A Primer on the Whole 50 Contract Limit Thing

Last month, the Sens signed 2011 1st rounders Stefan Noesen and Matt Puempel to 3 year Entry Level contracts and many Sens fans reacted with a “Great” followed almost immediately with a “So, umm why did they sign these guys now when they obviously aren’t suiting up for the Sens anytime soon?” Here is a primer on NHL team contract limitations and how it specifically impacts the Sens…

First off, the CBA sets definitive limits on a variety of criteria for every team.  There is of course, the 23 man NHL roster limit which cannot be exceeded during the season.  In addition to this, each team cannot have more than 50 players signed to standard player contracts during the season.  This includes the NHL roster, any AHL or ECHL players that have signed NHL deals (AHL-only contracts such as current Bingo roster players like Josh Godfrey, Bobby Raymond, Riley Armstrong and Maxime Gratchev etc do not count in this number).  Additionally, any signed player who has been “loaned” to a European club (such as Nikita Filatov and Jakob Silfverberg) will count towards that number as well.

On top of the 50 contract limit, each team has a total of 90 players they can carry on their “Reserve list”.  This includes all players under contract as well as unsigned prospects which the team holds the rights to and restricted free agents.  So for example, while Nikita Filatov is playing over in the KHL and being paid by his Russian team, he is technically still under contract to the Sens and being loaned.  He currently counts as one of the 50 contracts but once the season is over and his ELC expires, if the Sens qualify him (as Bryan Murray has stated is their intention) he will become a Restricted Free Agent and not be on the 50 contract list, just the 90 man Reserve list (until he decided to return to the NHL and sign a deal with the Sens, the team that holds his rights). Mika Zibanejad is also under contract and on loan to the SEL and his contract counts toward the limit.

The Reserve list seems to account for more room than you would ever need for all of your unsigned players so it probably is not a very relevant consideration for most teams.  This is especially true now that with the new CBA and the existence of Transfer Agreements between the NHL and European federations which do not allow you to hold drafted prospects rights indefinitely.  As it stands now, players drafted from Europe are under the same 2 year deadline to sign their prospects which has always been in place for their CHL counterparts.  This is why 2009 2nd rounder Silfverberg signed a deal with the Sens this past summer even though he was returning to the Swedish Elite League for another season.  The Sens needed to get him under contract or they would lose his rights.  Similar decisions will have to be made this summer with 2010 draftees Jakub Culek (3rd round) and Marcus Sorensen (4th round) from the QMJHL and SEL junior league respectively who both have potential but have drawn mixed reviews so far in their development.

Typically, these players are signed regardless of their status in the organization because teams do not like to just give up on prospects at such an early stage.  But a team that has loaded up so much on prospects in the past few years like the Senators will have to start making some tougher decisions with these players.  Even if you wanted to keep a long term prospect like Sorensen over in Sweden for another couple years, you are required to have him under contract to retain his rights and he will go toward that 50 contract limit.  When taking into account how many prospects you are continually adding to your AHL affiliate, you can only lend so many under contract players to European teams.  2009 7th rounder Emil Sandin was a casualty of this thinking as he had fallen off the map as a prospect and the Sens did not wish to add him to their contract list despite the possibility that he still had plenty of time to turn his fortunes around.  He was not offered a contract by the deadline last summer and is no longer included on the Sens reserve list.

Additionally, you have to consider your AHL roster as you still want to maintain a balance of prospects with AHL veterans like Corey Locke, Mark Parrish, Tim Conboy etc.  In theory, having your AHL team populated exclusively with all of your prospects seems great but in practice in order to have success, you need the veterans and just like the NHL, you want a certain number of veterans on your team in order to nurture your young players on how to be professionals.  Consequently, some of your contracts need to be allocated to these types of players as well.  At the same time, you can’t have too many of these guys under contract blocking your prospects and taking up contracts within your limit which is why Bingo’s roster got purged after the Calder Cup last year with the Sens refusing to resign UFA’s like Ryan Keller, Derek Smith, David Hale, Ryan Potulny and Andre Benoit while not even qualifying restricted free agents like Cody Bass and Geoff Kinrade.

And what about a guy like Roman Wick some may ask?  The Sens drafted him back in 2004, he was over in North America for a while, disappeared back to Switzerland forever and then the Sens signed him out of obscurity before last season in part because of his strong performance at the 2010 Olympics.  How did the Sens still hang on to his rights over that whole time?  The answer lies in the year he was drafted which was prior to the newest CBA being in place and at that time, European players drafted had their rights held indefinitely by the drafting team.  Those arrangements were grandfathered for players drafted prior to the lockout.  So players like Wick and some of the Russian draft picks who never ended up coming over to North America (Mirnov, Lyamin, Atyushov etc) could still be included on the Sens Reserve list unless the Sens have since removed them as a result of indifference.  There is also some confusion currently over players who get drafted out of Russia because the transfer agreement that exists there is shaky at best.  But since the Sens don’t draft Russians anymore, there’s no impact to them at the moment.

Prospects who play in the CHL have a slightly different determination afforded them when it comes to contracts.  Any drafted prospect who is signed to their ELC while still playing in the CHL (i.e. did not play more than 10 NHL games in the season) does not have their contract count against the limit that year.  For the Sens, this would apply to the aforementioned Noesen, Puempel and Mark Stone deals (who signed his 3 year ELC back in September).  Jared Cowen also was signed while still in Junior well ahead of when he joined the NHL squad.  So back to the original question, why are these players signed when they are?  Entry level contract terms, salary and bonuses are pretty much locked in based on draft position so there is no real advantage to the team or player based around the timing of the deal.  A player cannot increase or decrease the terms of their ELC based on performance after they are drafted so why sign any of these guys early?  The answer is mainly about how the team chooses to reward its CHL prospects more than anything.  The signing of the ELC is a confirmation that the organization is locked into the player for 3 years.  They will be paid (either in the NHL or AHL) over that time.  So it’s a sign that the team believes that the prospect has shown enough to deem worthy of that commitment.  It may be used as a carrot for a prospect for them to either achieve certain goals set out for them (off season conditioning, junior production etc).  And for the team, it avoids them having to deal with any kind of deadline when the two year period begins to approach.  But the biggest reason why the ELC’s are given earlier is because although the salary does not kick in until the player turns pro, the signing bonus which is part of the deal is advanced immediately.  For a junior player making next to nothing, this is a huge deal and one more way the organization can reward them for their development.

Finally, it should be noted that drafted players who go through the NCAA are not subject to the same deadlines when it comes to getting them under contract.  As the NCAA does not allow for any student athlete to enter into a professional contract while still in school, the deadline for signing prospects playing in the NCAA falls to August 15th in the year their Senior year ends.  The prospect also has the option of leaving school early and signing a pro contract at any time should they choose to.  Louie Caporusso was a prospect in this situation this past offseason.  His 4 years at Michigan were up and the Sens needed to sign him by August 15th or lose his rights and allow him to become an unrestricted free agent.  They ultimately ended up signing him but it was far from a slam dunk because of his status as a so-so prospect.  Different players are sometimes encouraged by their NHL team to come out early and go pro but for some of the longer term projects, teams sometimes would prefer for them to develop over their full college career and allow them to make a more informed decision on their future and whether they should be given a contract or not.  Patrick Wiercioch wanted to come out of college after his Freshman season and was convinced by the Sens to stay one more year.  Because of his draft position and potential, he would have been signed either way but lower round picks may need more time to bloom.  Who knows what would have happened if late rounders like Colin Greening and Erik Condra wanted to leave college early and not play out their careers there and develop into more legit prospects?

For those interested, Sens prospect defensemen Ben Blood and Chris Wideman are finishing their Senior years and will need to be signed this summer.  Based on their performances, they will undoubtedly be members of the Binghamton Senators next year.  There’s a decent possibility that they sign on near the end of this season once their college season ends the same way Mark Borowiecki and Derek Grant did last year.  Other Sens NCAA prospects like Michael Sdao, Brad Peltz, Bryce Aneloski and Jeff Costello are not in their Senior season but could always opt to leave early to go pro.  The smart money would appear to be on all of those players remaining in school though.

So where do the Sens currently sit when it comes to the 50 contract limit?  A quick check of CapGeek reveals 50 players under contract in the organization but that number includes the Noesen, Puempel and Stone deals which do not count so that would put them at 47.  A cursory glance around the league would indicate that this is a pretty normal cushion to have and there are even a number of teams that sit at 50 contracts so there would not be any issues that are impeding the Sens at this time.  Just like with cap space, it is always preferable to have a cushion should you want to have the flexibility to add players through a trade or free agency (Murray does like his annual March NCAA free agent signing) at any point during the year.  And as for next year, while there will be new additions to the contract number, there are also plenty of contracts expiring both at the NHL and AHL level.

Looking ahead, I’m interested in some of the decisions that may be more difficult than originally thought.  In times past, Restricted Free Agents were a given to be qualified at least but you can’t keep everyone and there are a few upcoming RFA’s  (and UFA’s) that may be causing some fiercer debate than normal in the Sens front office come June.  Peter Regin (RFA), Jesse Winchester (UFA), Brian Lee (RFA), Matt Carkner (UFA), Kaspars Daugavins (RFA), Zenon Konopka (UFA), Stephane Da Costa (RFA), Jim O’Brien (RFA), Pat Cannone (RFA) and Craig Schira (RFA) will be names to keep your eyes on this offseason.