NHL Entry Level Deals: Are they fair?

NHL Entry Level Deals: Are they fair?

One of the less highlighted issues debated during the National Hockey Leagues (NHL) last collective bargaining agreement was the term of an entry level contract. This is a contract that every rookie must sign before entering the NHL.  This is a policy the NHL has implemented in order to limit the amount of money a rookie can earn in their first seasons in the league.  Last season the maximum rookie wage was $925,000, with bonuses they could earn up to $2,850,000.  The problem with these bonuses is that most of them are unattainable.  Players entering the league aged 18-21 must sign a 3 year contact, players aged 22-23 are required to sign a 2 year entry level deal, and players aged 24 only need  to sign a 1 year entry level contract.  Once a player has turned 25 they no longer have to sign an entry level contract when entering the league.  An entry level contract is also a two way deal, this gives owners flexibility to send the players down the minors and call them up to the NHL without having to worry about the player going through waivers.

In the past this form of cheap labour has hampered player’s development.  Rookies have been rushed into the NHL and put into roles that are not suitable for their growth.  Many top scoring prospects have been put into checking roles on the bottom lines, receiving minimal ice time. Small market owners do this to limit their total salary.  Instead of paying a veteran, they can call up a rookie for just half the price.  Large market teams bring in rookie players as a quick fix in order fit their squad underneath the salary cap.

Many players have had their best season after their first year and they should be given a chance to negotiate their after it.   For example in Alexander Ovechkin’s rookie season he finished third in league goals and points, he also made the NHL first team.  Even though he had proven he was one of the best players in the league he would still be signed for another two years on his entry level contract. In numerous cases after a players 2nd season they have already proven themselves.  There is no reason to limit their wages; it only benefits the owners who are able to get a cheaper bang for their buck.

The NHL is able to implement this policy because they have a monopoly over hockey in North America.  They are allowed to put in their own rules because they have no competitors.  This meant that players have no real threat to leaving.  They need to be careful though because they have competition in Russia for star talent with the KHL.  Players understand they can earn more in their native country for their first few seasons.   This policy might influence some Russian and European players from making the jump overseas to the NHL.

I believe this policy should be revised or terminated all together.  This could be a player’s one chance receive a big pay day and they are forced to wait up to three years. Many of these players won’t be able to sign a contract after their rookie deal expires due to injuries. It may be a risk for owners to sign rookies to large deals, but the NHL is a business and every business has to take risks.  They experience the same risks when they sign any player that they won’t pan out. The players exhibit the same risks every time they are told to put their body on the line on the ice.   In any business the owners have to take risks on new talent they acquire, they sign people to contracts and hope that these people can produce.  I would recommend that the players association should try to negotiate an end to this policy during the next collective bargaining period



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2 Responses to NHL Entry Level Deals: Are they fair?

  1. cgates14 says:

    Very good topic to blog about, although I respectfully disagree. If the league is to remain competitive, meaning that if managed well, any team can win the cup, teams must be able to draft and retain their own young talent. As you stated in the blog post, players on entry level deals are extremely important because they can play big roles on your team while not taking up much of your cap room. If players were not subject to entry level deals, small market teams would have a nightmare trying to retain their young talent, as teams like Toronto, Montreal, and the New York Rangers would be able to easily outbid them for star young players. For the health of all franchises in the league, the entry level and restricted free agent system must stay in tact. This way, teams can evaluate exactly what the player or prospect is capable of, and not base paydays solely off of potential that is so often not met.

  2. mb11oo says:

    The entry level contract clause was a term that was enacted in the collective bargaining agreement over a decade ago. It is important to realize that the NHLPA signed off on this and supported its implementation. The reason for its implementation was that NHL teams started to give out large contracts to unproven junior players. This had an inflationary effect on all salaries, but journeymen or “role players” were affected by high entry level salaries. Players who had in some cases played in the league for years made far less than a player who had just been drafted. The player whose career brought about the introduction of this rule was Alexandre Daigle. He was a first overall pick of the Ottawa Senators and instantly became one of the ten highest paid players in the league (over 2 million a season over 5 years when most of his fellow Senator teammates made less than 1 at the time).

    Daigle never had a productive NHL season, but made more money (as contracts are guaranteed) than most of his established teammates ever would in their whole careers. Needless to say NHLPA members were not happy. Neither were other owners. Hence the rule. The current rules actually help player development as it forces teams to make choices about entry level players by making them choose to keep a player in the NHL or send him down after a preset amount of games. This actually will help the development of the player as it removes the temptation to waste a season of a rookie players entry level status playing a small role for the team.
    Raising the rookie salary cap will not keep the KHL at bay as top teams in the league are owned by Russian oligarchs whose monetary capabilities know no virtually no limits. Few players would choose the KHL over the NHL as only a handful of KHL markets could offer what NHL ones can. Even Russians have been hesitant with mostly fringe players making the move to the KHL as of now.

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