Consider the offer sheet. A common lament from hockey media that teams do not use offer sheets. The complaining that teams don’t do it is right up there with the complaining about playoff seeding and the draft lottery in terms of NHL things that grinds their respective gears. It is rarely done for a variety of reasons. However, there is renewed hope that this offseason may be the first in a while where a team actually uses one. The 2019 offseason has some top-tier players about to become RFAs and those players are on teams who have a lot of cap space already commited next season. And the New Jersey Devils are in an unique position where this could be a viable tactic. Will they use it? Let’s consider the situation.
What is an Offer Sheet?
An offer sheet is basically a contract offer to a restricted free agent (RFA). If the player signs it, the original team can match the offer within seven days of the offer or take compensation for the signing. The compensation is based on the cap hit from the first five years of the offer sheet. The more it is, the more picks go to the other team. It is largely because of those two possibilities that offer sheets are rare in the NHL. The vast majority of restricted free agents are retained by their original teams. Rory Boylen at Sportsnet had this article from July 1, 2018 that provides an excellent summary of what it is and how it works. Check it out.
Why Should the Devils Consider an Offer Sheet?
For this upcoming offseason, there are some excellent players who are about to come restricted free agents on teams that may have difficulties retaining their RFAs.
The RFAs for 2019 include Tampa Bay’s Brayden Point, Toronto’s Mitch Marner, and Calgary’s Matthew Tkachuk among others. According to the full list of CapFriendly, there are a lot of seriously talented players who are still young and can absolutely help out any team in the NHL right away. As for the teams, there are some who will be in a really tricky spot. Toronto and Tampa Bay already have over $73 million committed to the cap for 2019-20. Calgary has much more room at a little over $66 million already committed for next season, but only 15 players signed and all of their pending RFAs (Tkachuk, David Rittich, Sam Bennett, Curtis Lazar) are due some significant raises. There could be other team situations, but those stand out to me at a quick glance.
This season, the New Jersey Devils took a big step back after a playoff appearance in 2017. Even before injuries have kneecapped the 2018-19 season, the Devils have lacked talent and suffered many losses after a hot start to this season. However, the team’s rebuild is not the same of where it was in 2015-16. General Manager Ray Shero does not really need to blow it all up and start over with who to build the team around. If the plan is to retain Taylor Hall and give Nico Hischier a big extension, then it is in Shero’s best interest to acquire talent sooner rather than later. They’ll be more likely to re-sign and stick around if it is clear that the team will add talent for 2019-20.
Let’s be real: it would be a massive upgrade if the Devils were able to snag someone like Marner, Point, or Tkachuk. Adding one of them plus a healthy (and secured) Hall plus an improving Hischier and Jesper Bratt plus competent goaltending plus improvements in depth plus maybe a top-tier prospect from the 2019 NHL Entry Draft and you have a team that, on paper, can not only make the playoffs but may even win a couple of games next season. A lot still has to go right but it is far more possible than the 2018 offseason strategy of “Run it back and hope for a repeat of 2017-18.”
If the 2019-20 compensation levels are anything like this season’s, then the compensation may be something the Devils can live with. The four-first rounders only kicks in for an offer sheet with a cap hit of over $10 million. An offer with a cap hit between $6.1 million and $8 million average accrued value only costs a first, a second, and a third round pick. Unless the 2020 draft class is amazing, giving up three picks for one year may be worth that accomplishment. The Devils can provide the picks for any compensation level. The Devils have re-loaded their prospect pipeline since Shero has arrived and they will have ten picks for the 2019 NHL Entry Draft. The system is not going to be so shortchanged if the Devils only have a handful of picks for 2020.
In Wednesday’s Devils in the Details, Nate linked this recent article by Pierre LeBrun at The Athletic about offer sheets. It includes a quote from Shero himself where he outright dismissed the idea of being against the offer sheet as a concept. LeBrun transcribed the response from Shero and it began with “Are you philosophically against improving your team? No.” The response is not something a GM would say if he was not at least thinking about it.
To recap: The Devils are not going to blow up and start another rebuild. They have incentives to make their team better sooner rather than later. There are RFAs on teams that would really struggle if given an offer sheet to sign. The Devils have the picks to account for any compensation. They can afford to give up picks for a draft class (and maybe first rounders for 2020 and 2021) since they have additional picks this year to keep the prospect pool full. Shero went on record to LeBrun that he is not against the idea of an offer sheet.
Oh, and the Devils have oodles and oodles of cap space and a rich owner so they can also afford a very expensive offer sheet.
It is admittedly exciting that this is a real possibility for the Devils. That they can make an offer sheet with an $8 million cap hit and it would only cost them their first three picks in 2020 makes it very tempting. It is a path that is bolder and more creative than just competing for unrestricted free agents on July 1 or hoping the draft provides a NHL player ready to go in October 2019.
However, I must pour the cold water of reality on my own excitement. Tempting as it is, there are many reasons to not get your hopes up for an offer sheet from the Devils.
Inherent Difficulties with Offer Sheets Dampen Hopes
An offer sheet needs the following to actually work.
First, the team must have their picks for compensation. They cannot use another team’s picks.
That’s not an issue for New Jersey. They also cannot be protected from the lottery. If Team A has to compensate Team B with a first rounder from an offer sheet, then Team B has that first rounder - wherever it may be. Should Team A faceplant in the following season, then Team B may have a first rounder in the lottery. Team B could get a top-tier prospect that would otherwise be Team A’s and help them out more. We are seeing this situation play out with Ottawa and Colorado. While that was a trade, Colorado is likely to add a prospect that Ottawa could really use for their future. We should hope the Devils do not end up in a similar spot. To that end, if the Devils are going to use an offer sheet, then they need to make sure they are actually good enough to make the playoffs unless they want to gift a team that might be good a high draft pick.
Second, the team who had the RFA has seven days to decide whether to match the offer sheet or accept the compensation.
With every offseason, teams with a lot of money committed to the cap for next season and/or has a lot of players to re-sign to significant deals are the subject of posts like this one explaining how an offer sheet can mess them up. It is true that Toronto and Tampa Bay are seemingly going up against the salary cap and Calgary could very well do so when they start re-signing players. However, these teams do not just sit around and go “woe is us.” They tend to make the moves they need to stay cap compliant and keep their players.
There is usually more wiggle room available for everyone in each offseason. The salary cap has either remained the same or increased - it has yet to go down. Unless something changed recently, teams are allowed to go 10% over the salary cap too. Most of all, teams can and have moved players to make space. The weekend of the draft is a popular time for trades and there have been some deals made because of a contract or a future one (e.g. the Devils obtained Kyle Palmieri at the 2015 Draft and Anaheim admitted they weren’t sure they could keep him after his contract at the time.) The seven-day time period can force their hand to make a move to allow them to match an offer sheet. It is more than enough time to swing a deal, even if it is not ideal, it can be done. What this all means is that when the GMs of Toronto, Tampa Bay, and others say they can match an offer sheet for their young star that is a RFA, they can usually find a way to make it work. It would be hard to swing a deal from a position of weakness, but it is possible.
So what that would mean is that for an offer sheet to not be matched, it needs to be targeted for a team that is in such a bind and for an amount that is so large, the team may decide to cut their losses and take the picks. In other words: the offer sheet may have to seriously overpay the player. At that point, the compensation in picks can get incredibly costly. It’s one thing to offer an $8 million cap hit and give up three picks in 2020. It’s another to go over $10.1 million and risk giving the other team four first round picks and realize that very few players in the NHL are worth such a cap hit. I like Point and Marner a lot but I do not know I would go that far for them - much less anyone else. Which brings me to the third and most important part for an offer sheet.
Third, and this is in bold, the player must actually sign the offer sheet.
The thing about the teams that could be targeted for an offer sheet is that they are good teams that could contend or expected to contend for a while. Tampa Bay has been a top team in recent seasons and could very well still be a top team for a few years longer. Toronto is built to be a strong team for a while. Ditto Calgary. If you’re Point or Marner or Tkachuk or any other RFA on those teams, then you have likely experienced some success and expect to have even more. So why would you want to sign with New Jersey?
It is not that Shero cannot sell other players on being a Devil. Again, there is Hall, there is Hischier and Bratt, there could be competent goaltending, and a player could be the one to get the Devils to where they want to be (or closer to it). Offering a metric ton of money would also be very convincing. But if they can get paid incredibly well by their current teams and keep a currently good-to-great situation going, then I do not know why they would want to leave that to go to a Devils team that is still, to a degree, re-building.
Also consider that the Devils are not the only team that could do this. Carolina and Colorado, for example, can also go to the extremes for compensation in an offer sheet and they may be playoff teams this season. If they are able to win some games and maybe even a round, then they can provide a more compelling case than the Devils. They can offer a ton of money and recent success so they’re not in a rebuilding situation. Colorado can even afford to be a bit more aggressive if Ottawa “wins” the 2019 NHL Draft Lottery; they have less of a need of a 2020 first rounder if they have get an ace prospect in 2019. Again, if you’re one of these players and you’re given multiple offer sheets, then why would you want to pick New Jersey? Even if the Devils offer the most money, the player can look at their situation and decide its not for them. At that point, the move is dead.
It is because of these three issues that offer sheets are so rare. If you, the GM, want the offer sheet to bring in a player, then you need to be a compelling place for the player, you’ll have to over pay them such that the team would not want to or cannot make room in seven days, and you need to hope that the picks you give up are not going to hurt you down the line - especially if you’re not much better in the following season(s). That is a lot to consider and account for, and it still is up to the player and the other team as to whether it even happens. I do not blame general managers for not utilizing offer sheets.
So What Should Shero Do?
This is not to say that Shero should not do it at all. If there is a situation where there is a reasonable chance to utilize it, then by all means, go for it. It may not be for a Marner or a Point, but it could be for other RFA players that could be useful and may not cost nearly as much. For example, Marner will likely demand and command a ton of money - but that may open a door to acquire another RFA from Toronto like Kasperi Kapanen or Andreas Johansson. Your mileage may vary if you want those players in New Jersey, but there are players to target beyond the biggest pending RFAs in the NHL. And it may be more likely to work if the timing is right.
What would be more even more practical is that Shero can use the offer sheet possibility as leverage in discussing a trade. Rather than go through the process of making an offer sheet, hoping and trying to have the player sign it, wait up to seven days to see if it will be matched, and then give up picks, a GM can just negotiate a trade. It is more direct. There is no waiting period. The intention is still clear and the cost of doing business may be cheaper. Look at it this way. One option is to throw an offer sheet with an AAV of $6.5 million at, say, Kapanen and giving Toronto the Devils’ first, second, and third round picks in 2020 and hope Kapanen signs it and Toronto does not match the sheet. Another would be for Shero to contact Kyle Dubas, offer a player or a couple of picks in place of dealing with an offer sheet, and the Devils could get Kapanen’s rights, sign him for a smaller deal than an offer sheet would, and possibly not give up something that would have been given up in compensation. There are not nearly as many challenges and outside of the trade, the cap hit for the next contract would not drive additional compensation (unless there was a conditional pick). I think the latter is more preferable over a potential offer sheet. It is also something Shero should be familiar with as he managed to swing deals for Palmieri and Marcus Johansson from teams that were not sure they could keep them beyond their contract and/or wanted to keep paying them.
I understand that the threat of an offer sheet may not provide a lot of leverage in a transaction, but it is something in Shero’s toolbox. I would not be surprised if his public dismissal about GMs not accepting the concept of the offer sheet was a tell that he could use it as leverage. We may never know, but that is the impression that I get.
I also think that is what Shero should do. If he is confident an offer sheet can bring in a top-tier player like Marner or Point, then I can understand it and possibly even agree it is a good plan to some degree. I don’t want the Devils to be without a first round pick for the next four drafts. But I think trying to work out a trade could accomplish the same thing without the drawn-out process that would come with an offer sheet and the cost of the offer sheet. I think we can all agree that the Devils need more talent for next season and beyond. Free agency absolutely should be considered, but in terms of getting someone younger and/or talented in a given role, then we should see a trade or two. His phone should be active in contacting other teams to bring in the talent the Devils need. Especially around the NHL Draft and all the way through mid-July.
Conclusions & Your Take
I sort-of understand the frustration from those in the hockey media and fans who want to see offer sheets being used. They’re allowed, so why are they so rarely used? But after thinking it out, my conclusion is that they can be more trouble than they are worth. The Devils are a team that is in a position where giving out an offer sheet may be a shrewd decision. I can agree that getting someone as skilled, talented, and (dare I say it?) elite or near-elite as Marner or Point may make worth it to deal with the challenges that come from it. But I am not confident that they would want to come here for a price that the Devils can afford. Especially if other teams who are in a better position than the Devils going forward are making offer sheets of their own; and especially since the Devils do need to have money and cap space available for signings this summer and extensions for beyond this summer.
That is how I see it. I admit that I could be missing something or I’m overly worried about the challenges. I also admit it is a very intriguing path. But I still do not think we’ll see one or that making one is something Shero should really do, much less something he really has to do. To that end, I want to know what you think. What’s your take about offer sheets and the Devils for this Summer? Do you think it is something the Devils can do and have it actually work? Who should the Devils target and why? Please leave your answers and other thoughts about offer sheets in general and whether the Devils should use them in the comments. Thank you for reading.