What Happened in the Kessel Mess?

This summer the Toronto Maple Leafs were involved in one of the more confusing transactions this offseason when they traded for Phil Kessel who was then a member of the Boston Bruins. The confusing part was the fact that Kessel was a RFA (Restricted Free Agent).

In the National Hockey League, there are two types of free agents. The first is UFAs or Unrestricted Free Agents. Players become an Unrestricted Free Agent when their contract runs out and they can therefore, in the offseason, sign with any team they choose. There are no restrictions on where these players may sign, and their former team has no say on where they sign. The other is Restricted Free Agents. These players must be under the age of 25 with an expired contract. The difference between RFAs and UFAs is that if a team signs an RFA, it is called an offer sheet, which the RFAs former team can choose to match the offer and keep the player on their team at the contract specifications offered by the other team or let the player go to the other team and receive draft pick compensation. For example, since Kessel was an RFA, the Leafs could offer him a contract, and the Bruins had the choice between matching that contract and keeping Kessel or letting him go to the Leafs and getting draft picks in return. The draft pick compensation increases as the contract increases. If a contract is offered for $1 million per year, the compensation is a third round draft pick, but if the contract offer is over $7 million, the compensation is 4 first round picks.

Since there is a salary cap, the strategy of opposing teams is to offer the RFA an amount high enough that would put the team over the cap, but low enough to give up a small amount of draft pick compensation. The Leafs would have needed to offer Kessel a $5.5 million dollar contract to put the Bruins in a position where they would be over the cap, and the Leafs would have had to forfeit a 1st, 2nd, and 3rd round pick. Why then, would they decide to trade TWO 1st round picks, a 2nd round pick and a 3rd round pick, giving up an extra 1st rounder instead of signing him to an offer sheet?

The Bruins openly said that they would match any offer sheet given to Kessel. Teams are allowed to exceed the cap amount in the offseason by a small amount, and the Bruins would have simply needed to trade some more expensive players. Brian Burke, the Leafs GM, was then forced to trade for Kessel for the increased price.