What is NHL Salary Arbitration – We Explain All the Details

The NHL logo with hundred dollar bills in the background, represent NHL salary arbitration

The National Hockey League is not just a showcase for elite hockey players to display their skill and toughness; it’s also a complex web of business interactions. At the center of these business deals are hockey player’s contracts; the NHL has a hard salary cap, so teams try to save money as best they can to optimize their rosters and, in doing so, play hardball with contract negotiations. One method used in these negotiations is salary arbitration. But what is NHL salary arbitration, and how does it affect the relationship between teams and players?

Before the fans pack the arenas, before the puck drops, before the highlight-reel goals are scored, before the bone-crushing hits and glamorous fighters can do their thing, one crucial element must be taken care of, player’s contracts. In this article, we’ll examine what happens behind the scenes and the potentially ugly world of NHL salary arbitration.

What is NHL Salary Arbitration

Contract negotiations are a critical part of running an NHL team, but what happens when the two sides can’t come to an agreement on the dollar value? On one side, there is the player whose agent is trying to squeeze every last dollar out of the team to get their client the best possible deal, and on the other side is the team who is trying to pinch their pennies the best they can to save money to spend on other players. 

The Basics of Salary Arbitration

NHL salary arbitration is a mechanism used to settle contract disputes between players and their teams. It is a legal process where an independent, third-party arbitrator determines a player’s salary, typically when the player and team can’t agree on contract terms. Although the process may seem contentious, it’s fundamentally about fairness and market value.

Arbitration is more than just legalese; it shapes team compositions, influences player motivation, and can be as strategic as any on-ice game plan. The decisions that stem from this process resonate on and off the ice, impacting the sport’s landscape on a fundamental level. From contract disputes to player holdouts, the echoes of arbitration ring out across the hockey world.

The History of Salary Arbitration in the NHL

Salary arbitration was introduced in the NHL after the lockout in 1994 as part of the new Collective Bargaining Agreement, or CBA. This process was implemented to give teams and players another option to settle contract disputes.

A chart of how the salary cap has increased in the NHL.
Chart Courtesy: Novacapfans.com

Why Does Salary Arbitration Exist?

Salary Arbitration is not unique to the NHL; other professional sports leagues use this negotiating tool, as do many business corporations when negotiating contracts with their employees.  It provides a neutral and systematic platform to resolve salary disputes over player compensation. Without such a system, teams could exploit their negotiating power over players, or conversely, player demands could spiral out of control.

Historically, teams in the NHL held most of the negotiation power regarding contracts. Players, especially those not yet established as star performers, could find themselves with little leverage during salary negotiations. Arbitration was introduced as a means of leveling the playing field, offering a structured platform for players to negotiate their salaries based on a more balanced performance evaluation.

Finally, it serves as a critical element in maintaining the financial health of the NHL. It helps contain skyrocketing player salaries, ensuring that team expenditures remain within manageable limits. At the same time, it protects players from being underpaid for their contributions on the ice.

The Salary Arbitration Process

The arbitration process begins when a hockey player and the team cannot come to an agreement on a new contract and are faced with a deadlock. Either side can file for salary arbitration, a hearing date is set, and both parties prepare their case.

A hockey player checking an opponent into the glass boards.
Photo Courtesy: The Score

Player Eligibility for Arbitration

Not all NHL players are eligible for salary arbitration; only restricted free agents can file for arbitration. A restricted free agent is a player whose entry-level contract has expired but has not met the criteria to become an unrestricted free agent or UFA. 

The criteria for a UFA is the player must be over the age of 25 or have more than seven years of professional hockey experience (The AHL and European Leagues count towards this.) 

The Arbitration Hearing

Salary arbitration hearings are when both sides present their case to the independent arbitrator. The case essentially involves comparing a player’s skills, performance, and contributions to similar players in the league. The player’s side will outline why they think the player deserves more money than the team is offering, and the team will explain why the player doesn’t deserve more money. 

This is when things can start to get ugly because the team will bring up the player’s shortcomings and talk negatively about their play. Some players might get their feelings hurt and develop an unfavorable view towards the team even after the contract dispute is solved.

The Arbitrator’s Role

The arbitration hearing concludes after both sides have had their say, but the process does not end there. The arbitrator then has up to 48 hours to deliberate and reach a decision. This period is spent carefully examining the evidence, assessing the arguments, and comparing the player to others in the league.

The Arbitrator’s Verdict

It’s important to remember that this decision is binding, meaning it cannot be appealed or overturned. The team then has the choice to either accept the decision and sign the player at the determined salary or walk away, thereby making the player an unrestricted free agent. 

Only a one or two-year contract can be awarded during the player’s salary arbitration hearing. And the party that did not initiate the process picks the length of the contract. So if the player filed for arbitration, then the team picks if they want a one or two-year contract.


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Pros and Cons of Salary Arbitration

Now let’s step back and take an overview of the whole arbitration system. It’s got its good parts. It’s kinda like a safety net for the players, making sure they’re not short-changed based on how they’ve been performing and where the market’s at. And the teams get to sleep easy knowing exactly how much they’re shelling out and not dealing with over-the-top salary demands. 

Advantages for Players

When it comes to the players, the arbitration process is like their shield. It secures them a contract they can count on and a chance to make a case for what they believe is a fair paycheck. Plus, it gives them a bit of insurance against being undervalued, making sure they’re getting what they’re worth according to how they’ve played and what the league standards are.

Advantages for Teams

On the flip side, the teams get peace of mind from the whole thing. There’s this sense of certainty with costs – thanks to the binding power of the arbitrator’s decision, they don’t have to worry about players holding out for more money or making demands that don’t match their performance. That helps keep the budget in check too.


We’ve talked about the good parts of salary arbitration, but it’s not all sunshine and rainbows. The whole process can be a real headache for the players. Picture this: you’re a young player, and suddenly your performance is up for discussion in front of the whole wide world, not just in the locker room, but in front of everyone. That’s a lot of pressure, right? It could easily turn your focus away from the game.  And it’s not just about the player – the rest of the team can get caught up in this distraction too.

Sure, it’s all business, and the criticism is made in a professional setting, but let’s be real – it’s got to sting. Feeling like you’re undervalued, that can be a tough pill to swallow. And it might just leave a lasting mark on the relationship between the player and the team.

How Many Players File for Arbitration?

Salary arbitration in the NHL is frequently used during contract negotiations; the number of cases varies from year to year, but generally, it’s around 20-30. In 2022 there were 20 arbitration cases, and in 2023 there were 23. It’s important to note that most cases do not make it to the hearing.

The process of filing for arbitration often acts as a catalyst for negotiation between the player and the team. Once a player files, the looming arbitration date can pressure both sides into finding a middle ground to avoid the formal hearing. Consequently, many filed cases are settled before they reach the hearing stage, as both parties strive to negotiate a mutually agreeable contract.

Here is the list of the NHL players who have filed for salary arbitration.

Final Thoughts on NHL Salary Arbitration

Salary arbitration is a vital cog in the NHL contract negotiation machinery. It ensures fairness and balance in player contracts, providing an avenue for dispute resolution. However, like any process, it has its share of pitfalls. These include the risk of damaging player-team relationships and the stress it places on players.

The process will persist as a balancing act between teams seeking to manage their payroll and players striving for fair compensation for their skills and contributions. It remains an integral and complex part of the business of professional hockey.  As the NHL continues to evolve, so too will the conversation around the effectiveness and application of salary arbitration.

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