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2021 Offer Sheet Compensation

June 28, 2021 at 3:00 pm CDT | by Gavin Lee Leave a Comment

Though still rare, we did see an offer sheet make an impact in the 2019 offseason as the Montreal Canadiens signed Sebastian Aho to a five-year deal. It was quickly matched by the Carolina Hurricanes, meaning Aho stayed put and the team had to turn down a big package of draft picks that Montreal would have had to surrender.

Offer sheet compensation is based on the average salary of the league, and Elliotte Friedman included the thresholds for this year in his latest 31 Thoughts column for Sportsnet. Below is the full breakdown, with the contract’s average annual value placing it in one of seven tiers:

$1,356,540 or less No compensation
$1,356,540 to $2,055,364 Third-round pick
$2,055,364 to $4,110,732 Second-round pick
$4,110,732 to $6,166,096 First and third-round picks
$6,166,096 to $8,221,463 First, second and third-round picks
$8,221,463 to $10,276,829 Two firsts, a second and third-round picks
Over $10,276,829 Four first-round picks

For the first time in quite a while, these thresholds actually decreased from last offseason, thanks to the pandemic-related squeeze on player contracts. The average league salary finished at $2,960,905 according to Friedman, an 11.6% fall from 2019-20. Because of that decrease, the numbers for compensation have similarly fallen; last offseason, you could sign a player up to a $1,439,820 AAV without being required to give up any compensation.

It is important to note that any team trying to sign a player to an applicable offer sheet must use their own draft picks for compensation, not ones that have been acquired. That rules several teams out already from signing high-profile RFAs unless they were to work to reacquire their picks before submitting the contract. An offer sheet’s average annual value is also calculated slightly differently than a normal contract; if the contract is of a length greater than five years, the total salary is still divided by five to determine the AAV. That would mean a seven-year contract worth $8MM per season would actually carry an AAV of $11.2MM for purposes of offer sheet compensation.

There are some restricted free agents, like Vancouver’s Quinn Hughes, that have not accumulated enough time in the NHL to be eligible for an offer sheet. For more information about the details of offer sheets, check out CapFriendly’s FAQ.

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