NHL Explains Reduction in Contract Limits

The NHL sees certain benefits in shortening contract term limits.

Jun 3, 2023; Las Vegas, Nevada, USA; NHL deputy commissioner Bill Daly speaks at a press conference before game one of the 2023 Stanley Cup Final between the Florida Panthers and Vegas Golden Knights at T-Mobile Arena. Mandatory Credit: Lucas Peltier-Imagn Images / Lucas Peltier-Imagn Images

The NHL recently agreed to the framework and will soon kick off a new collective bargaining agreement (CBA) with some pretty big changes on the horizon. Among those changes within the league’s guidelines is a reduction in contract length for NHL free agents.

At the moment, free agents signing with a new team can sign for a maximum of seven years in length, while players re-signing with a team can get up to eight years. The new CBA will shorten each of those maximum deals by a season to six and seven years respectively.

NHL deputy commissioner Bill Daly explained the reasoning for the change in contract length in a recent interview with the Athletic.

“We’re in a situation where we have a number of contracts that are entered into for maximum term,” Daly said. “With the parties recognizing that the player’s not going to be really worth what the contract will pay him in the out-years of the contract.”

Teams want their players to be effective on the ice for the duration of their deals. It’s rare these days that a star athlete is still at the top of their game by the time their contract comes to an end, especially for unrestricted free agents who sign with a team on deals that carry deep into their 30s.

Hockey is a tough sport and some big name players see their skill deteriorate as they age. Some faster than others.

According to Daly, certain benefits in long-term deals will shrink as a result of the adjustment.

“The more purely monetary benefits of longer-term contracts are kind of scaled back a little bit,” Daly said. “That’s really the benefit.”

The NHL has a history of players forced into retirement due to injury but their contracts still float around the league. Montreal Canadiens superstar goalie Carey Price hasn’t played since 2022, but he still has a year left on his contract.

Oct 12, 2022; Montreal, Quebec, CAN; Montreal Canadiens goalie Carey Price (31) waves to the crowd during player introductions before the game against the Toronto Maple Leafs at the Bell Centre. Mandatory Credit: Eric Bolte-Imagn Images / Eric Bolte-Imagn Images

The Canadiens have been forced to place Price on long-term injured reserve in each of the past three seasons. They’ll likely place Price on LTIR again in 2025-26, unless they find a trade partner for the contract.

Trades for retired players contracts has also become common in the NHL. Hall of Fame defenseman Shea Weber last played in 2021, but just this past season had his contract moved from the Canadiens to the Chicago Blackhawks.

Chicago will likely place the final year of Weber’s deal on LTIR.

Shortening the term limits on contracts won’t completely eliminate these issues, but it will at least mitigate the risk teams take when signing max deals.

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