Should the Canucks be worried about an offer sheet for Elias Pettersson?

No.

Well, probably not.

The Vancouver Canucks need to negotiate new contracts for both of their best players this offseason. Both Elias Pettersson and Quinn Hughes played out the final year of their entry-level contracts in the 2020-21 season and their contract negotiations will shape the Canucks for years to come.

In the short term, the cap hits for Pettersson and Hughes will help determine how much cap space the Canucks have for acquiring other players via free agency or trade heading into next season. The long term effects will depend on whether Pettersson and Hughes take short-term bridge contracts or negotiate long-term deals that eat up years of unrestricted free agency.

As restricted free agents, Pettersson and Hughes have limited bargaining power. Neither one is eligible for salary arbitration, where they could argue to an independent arbitrator for a larger contract. Their main leverage is that the Canucks want to keep them happy and on the team for as long as possible and also want to avoid the possibility of them holding out beyond the start of next season.

There is one exception, however — offer sheets.

What is an offer sheet?

Any NHL team can sign a restricted free agent to an offer sheet, which is much like any other contract. The difference is that the player’s original team can match the offer sheet — with the exact same term, salary, and structure — within seven days.

If they don’t match the offer sheet, the original team gets compensated with draft picks that depend on the average annual value of the contract. The compensation can be as much as four first-round draft picks, a hefty price to pay but perhaps worth it for the right player.

Here are the compensation tiers for offer sheets for this coming offseason:

Would an offer sheet make sense for Pettersson?

Quinn Hughes isn’t eligible for an offer sheet as he hasn’t played enough seasons. Instead, he’s what’s known as a 10.2(c) restricted free agent.

Elias Pettersson, on the other hand, is eligible and is a tantalizing target for an offer sheet. After all, he’s a bona fide first-line centre and franchise forward. He was a game-changer for the Canucks as soon as he arrived and he’d certainly be a game-changer for any other NHL team.

In particular, an offer sheet for Pettersson would make sense for the expansion Seattle Kraken, who will have all kinds of cap space available. Certainly, giving up draft picks would be a risky move, but if they have an eye towards immediate Cup contention like the expansion Vegas Golden Knights, it might be worth it.

Keep in mind, the Kraken might be able to stockpile draft picks heading into the expansion draft, similar to how the Golden Knights took picks in order to select specific players from certain teams, so losing draft picks might hurt a little less.

So, here’s the hypothetical situation: the Kraken sign Pettersson to an offer sheet at, let’s say, $10.9 million per year for five years. The compensation would be two first-round picks, a second-round pick, and a third-round pick. If the Kraken are counting on those being late first-round picks, getting a player of Pettersson’s caliber might be worth the risk.

That would be very difficult for the Canucks to match given their cap situation but the Canucks also can’t afford to lose Pettersson. It would hurt a lot, but the Canucks would have to match the offer sheet, right?

Why NHL teams so rarely sign offer sheets 

It’s understandable that some might be concerned about this type of scenario, but there’s good reason to be skeptical that it would ever happen.

The truth is, offer sheets are exceedingly rare in the NHL. There have been just nine offer sheets signed in the salary cap era and just one in the last eight years. It is technically a tool in a general manager’s belt but, like a Yankee Screwdriver, it’s a tool that rarely gets used.

The reason is pretty simple: two different parties need to agree to an offer sheet and both have motivation not to do so.

First, a team needs to make the decision to offer a contract. The contract needs to be significant enough to make the player’s team refuse to match it, which means you’re risking significant assets. It also means you’re potentially overpaying the player, which could have consequences for your own salary cap situation in the future.

In addition, an offer sheet risks pissing off one of your fellow general managers, which might make it hard to make trades with them in the future. NHL GMs seem to avoid this more than in other sports, but also tend to be more vindictive as well.

Consider when the Canucks signed David Backes to an offer sheet back in 2008. The St. Louis Blues matched the offer sheet, then countered by vindictively signing Steve Bernier to an offer sheet a week later, forcing the Canucks to give Bernier more than they intended when they matched.

The only offer sheet in the last eight years was from the Montreal Canadiens to Sebastian Aho. It made sense for the Canadiens, who lacked a first-line centre, but also because the compensation for his $8.46 million cap hit was easy to swallow. They were also willing to offer an exorbitant signing bonus, hoping it would be a poison pill that would prevent the Carolina Hurricanes from matching.

It didn’t work. The Hurricanes matched and took Aho at a fairly reasonable cap hit for a player of his caliber.

In fact, just one offer sheet during the salary cap era hasn’t been matched — Dustin Penner in 2007. The other eight were all matched by the original team.

In other words, an offer sheet would risk sewering a relationship with another general manager and likely for no payoff, as the team is likely to match the offer sheet.

Why NHL players so rarely sign offer sheets

Then there’s the other side of it: the player has to agree to sign.

In Aho’s case, signing the offer sheet short-circuited what could have been a long negotiation process with the Hurricanes and got him a contract he was happy with much faster, while still keeping him in Carolina, where he wanted to be. He also knew it wouldn’t significantly impact the Hurricanes’ salary cap situation, as they were and are well under the cap.

Would Pettersson be willing to do the same? There might be benefits financially to signing an offer sheet, but knowing that the Canucks would certainly match, the downsides are significant.

It would potentially create some bad blood between Pettersson and the Canucks, as well as make it exceptionally difficult to build a strong team around Pettersson. It’s not just that the Canucks might not be able to have a strong bottom-six or improve their defence but that they would potentially have to trade a talented player to make room for Pettersson’s cap hit.

As much as Pettersson deserves to be well-compensated as one of the top players in the NHL, he also badly wants to win and won’t want to put the Canucks in a position where that would be harder than it needs to be.

If the team struggles, and Pettersson with them, that could even lead to getting less money on his third contract, typically when a star player like Pettersson cashes in. 

The risk of Pettersson signing an offer sheet is low

Considering Pettersson now has the same agent as Hughes, who will likely be negotiating both contracts in tandem with Benning and the Canucks, there’s not a lot of incentive to rush those negotiations with an offer sheet as Aho did. 

It arguably makes more sense for Pettersson and Hughes to sign cheaper, two-year bridge deals, then go big on their third contracts. That’s particularly true given the flat salary cap. Waiting for the cap to go up to sign long-term deals could net them a lot more money in the long run.

For a player like Pettersson, there are limited pros to signing an offer sheet and significant cons. Combine that with the factors that make opposing teams reluctant to hand out offer sheets and it quickly becomes clear why we so rarely see them in the NHL.

So, should the Canucks be worried about an offer sheet for Pettersson? As I said in the first word of this article, no.