Courtesy of Point Park University

Primer: Understanding salary arbitration


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Zach Aston-Reese. -- MATT SUNDAY / DKPS

The NHLPA announced Friday that 40 players elected to file for salary arbitration. Zach Aston-Reese is among them.

How does the process work? Why do players or teams elect salary arbitration? Who is even eligible to file for salary arbitration?

This primer will answer your questions.


Salary arbitration is a way for restricted free agents to ensure they get paid the fair market value in their new contract. An independent arbitrator hears the case from both the player and his team, then sets the player's salary.


Either the player or team can file for salary arbitration.

Players elect arbitration if they believe their fair market value is higher than the qualifying offer they were given, or other offers given to them in the negotiation process.

Teams can elect for arbitration in two different ways. If the player had a salary of at least $1.75 million the previous season, the team can elect arbitration rather than making a qualifying offer. If the player's salary was under $1.75 million and the player has not accepted his qualifying offer, the team can elect arbitration.

A team can only elect arbitration for two players on its roster in a given season, and a player can only be taken to arbitration by a team once in his career.


Arbitration is only for restricted free agents. For a restricted free agent to qualify, they must have accrued a certain number of professional seasons played in North America, with the number of seasons being determined by the age they signed their entry-level contract.

Signing Age Seasons of professional experience required
18-20 4 seasons
21 3 seasons
22-23 2 seasons
24+ 1 seasons

For these purposes, a "season" is accrued when one of the following happens:

• A player aged 18 or 19 plays in ten or more NHL games in a given season.

• A player aged 20 or older plays in 10 or more professional games (which includes minor-league games)

CapFriendly has a tool to search if a player is eligible to request salary arbitration.

Example: Marcus Pettersson is a restricted free agent in 2019. He signed his entry-level deal at age 19. He has only played two professional seasons in North America, so he is not eligible to elect arbitration.


Players must file by 5 p.m. on July 5.

Teams must file by 5 p.m. on July 6.

If a team is electing arbitration for a player who had a salary in excess of $1.75 million rather than extending a qualifying offer, then they must elect to do so by June 15 or 48 hours after the Stanley Cup Final has ended, whichever is later.


Cases are heard over a period between late July and early August each year.

In 2019, the arbitration process will take place from July 20 to Aug. 4.


Teams, players, and their representatives have an in-person hearing in Toronto with an independent arbitrator. Prior to the meetings, both sides must submit briefings detailing all evidence that will be presented in their hearings. Each side has 90 minutes to present their case, with time for rebuttals. The arbitrator then has 48 hours to make a decision.

A player must receive at least 85 percent of his previous year's salary in the arbitration process.

The following evidence is admissible in arbitration hearings:

• A player's performance in the previous season or seasons. Evidence can include real-time statistics such as hits, takeaways, and giveaways.

• Games played by the player in previous seasons, and time missed due to injuries or illness

• The amount of time a player has been in the league or with a team

• The value a player has to the team's success

• Leadership qualities or public appeal (popularity) of the player

• The compensation of other players in the league who are comparable and signed as restricted free agents

The following evidence is not admissible in arbitration hearings:

• The compensation of comparable players who signed as unrestricted free agents

• Media reports, video, or other testimonials

• The salary cap space of the team or the financial condition of the team


The arbitrator sets the player's salary, which includes base salary and signing bonuses. Since two-way contracts have different salaries if a player is in the minors, the arbitrator also sets the minor-league salary.

The arbitrator must also include a written statement explaining the ruling.


In most cases, the arbitrator's decision is binding. However, if a player elected the arbitration and the arbitrator's decision is for a one-year deal with a salary in excess of $3.5 million, the team is allowed to reject the decision and the player becomes an unrestricted free agent. If the decision was for a two-year deal in excess of $3.5 million, the team can opt for only a one-year deal with the given salary, and the player will become an unrestricted free agent the following year.

If the team elected arbitration, they must accept the ruling as is.


Not often. Every year, many players or teams around the league elect salary arbitration. Usually, both sides reach an agreement before the hearings take place. A team and player can even go through the arbitration hearing and reach an agreement on their own before the arbitrator issues a decision.

So, why do players or teams elect arbitration, knowing they likely won't even reach the hearing process? It creates pressure to get a deal done.

Arbitration hearings can get heated. Teams don't want to sit in a hearing with one of their young players and rip his performance, impact, and popularity in front of him to an arbitrator. Neither side wants to reach that point.

Restricted free agents have very little bargaining power. If they elect arbitration and can create that pressure, it gives them a little bit of negotiating power that they wouldn't have otherwise had.

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