Hockey trades are a fun part of following the NHL. It is fun to speculate on them and see them come to fruition. However, they can, also, be quite confusing and complex.
How do hockey trades work in the NHL? Teams are allowed to trade player(s) for other player(s) or draft pick(s). Teams can retain part of a traded player’s salary, but are not allowed to buy players or transfer money.Embed from Getty Images
A player can be traded for the following:
- Another player – one or multiple
- Draft pick – one or multiple
- Future considerations
- Or a combination of the above
This is the basic layout of how a hockey trade works. Let’s go over some examples using the above list, before we get into some of the nuances and complexities around NHL trades.
Most Common Types of NHL Trades
Basically, there are three scenarios that happen in NHL Trades:
- A player from Team A is traded for a player from Team B
- A player is traded for a draft pick
- Multiple players or draft picks are trade for multiple players or draft picks
1) One player is traded for another player
This is the most straightforward NHL trade there is. A player from one team is traded for a player from another team. The deal is done, the players switch teams, and everyone goes on their merry way.
The most famous and recent example of this would be the Taylor Hall for Adam Larsson trade in 2016. It is famous because everyone could not believe that the Oilers only got Larsson for former 1st overall pick Taylor Hall.
Bob MacKenzie the sports reporter famously tweeted out:
This is an example of a one-for-one trade. A player from one team is traded for another player from another team. (This was a bad trade for the Oilers because they should have been able to get a better player, or, at least, an additional draft pick).
2) Player for a draft pick
This is the most common type of trade.
Each year a team is given seven draft picks for the NHL entry draft, which is where they select the young 18 year old amateur players who they get to build the future of their club with.
A team has the ability to trade one or more of those picks for future entry drafts in exchange for a player from another team.
Here is an example of a player for a draft pick trade:
The Carolina Hurricanes traded defensemen Jake Bean to the Columbus Blue Jackets for a 2nd-round draft pick in the 2021 entry draft.
The Blue Jackets got a good young prospect in Jake Bean, whereas the Hurricanes got the right to use the Blue Jackets 2nd of their 7 seven picks to select whichever prospect they wanted (it turned out to be defensemen Scott Morrow).Embed from Getty Images
Why would a team trade a player for a draft pick?
Teams are willing to do these trades for a number of reasons, but the most common is that one team is good and the other team is not.
If you are a team that is good you are willing to sacrifice the future (in young players through draft picks) for immediate help to your team. If you are a poor team, you are willing to trade a current player for the potential of a better player down the road.
Teams who are poor will often go through rebuilds and trade a bunch of their good talented players for draft picks in the hope of drafting even better young skilled players.
It is all about teams who are trying to balance winning now versus building for the future.
3) Multiple Players and/or draft picks for Multiple Players and/or draft picks
Trades are complex in trying to match value for equal value so multiple players and draft picks are often exchanged to balance things out.
For instance, a big trade that fits into this category was Jack Eichel to the Vegas Golden Knights:
As you can see Eichel along with a 3rd-round pick was traded for two players, Alex Tuch and Peyton Krebs, and two draft picks.
Eichel is a superstar so there are not really any other players of the same caliber that another team wants to trade. Superstars are not traded often! Therefore, multiple players and draft picks are needed as compensation to get enough value for him.Embed from Getty Images
Buffalo wanted 4 different pieces (players or draft picks) for him, which they got, but the Vegas got Buffalo to toss in a 3rd-Round pick. At the end of the day, both teams got the value that they deemed worthy to make this trade.
Nuances and Conditions around NHL Trades
We have gone over the basics of NHL Trades, but, of course, there are many nuances and complexities around these deals. Let’s go over some of the common scenarios around trades that you may see.
Conditions on NHL Trades
When trading a player for a draft pick NHL teams often make conditions on the draft pick. A condition is a stipulation that if a certain event happens then the deal will be altered.
For instance, if a team trades a first round draft pick for 2023 they will attach a condition on it that if that pick ends up being in the top 10 of that draft then the deal will be altered so the 2024 first round pick will be sent instead.
This is the type of condition that a manager attaches so that there is a lower chance of them missing out on a high draft pick.Embed from Getty Images
Basically, NHL GMs (general managers) are trying as hard as they can to hedge themselves against overpaying for a player. These conditions provide a bottom for how bad the deal can ever get.
NHL GMs are very creative and conditions have increasingly become included in NHL trades.
Examples of other notable types of conditions on trades:
- If a player traded for gets to the Conference finals or Stanley Cup finals, the 4th round pick becomes a 3rd round pick
- If the player traded for plays at least half the games in the regular season and playoffs then the 3rd round pick becomes a 2nd round pick
- If the player traded for scores more than 20 goals, then the 3rd round pick becomes a 2nd round pick
There are limits on what NHL GMs can do with conditions. For instance, the NHL took away the GMs right to make conditions on whether a player that is traded for resigns with the club that acquired them.
Future Considerations is a seldom used feature in trades, but will be used when trading a fringe NHLer from one team to the next.
Essentially, future considerations is an IOU for a player. The team who is giving up the player doesn’t really need the player so they trade them away, and somewhere down the line they might get, for example, a 7th round pick in return.
These are never high-end trades and rarely make the news.
How the Salary Cap affects trades?
When teams are trading players they always have to be mindful of how much a player makes and if it fits into their salary cap.
Each team is allotted a certain amount of money they can spend on players each year (at this time it is $81.5 million dollars). The NHL rules clearly stipulate that you cannot spend over this amount – of course, there are a lot of exceptions with injuries etc.Embed from Getty Images
Most teams are very close to the $81.5 million salary cap so it is hard for them to trade for another player from another team. Therefore, most trades involving players need to involve equal money on both sides.
This means that roughly the amount of money you trade away with a player needs to come back from the other team.
This isn’t always the case as some teams are well below the Salary Cap and actually take on player’s salaries from other teams, and can negotiate draft picks to take on those salaries. The other team does this so they can sign players to existing contracts they couldn’t initially fit within the salary cap.
All this to be said, when you are looking at trades the money that the players are making is almost as relevant to the talent level of the player being traded. If you cannot make it work moneywise it doesn’t matter how good the player is, a team just cannot do it.
What is Salary Retained in NHL trades?
Salary retained is a tool in trades that allows teams to keep a portion of the salary of a traded player, which then stays under their salary cap. This mechanism helps facilitate trades given the restraints of the salary cap.
A team is able to retain up to 50% of a player’s salary they trade. This enables a team acquiring the player to fit the player into their salary cap situation, whereas they normally would not be able to.
Two important conditions around salary retained are:
- You have to retain the salary for every year left on the contract. For example, if a player has 3 years left and a team retains 30% of the contract then the team must retain it for all 3 years of the contract
- A team is only to have 3 retained salaries on the books at any time.
Can NHL teams buy players? Transfer for players?
An NHL team cannot sell players for money or transfer players for money with another NHL club. For a trade to happen there must be an exchange of either players or draft picks, however a team can retain a portion of the traded player’s salary.
There is a transfer agreement between the European Leagues and the NHL that if a player signs from one of those leagues there is a pre-negotiated amount transferred.Embed from Getty Images
However, there is no buying and selling of players between NHL clubs.
A transfer of money used to happen in the past and the most famous NHL player ever – Wayne Gretzky – was traded to the LA Kings from the Edmonton Oilers and part of the package was a large financial payment.
But, that does not happen anymore.
Players and draft picks are the only asset a team can trade and receive in NHL trades.