would match without question. But if there's concern about that sort of thing, a "minimum value" could be set still, although that could be interesting to define.

The point of the adverse trade is to provide RFAs with explicit negotiating leverage while still guaranteeing teams the ability to retain assets/collect value from lost assets.

 

[Guest]

The point being is even though Nashville matched Philly's offer, there was some debate whether or not they financially could do so. If the team making the offer sheet wanted to screw someone over financially then they could do it even easier if they dictated the compensation.

For example, what if someone wanted to poach Ekman-Larsson from Phoenix next year under those rules? Then they could throw an outrageous deal at him with little compensation and the Coyotes have no financial means to match that offer. That system works out worse for the poorest teams.

 

[squidz*]

The point being is even though Nashville matched Philly's offer, there was some debate whether or not they financially could do so. If the team making the offer sheet wanted to screw someone over financially then they could do it even easier if they dictated the compensation.

For example, what if someone wanted to poach Ekman-Larsson from Phoenix next year under those rules? Then they could throw an outrageous deal at him with little compensation and the Coyotes have no financial means to match that offer. That system works out worse for the poorest teams.

Except with extremely limited exceptions (literally just Weber in the history of this CBA) any such deal would harm the offering team significantly more than it would benefit them.

As I said, a "minimum compensation" could be implemented, which would resolve that issue (while being somewhat complicated in and of itself) if there was meaningful concern that such a thing could have happened.

 

[Stephen]

That idea may have some appeal in theory, but in practice it was a mess.

It's a messy affair when you're trying to poach talent, but meh, makes for more exciting summers and more dynamic player movement.

 

[Faltorvo]

What value is fair for offer sheet compensation on RFA's? One could argue with the limited regularity of offer sheets that the current value is fair. I think you could also argue that many GM's do not tend to consider offer sheets on RFA's because the home team is more likely to match the offer.

I'm not making this discussion on the basis that I want to see more RFA offer sheets or movement, but it's always been a value that didn't seem right to me.

Offer sheets since the last lockout:
2012: Shea Webber (NAS-PHI), 4x1st
2010: Niklas Hjalmarsson (CHI-SJS), 1st + 3rd
2008: Steve Bernier (VAN-STL), 1st + 3rd
2008: David Backes (STL-VAN), 1st + 3rd
2007: Dustin Penner (ANA-EDM), 1st + 2nd + 3rd
2007: Thomas Vanek (BUF-EDM), 2x1st + 2nd + 3rd
2006: Ryan Kesler (VAN-PHI), 2nd

Only Penner moved of those offer sheets.

I think you could argue that the value for offer sheets might be too high to entice GM's to make more offer sheets. Otherwise we would see more than 1 a year perhaps. There were no offer sheets from 1998 to 2006, but there was no salary cap. I think that GM's are using offer sheets as a tool to increase other team's cap when possible.

In the early to mid-90's offer sheets were much more common and typically more successful. Teams were allowed to trade assets as part of the compensation and they almost seem like they were used as a trading tool at that time.

Current compensation is for the current averaged salary is:
Nothing: Less than $1,034,250
3rd rounder: $1,034,250 to $1,567,043
2nd rounder: $1,567,044 to $3,134,088
1st + 3rd rounder: $3,134,089 to $4,701,131
1st + 2nd + 3rd rounder: $4,701,132 to $6,268,175
2x1st + 2nd + 3rd rounder: $6,268,176 to $7,835,219
4x1st rounders: $7,835,220 or more

It seems too cheap to only give up a 2nd rounder for a player making under $3M a year on a deal. It also seems relatively cheap to only give up 2x1st + 2nd + 3rd or 4x1st when you are talking about what is likely a franchise player.

Thoughts?

I think you are missing something here.

4x 1rsts from a team like Phil,Van,NYR,Pit not a bad deal.

Now what if EDM had done a Weber type deal 4 years ago? Whats the value of those 1rsts.

The RFA offer sheet compensation heavily favors the strong clubs.

 

[Faltorvo]

Offer sheets are a tool, and you can only judge a tool by the results it produces.

To judge if it's broken you first have to define it's intent. The offer sheet itself, not RFA, is meant to be a mechanism to acquire RFA's from other teams as free agents. In that regard it has not been successful since the early 90's before they seemed to be so strict with the draft pick compensation. Since then they have restricted teams from trading the draft picks from compensation for assets ala the TBL-PHI Gratton offer sheet. They have restricted the draft picks to be original picks.

I think a rather simple alternative would be this. A team offers the RFA the offer sheet. The original team has the right to accept those terms or reject them. If the original team rejects the terms then they must negotiate a trade of that player within a given period of time. If no deal can be agreed to within a time period it would go to an arbitrator to determine which teams trade proposal is most fair. It become a hockey trade that can be forced by an interested team. It likely reduces the poaching that we've seen in some of the offer sheet attempts to gauge a team financially because the team giving the offer sheet is responsible for coming to a reasonable trade which is more invested than a standard draft pick compensation.

I think you could see more player movement through offer sheets under that type of a system, but more importantly it would give GM's a tool that is more diverse than the limited one today.

Since Penner was the most recent offer sheet that wasn't matched, you would have seen Edmonton offer sheet Penner, Anaheim reject, and then both teams would have had to negotiate a fair trade. If neither side could agree then it would have gone to an arbitrator.

Nope , don't agree with this arbitration idea.

Gm's don't make deals when they don't know what they are giving up.

GMs have a hella time as it is making good calls on trade value, let alone some person with the title Arb.

What GM is going to make a trade where he has to open up his entire team system and allow the other GM to pick and chose un a baited and then hope to hell the Arb does not side with them.

Whats to stop EVERY case going to ARB when the team that got offer sheeted has absolutely nothing to lose?

Go to ARB with a slightly over valued trade prop and if i lose, AH well i get those 4, 1rsts.

 

[taunting canadian]

Maybe they should go back to the old model where teams could actually work out some kind of personnel compensation instead of being handed draft picks.

So if you sign Shea Weber to an offer sheet, Nashville could elect not to match, and then choose to take Couturier, B Schenn and Coburn or whatever, and the Flyers counter and an arbitrator chooses one.

The arbitrator system of RFA compensation was among the dumbest ideas the league has ever had. Plenty of WTF decisions, plus it would probably have a chilling effect on offer sheets since the team making the offer has no way of planning around the unknown player(s) they're going to be losing.

There's also nothing in the current system stopping the teams from working out a deal to trade some or all of the compensation picks back.

 

[Timmy]

The OS system is to protect the player from a GM who plays hardball and offers lower than market value to re-sign. Without the offer sheet threat, GM's could essentially hold a gun to their RFA's heads because the players' only other option would be a different league/sitting at home.

Given that the RFA's are entering into their prime and thus are theoretically the most valuable to a team at this point, they deserve to be compensated at fair market value, which they wouldn't necessarily be if GM's held all the cards.

The OS isn't a system designed to enable teams to frequently "poach" players, but rather a system that forces GM's to bargain in good faith with their RFA's. As such, compensation-paid levels should be kept low in order to keep the threat of an OS a reality.

 

[RandV]

The OS system is to protect the player from a GM who plays hardball and offers lower than market value to re-sign. Without the offer sheet threat, GM's could essentially hold a gun to their RFA's heads because the players' only other option would be a different league/sitting at home.

Given that the RFA's are entering into their prime and thus are theoretically the most valuable to a team at this point, they deserve to be compensated at fair market value, which they wouldn't necessarily be if GM's held all the cards.

The OS isn't a system designed to enable teams to frequently "poach" players, but rather a system that forces GM's to bargain in good faith with their RFA's. As such, compensation-paid levels should be kept low in order to keep the threat of an OS a reality.

Yes there's too much stupid on the trade board to discuss this but we probably saw this happen with the recent Voracek signing. It's a good deal for Philly, but when you consider the fact that it took 2 months or so to sign him, and look at the contract Philly signed Giroux to a year ago (lower cap of course, but Giroux was coming off a much better season), I'm sure Holmgren would have liked to sign Voracek for a bit less. He could have continued to play hardball to force Voracek to sign for under $4m, but delay too long and you risk someone coming in with an even greater $5m offer sheet.

I could be dead wrong about how it went down, none of us know how those negotiations went, but as an example the basic principle remains the same.

That said, I kind of like the idea of letting teams making the offersheet set their own compensation. There's some flaws but they can be worked around. One would be to tighten up front loaded contracts, something likely to come out of the current CBA negotiations, which would help protect a Nashville from getting low balled by a Philly. Another option would be to allow for a quick round of arbitration, if the defending team feels the compensation is too low they can challenge and bring it to an arbitrator, who won't 'adjust' compensation like in the past but simply has the power to nullify the offer sheet if compensation is ruled too low.