Understanding Hockey One Way Contracts: What You Need To Know

Welcome to our guide on understanding hockey one way contracts. If you’re a fan of the NHL or a player looking to make it to the big leagues, then you need to know about one way contracts. This type of contract can be both beneficial and detrimental to players, and it’s important to understand how they work.

In this article, we’ll take a deep dive into what one way contracts are, how they benefit players, and what the downsides are. We’ll also explore how one way contracts affect a team’s salary cap, and whether or not they’re common in the NHL.

Whether you’re a fan of the sport or a player looking to sign a contract, understanding the intricacies of one way contracts is crucial. So, let’s get started.

If you want to learn more about one way contracts in hockey and how they can impact players and teams, keep reading our comprehensive guide below.

What Is A One Way Contract In Hockey?

One way contract is a type of contract used in professional ice hockey where the player is guaranteed to receive the full amount of their salary regardless of whether they are playing in the NHL or the minor leagues. This means that if a player with a one way contract is sent down to the minors, they will still receive the same salary as if they were playing in the NHL. One way contracts are generally offered to experienced players who are expected to play in the NHL for the entire season.

For a player, a one way contract provides security and stability. It guarantees the player will earn a consistent salary, even if they are sent down to the minors. It also gives the player a sense of job security, knowing that they will not be easily replaced by a cheaper, less experienced player. For a team, a one way contract allows them to offer a higher salary to a player in order to entice them to sign with the team.

It’s worth noting that the opposite of a one way contract is a two way contract, which means that a player’s salary varies depending on whether they are playing in the NHL or the minor leagues. Players with two way contracts typically earn a lower salary while playing in the minors, and a higher salary while playing in the NHL.

Definition of a One Way Contract

A one way contract is a type of contract used in professional ice hockey, which guarantees a player a certain salary regardless of whether they are playing in the NHL or in the minor leagues. This means that if a player signs a one way contract, they are entitled to their full NHL salary even if they are sent down to the AHL or other minor leagues.

One way contracts are typically given to established NHL players or top prospects who are expected to make the NHL team right away. These contracts are designed to provide job security and financial stability to players, while also giving teams flexibility in managing their rosters and salary cap.

It’s important to note that a one way contract only guarantees a player their full salary if they remain on the NHL roster. If they are sent down to the minors and their salary exceeds a certain amount, it can still count against the NHL team’s salary cap.

Examples of One Way Contracts in the NHL

Connor McDavid, the captain of the Edmonton Oilers, signed an eight-year, $100 million contract in 2017, which includes a one way clause.

Carey Price, the starting goaltender for the Montreal Canadiens, signed an eight-year, $84 million contract in 2018, which also includes a one way clause.

Steven Stamkos, the captain of the Tampa Bay Lightning, signed an eight-year, $68 million contract in 2016, which has a full no-movement clause, making it a one way contract.

Auston Matthews, the Toronto Maple Leafs’ top center, signed a five-year, $58.17 million contract in 2019, which includes a one way clause.

Other notable players with one way contracts include P.K. Subban, John Tavares, Victor Hedman, and Johnny Gaudreau.

Having a one way contract doesn’t necessarily mean a player is guaranteed a spot on the NHL roster. Teams can still waive a player and send them to the minor leagues, but the player will still receive their NHL salary, which can have implications on a team’s salary cap.

How Does A One Way Contract Benefit A Player?

Guaranteed Income: A one way contract provides players with guaranteed income, which means they will earn the same amount of money regardless of whether they play in the NHL or the minor leagues.

Job Security: One way contracts also provide players with job security. They are less likely to be sent down to the minor leagues or released from their team, as their contract guarantees them a spot on the NHL roster.

Better Training Facilities: Players on one way contracts have access to better training facilities and resources, which can help them improve their skills and become better players.

Improved Negotiating Power: Players who have performed well on a one way contract may have improved negotiating power when it comes time to negotiate their next contract, as they have demonstrated their ability to play at the NHL level.

Opportunity for NHL Experience: One way contracts also provide players with the opportunity to gain NHL experience, which can be valuable for their future careers.

Stability and Predictability

Stability: One way contracts provide players with greater stability and security. With a guaranteed NHL salary, players can focus on their performance and not worry about their future. This stability also extends to their family and personal life, as they can plan ahead knowing that they have a steady income.

Predictability: One way contracts offer predictability for players. They know exactly what they will be paid for the season, regardless of whether they are sent down to the minors or remain with the NHL team. This allows players to budget and plan their finances, which is important considering the relatively short career span of a professional athlete.

Better negotiating power: A one way contract can also give a player more leverage in contract negotiations with their team or potential future employers. Having a guaranteed NHL salary demonstrates a level of skill and reliability, which can translate into higher salaries and better contract terms.

What Are The Downsides Of A One Way Contract For A Player?

While one way contracts offer many benefits to players, there are also some downsides that must be considered.

Less Flexibility: Players who sign a one way contract may find that they have less flexibility when it comes to their playing situation. They may be stuck on the NHL roster and unable to be sent down to the minor leagues.

Lower Salaries: One way contracts may also come with lower salaries than two way contracts. Players may be willing to accept a lower salary for the stability and predictability that a one way contract offers, but it is still important to consider the financial implications.

Pressure to Perform: With a one way contract, players are under pressure to perform well consistently in order to keep their spot on the NHL roster. If a player struggles, they may find themselves demoted to the minor leagues or waived altogether.

Limited Negotiating Power: When negotiating a new contract, players who have signed a one way contract may have limited negotiating power. Teams may be more likely to offer a lower salary or shorter term contract if the player is already locked into a one way contract.

Less Opportunity for Development: Players who are stuck on an NHL roster due to a one way contract may find that they have fewer opportunities for development. They may not be able to get as much ice time or play in as many games as they would if they were in the minor leagues.

Limited Flexibility

While one way contracts offer stability and higher salaries, they also come with limitations for the player. One of the main downsides is limited flexibility in terms of movement between the NHL and AHL. Players with one way contracts cannot be sent down to the AHL without first being put on waivers, and even if they clear waivers, their NHL salary will still count against the team’s salary cap.

For players who are struggling to find a regular spot in the NHL lineup, this lack of flexibility can be frustrating. They may be stuck in the AHL for extended periods, unable to seek opportunities elsewhere without the team’s permission.

Additionally, players with one way contracts may also have limited negotiating power when it comes to extensions or new contracts. Teams may feel less pressure to offer competitive deals since they know the player is guaranteed an NHL salary regardless of their performance.

Less Money in the Minor Leagues

Another downside of a one way contract is that if a player is sent down to the minor leagues, they will still receive their NHL salary. However, if they were on a two way contract, they would receive a lower salary in the minors.

This can be especially challenging for younger players who may not have established themselves in the NHL yet and are still developing their skills. They may have to spend more time in the minor leagues and receive less money than they would on a two way contract.

For veterans, this may not be as much of an issue since they may have already earned a higher salary and may be willing to accept a lower salary in the minors in order to continue playing the game they love.

Overall, it’s important for players to consider their options carefully and weigh the benefits and drawbacks of a one way contract before signing on the dotted line.

Can A Player Be Sent Down To The Minor Leagues With A One Way Contract?

Yes, a player with a one way contract can still be sent down to the minor leagues, but they will continue to receive their NHL salary.

This is because the salary on a one way contract is guaranteed regardless of whether the player is playing in the NHL or AHL.

However, if the player clears waivers and is assigned to the minor leagues, their NHL salary will still count against the team’s salary cap.

It’s important to note that a player with a no movement clause in their contract cannot be sent down to the minors without their permission.

Additionally, a player with a one way contract who is earning a high salary may be less likely to be sent down to the minor leagues due to their cost.

Yes, But It’s Rare

While it is possible for a player with a one way contract to be sent down to the minor leagues, it is relatively rare. In most cases, teams sign players to one way contracts with the intention of keeping them on the NHL roster for the entire season.

There are a few reasons why a team might choose to send a player with a one way contract to the minors. For example, if a player is underperforming or struggling with injuries, the team may decide that it is in their best interest to send the player down to get more playing time and regain confidence.

However, sending a player with a one way contract to the minors can have financial implications for the team. Since the player’s salary counts against the NHL salary cap regardless of whether they are in the NHL or AHL, the team may be hesitant to send the player down unless they are absolutely certain it is the right move.

Player Must Clear Waivers First

Before a player with a one-way contract can be sent down to the minor leagues, they must first clear waivers. This means that every team in the NHL has the opportunity to claim that player and take on their contract. If no team claims the player, they can then be sent down to the minors.

The waiver process is designed to ensure that players are not sent to the minors simply to avoid paying their NHL salary. It also gives other NHL teams a chance to pick up a player that they may be interested in, without having to trade for them.

If a player with a one-way contract is claimed on waivers, their new team will be responsible for their entire contract, and they will not be able to be sent down to the minors without going through the waiver process again.

It’s worth noting that not all players with one-way contracts are subject to waivers. Players who have played less than 80 NHL games or have been out of the NHL for more than 30 days are exempt from waivers.

Exceptions to the One Way Contract Rule

While a one way contract is binding for the majority of players, there are a few exceptions to the rule. One such exception is for players who are exempt from waivers, such as those on entry-level contracts or who have played in fewer than a certain number of games. These players can be sent to the minor leagues without clearing waivers.

Another exception is when a player with a no-movement clause in their contract is waived, which rarely happens. In this case, the player cannot be sent down to the minors without their consent.

Additionally, players who have been designated as injured or ill are exempt from waivers and can be sent to the minor leagues without being claimed by another team. This allows them to continue their rehabilitation in the minor leagues before returning to the NHL.

Finally, in some cases, a team may choose to buy out a player’s contract instead of sending them to the minor leagues. This allows the team to remove the player’s salary from their books while giving the player an opportunity to sign with another team.

What Happens If A Player With A One Way Contract Is Waived?

When a player with a one way contract is waived, they can be claimed by any other team in the NHL. If the player is claimed, they will be assigned to the claiming team’s roster and the claiming team will assume their full contract.

If the player is not claimed, they will be assigned to their current team’s minor league affiliate, but their contract will still count against the NHL team’s salary cap. This means that the NHL team will still be responsible for paying the player’s salary, but it will not count against their roster limit.

If the player clears waivers and is assigned to the minors, they can be recalled to the NHL team at any time, but they will be subject to waivers again if they are sent back down to the minors.

Other Teams Have the Chance to Claim the Player

When a player with a one way contract is waived, other NHL teams have the chance to claim them within 24 hours. If a team claims the player, they are obligated to take on the player’s contract and all its terms.

If more than one team claims the player, the team with the worst record gets priority. If no team claims the player, they become a free agent and can sign with any team.

It’s worth noting that if a player with a no-trade clause is waived and claimed, they still have the ability to veto the claim and remain with their current team.

Overall, the waiver process can be a stressful time for players with one way contracts, as they could potentially be claimed by a team that they may not want to play for, or be sent down to the minor leagues if they clear waivers.

How Does A One Way Contract Affect A Team’s Salary Cap?

Salary Cap is the total amount of money that a team can spend on player salaries in a given season. The One Way Contract has an impact on the team’s salary cap, as it guarantees the player’s salary regardless of whether they are playing in the NHL or the minors.

When a player with a one way contract is sent down to the minors, their salary still counts towards the team’s salary cap. This can limit a team’s flexibility in terms of signing new players or making trades to improve their roster. However, teams can use buried salary to alleviate some of the financial burden.

Buried salary occurs when a player with a one way contract is sent down to the minors and their salary is below a certain threshold. In that case, the amount of the player’s salary that exceeds the threshold doesn’t count towards the team’s salary cap. This allows teams to save money on their salary cap while still maintaining the player’s contract.

One Way Contracts Count Towards the NHL Salary Cap

When a player signs a one way contract, their entire salary is guaranteed, regardless of whether they play in the NHL or the AHL. However, the cap hit that the contract carries is determined by the player’s salary when they are in the NHL. This means that if a player with a one way contract is sent down to the AHL, their salary still counts against the NHL team’s salary cap.

This can be problematic for teams that have a lot of players signed to one way contracts, as it limits their flexibility in terms of making trades or signing free agents. If a team is close to the salary cap limit and they have players on one way contracts that they want to send down to the AHL, they may not be able to do so without exceeding the cap limit.

However, teams can sometimes get around this issue by using a number of strategies, such as assigning players to the long-term injured reserve (LTIR) or burying their contracts in the AHL. These strategies can be complex, and they require careful management of the team’s finances and roster.

Impact of One Way Contracts on Team Building

One way contracts can have a significant impact on a team’s ability to build its roster. Since players with one way contracts cannot be sent to the minor leagues without being exposed to waivers, they take up valuable roster spots and salary cap space. This can limit a team’s ability to sign or trade for other players.

Teams must carefully consider the impact of one way contracts when signing players, particularly those who may not be ready for a full-time NHL role. If a team signs too many players with one way contracts, it could limit their flexibility in making roster moves during the season.

On the other hand, one way contracts can also provide stability and certainty for players. Knowing that they will be paid their full salary regardless of where they play can give players peace of mind and allow them to focus on their performance on the ice.

Are One Way Contracts Common In The NHL?

One way contracts are fairly common in the NHL, especially for players who have proven themselves to be valuable assets to their teams. These contracts provide players with the security of a guaranteed salary, while also allowing teams to maintain roster flexibility.

However, not all players are eligible for one way contracts. Younger players or those with less experience may be signed to two-way contracts, which offer different salaries depending on whether the player is in the NHL or the AHL.

Some teams may also prefer to sign players to entry-level contracts, which have specific salary limits based on the player’s age and experience level.

In general, one way contracts are most common among veteran players who have established themselves as reliable contributors to their teams. These contracts are often used to retain key players and build team stability over time.

Despite their prevalence, however, one way contracts are not without controversy. Some have criticized them as contributing to the widening gap between high and low earners in the league, while others argue that they are a necessary tool for team management and player development.

Yes, Especially for Established NHL Players

One way contracts are particularly common among established NHL players who have proven their value on the ice. These players are typically guaranteed a spot on the team and a set salary, making a one way contract the most logical choice for both the player and the team.

For younger players or those who have yet to establish themselves in the league, a two way contract may be more common. This type of contract allows for the player to be sent down to the minor leagues without clearing waivers, and they receive a lower salary when playing in the AHL or ECHL.

One way contracts also provide more stability for players and their families. Knowing that they will be earning a set amount regardless of where they play can ease the stress of being a professional athlete, particularly for those with families to support.

Teams benefit from one way contracts as well, as they can help to create a more predictable and stable roster. By having established players under contract, teams can focus on filling any gaps or weaknesses on the roster rather than worrying about the uncertainty of player movement.

Overall, while one way contracts may not be appropriate for every player or team, they are certainly a common and useful tool for many in the NHL.

Frequently Asked Questions