If you haven’t yet read up on my brief history of Free Agency Before 1995 – On “Equalization”, I encourage you to do so.  It’s necessary to establish a foundation before going further.  If you choose not to do so first, I’m attempting to write this in a way so that you won’t be completely lost.

Everything between the lines is directly copied from the parallel essay Free Agency From 1995-2004 – The Group II Cold War.  The first and last paragraphs are in purple text, just in case the lines don’t render properly on your computer or device; the first line of the new material is in blue text.  You’re free to skip ahead if you’ve already read about the Group II Cold War; the arena between the lines simply copies and provides a brief explanation of Group III, Group V, and Group VI free agents in the aftermath of the 1995 lockout and CBA.

Out of the burning, charred remains of the old pre-1995 free agency system came a completely new way of doing things.  Since a good chunk of this website focuses on the teams that came into existence during the 1995-2004 period covered by the CBA from those years, it bears a closer look.

Equalization was gone, purged from the realm of reality to the depths of history.

Thankfully, the 1995 CBA is readily available, and will be heavily cited.

The pre-1992 CBA had Group III free agents defined as those age 31 and older, and provided the player’s previous team with either the right of first refusal on the new contract that he signed elsewhere or draft pick compensation.  The 1992 CBA dropped this age down to 30, causing more than a few headaches for GMs who were now faced with losing players they wouldn’t have otherwise lost with a more gradual phasing-in period.  The 1995 CBA completely overhauled Group III free agency.

From Section 10.1(a) – Group III Players and Free Agents:

1. For (A) the 1994/95, 1995/96 and 1996/97 League Years, any player who is 32 years of age or older as of June 30 of the end of the 1994/95, 1995/96, and 1996/97 League Year, as the case may be, and (B) the 1997/98, 1998/99, 1999/2000, 2000/01, 2001/02, 2002/03 and 2003/04 League Years, any player who is 31 years of age or older as of June 30 of the end of the 1997/98, 1998/99, 1999/2000, 2000/01, 2001/02, 2002/03 and 2003/04 League Year, as the case may be, and in either case has four (4) Accrued Seasons or more on June 30 of the end of the applicable League Year, shall, if his Player Contract has expired, become an Unrestricted Free Agent. Such player shall be completely free to negotiate and sign a Player Contract with any Club, and any Club shall be completely free to negotiate and sign a Player Contract with such player, without penalty or restriction, or being subject to any Right of First Refusal, Draft Choice Compensation or any other compensation or equalization obligation of any kind.

2. An Unrestricted Free Agent shall not be subject to any limitations on the period of time before which he may qualify as an Unrestricted Free Agent again, or to any limitations on the number of times he may become an Unrestricted Free Agent, except for a Group V Player, who may only elect to become a Group V Player once, but who may qualify to be another type of Unrestricted Free Agent in accordance with the terms of this Agreement.

The first part is pretty clear: a Group III free agent (unrestricted – UFA) had free and clear movement around the league.  No right of first refusal, no compensation, no equalization.  The second part removed old restrictions on the number of times that a player could become a UFA.  From here on out, a player could be a UFA as often as he wanted upon his contract expiring.

From Section 10.1(b) – Group V Free Agents:

Any Group V Player shall be entitled at the expiration of his Player Contract to elect to become an Unrestricted Free Agent by notifying the League and his Prior Club of such election on or before July 15 (or such other date as may be agreed in an applicable critical date calendar agreed to by the League and the NHLPA) of the League Year in which such player qualifies to become a free agent pursuant to this subsection. Upon making such election, such player shall be completely free to negotiate and sign a Player Contract with any Club, and any Club shall be completely free to negotiate and sign a Player Contract with such player without penalty or restriction, or being subject to any Right of First Refusal, Draft Choice Compensation or any other compensation or equalization obligation of any kind.

Eligibility for a Group V free agent was that a player had to have at least 10 seasons of experience and make less than the NHL average salary in his expiring contract.  Group V was an opt-in; the player had to notify the league and his prior team in order to actually become a Group V free agent.  If that was not done, he would fall under a different class of free agent.

Group V was created in the 1992 NHLPA strike as a mechanism for depth players to be able to move around the league, rather than live the sort of week-to-week instability that exists as a result of being at the bottom of a team’s depth chart while the years accumulate.

From Section 10.1(c) – Group VI Free Agents:

Any Group VI Player shall, at the expiration of his Player Contract, become an Unrestricted Free Agent and shall be completely free to negotiate and sign a Player Contract with any Club, and any Club shall be completely free to negotiate and sign a Player Contract with such Player without penalty or restriction, or being subject to any Right of First Refusal, Draft Choice Compensation or any other compensation or equalization obligation of any kind.

A Group VI free agent was a player who was 25 years old, had played three or more professional seasons, and had fewer than 80 NHL games by the time his contract expired (28 for goalies).  This specific mechanism was designed to prevent teams from acquiring prospects and then holding onto them indefinitely while seeing if they developed into useful players.  The message to the teams is fairly simple: shit or get off the pot.  If you haven’t made up your mind on a player by this point, let him go somewhere that could use him instead of tying him down until the end of time.

The 1995 CBA thus created three entire classes of UFAs, free and clear of things like equalization, compensation, and right of first refusal.

(Everything from here down is new.)

One of the biggest issues facing the NHL and its teams with the new CBA was fear.  It was possible for a team to draft a player at 18, develop him into a top-level player, and then years down the road lose him for absolutely nothing at all.  With the old system of equalization, an acquiring team would at least make whole the prior team.  Now, that couldn’t even happen.  Losing top-level players for absolutely nothing, not even so much as a pittance, wasn’t appealing.

I’ll step back for a moment to explain “make whole”, only because it was also an issue in the last CBA negotiations (2012-13).  Legally speaking, it’s based on the idea that one’s negative actions damage another party, and to pay (in some way) for those damages to the other party now makes them whole.  For example, if I loan my car to someone in good faith and he grinds the brakes flat, I (and my car) have been damaged; by the other person paying for new brakes, I (and my car) have now been made whole.  If I’m minding my own business and someone comes up and punches me and breaks my jaw, I have been damaged; the other person covering my medical bills makes me whole.  In the event that I missed time off of work and thus have lost wages as a result, I’m still damaged; them paying for my lost wages makes me whole.  The idea, though, is that if not for the actions of another person, I would not have been damaged and thus need to be made whole.

This is what the equalization system was based on.  I have lost my second-line winger, and by acquiring a second-line winger from the team that acquired him, my team is now made whole.  I have lost my young All-Star forward, and taking your Norris-caliber defenseman and adding him to my team makes my team whole.  If not for your actions in signing my players, I would not need to be made whole; you did, so I do.

The issue that the NHLPA had with equalization is pretty obvious.  The possibility of losing someone you don’t want to lose made teams skittish about signing free agents.  Because of this fear, movement by free agents was extremely limited.  As a result, the players as a general collective had their leverage and bargaining power significantly (negatively) impacted.  This created an artificial restraint on player salaries, which naturally is going to upset the NHLPA.  The only solution would thus to be overhaul free agency.

And, of course, the teams weren’t particularly happy about the fact that they could do everything right and yet still lose a player for absolutely nothing.  This is how we ended up with three classes of unrestricted free agents (Group III, Group V, and Group VI).

To quickly recap:

• Group III was for players who were 31 or older and had four accrued seasons.
• Group V was for players who were at least 28, had 10 seasons of professional experience, and made less than the league average salary.
• Group VI was for players who were 26 and had fewer than 80 NHL games, or 28 NHL games for goalies.

The feeling was that for Group VI, there was no reason why a player should be forced to remain in the system of a franchise that clearly had no intention of using him.  To continue to keep him would be grossly unfair to the player, and therefore the only solution was to allow him his freedom.

For Group V, if a player was valuable enough to be in the lineup every day to be able to reach an accrued season year after year, why was he paid less than the league average?  Why allow him to continue to squander more years of his limited career being strung along?  Therefore, he should be given his freedom as well.

Group III was the big sticking point, since this applied to all players who met a simple age and a very simple experience litmus test.  This covered everyone from a third-string goalie to a perennial All-Star.  And teams weren’t about to lose some of the best in the game for nothing.

As a result, the 1995-2004 CBA continued an amendment that Group III free agents would be secondarily classified as “compensatory free agents” (CFAs).  But where did the compensation come from, and in what form?

The answer is simple: a draft pick for compensation, and they would come out of thin air.  An acquiring team would not have to pay compensation to a prior team, but the prior team would acquire compensation in the form of a draft pick that did not previously exist.  (NOTE: The reason that, throughout this site, I refer to Group III as “UFA” and not as “CFA” is because the acquiring team gives up nothing themselves, and therefore there was no restraint on their movement.  Also, relative to some of the best talent in the game, I think it’s fair to say that getting a single draft pick after the 1st round as compensation for a perennial All-Star is negligible).

The complete breakdown can be found in Exhibit 15 of the 1995 CBA:

1. A Compensatory Free Agent (“CFA”) is defined as a Group III unrestricted free agent who signed a contract with a New Club. Clubs that suffer a “net loss” (as described below) shall be eligible to be awarded a Compensatory Draft Selection in the subsequent Entry Draft in accordance with the provisions of Paragraph 3 below.

2. The following calculation, calculated as of June 30 each year, based on a player’s (i) “average annual compensation” and (ii) honors, shall be used to determine a CFA’s ranking on a percentile basis as against all other players on Club rosters at the conclusion of a regular season:

1. All CFAs and other League players on rosters at the conclusion of a regular season shall be ranked in ascending order by their “average annual compensation,” which shall be determined by dividing a player’s Compensation (for all contract years) by the number of contract years. (Thus, the player with the lowest average annual Compensation shall be ranked first, etc.) Each player shall receive 1/100th of a point per dollar of his “average annual compensation.” Rankings and calculations for CFAs shall be based on the CFA’s new contract and shall be determined as of the first day of the regular season.

2. At the end of each year, the League shall assign to all such players additional points based on honors in the prior three Seasons, as follows:

   1. Twenty (20) points for being selected First Team NHL All-Star by the PHWA.

   2. Ten (10) points for being selected Second Team NHL All-Star by the PHWA, [or for being awarded by the Lady Byng or Masterton Trophies.]

   3. Thirty (30) points for being awarded the Hart, Norris, Ross, Vezina, Selke, or Conn Smythe Trophies.

   4. Ten (10) points for being selected Captain.

   5. Twenty (20) points for winning the Stanley Cup.

   6. Twenty (20) points if the player is 32 on June 30; fifteen (15) points if the player is 33 on June 30; ten (10) points if the player is 34 on June 30.

3. The sum of the numerical values in (a) and (b) above shall represent each player’s final numerical value.

4. The players shall then be re-ranked based upon such final numerical values.

5. Each CFA’s final numerical value shall be measured in percentile terms against all players’ (including the CFA’s) numerical values to determine the position, if any, of a Club’s Compensatory Draft Selection.

It’s a good thing this system didn’t come around until computers became widespread and Microsoft Excel 5.0 was on the market.

Short version: everyone in the NHL is assigned a point value based on age, status as captain, Stanley Cup wins, recent accolades, and average salary according to his expiring contract.  For Group III players, their average salary is based on their new contract.  The last part (average salary) is obviously based on the idea that the best players in the game are going to be paid like it, so it’s an easy way to separate the top free agents from the backup goalies who simply happen to have played on a successful team.

To create an example:

Defenseman A is 32 years old, was named captain of his team for the most recent season, and was a second-team All-Star but still won the Norris Trophy.  His most recent contract had an average annual value of $2 million.  After hitting the market, he signed a contract with a new team for an average of $3.75 million per year.

According to the schedule above: Defenseman A has 20,000 points based on his most recent contract, plus 10 points for being a second-team All-Star, plus 30 points for winning the Norris, plus 20 points for being 32 years old.  This gives him a total of 20,060 points.  However, because he is a Group III free agent, he is in the second part of Exhibit 15.2(a), which dictates that his salary points are based on his new contract.  This means that, based on $3.75 million per year, he’s at 37,500 points; with the bonuses added, that put him at 37,560.

Now, do this with every single player in the league…and run it through as prescribed by 15.2(d) and (e).  Every player in the league is ranked according to their point value, then broken down by percentile.

Why?  The rest of Exhibit 15 explains it:

3.

1. A Club shall qualify to be eligible for a Compensatory Draft Selection if:

   1. it has lost a CFA and not gained a corresponding CFA in an equal or higher percentile bracket (based on subsection (c) below); and

   2. the Club has suffered a “net loss” of CFAs when the numerical value of all CFA’s gained is deducted from the numerical value of all CFA’s lost;

2. The CFA’s for which a Club did not receive a corresponding CFA gain per subsection 3(a)(i) above shall then be ranked according to their numerical value. Then in descending order based upon a CFA’s numerical value, each Club shall be awarded a Compensatory Draft Selection based upon its CFA, up to a maximum of two per Club. This procedure shall continue until the available Compensatory Draft Selections are exhausted.

3. The position of a Compensatory Draft Selection shall be determined by a CFAs percentile ranking pursuant to 2(d) above and the following provisions:

   1. Clubs that lost a CFA within the top 5% of all League players shall receive a Compensatory Draft Selection no earlier than the 11th selection in the second round of the Entry Draft.

   2. Clubs that lost a CFA below the top 5% of all League Players but within the top 10% shall receive a Compensatory Draft Selection following the 52nd selection in the Entry Draft.

   3. Clubs that lost a CFA below the top 10% of all League Players but within the top 15% shall receive a Compensatory Draft Selection following the 78th selection in the Entry Draft.

   4. Clubs that lost a CFA below the top 15% of all League Players but within the top 25% shall receive a Compensatory Draft Selection following the 104th selection in the Entry Draft.

   5. Clubs that lost a CFA below the top 25% of all League Players but within the top 50% shall receive a Compensatory Draft Selection following the 130th selection in the Entry Draft.

   6. Clubs that lost a CFA below the top 50% of all League Players but within the top 75% shall receive a Compensatory Draft Selection following the 156th selection in the Entry Draft.

   7. Clubs that lost a CFA below the top 75% of all League Players shall receive a Compensatory Draft Selection following the 234th selection in the Entry Draft.

   8. The exact slot, subject to the above guidelines and availability of Compensatory Draft Selections, shall be determined by the Commissioner prior to the Entry Draft.

For why these selection numbers are what they are, it’s simple: with 26 teams in the league, they’re in multiple of 26.  The 52nd pick would be the end of the second round, the 78th the end of the third round, the 104th the end of the fourth round, the 130th the end of the fifth round, the 156th the end of the sixth round, and 234th the end of the ninth round (which was the end of the draft).

If you’re astute, you may have picked up on a couple of things that seem like glaring flaws.

First is that the moment that the initial compensatory pick gets slotted in, it creates a cascade all the way down to the end.  A compensatory pick between the 37th and 52nd pick means that the initial pick of the third round is now #54, not #53.  This means that the last pick is #79, not #78.  And obviously, there is more than one free agent signing per year, so it would just keep building further and further as the draft progresses.

Second is that the mere possibility of expansion is obviously excluded.  The selection numbers are based on the end of a certain round for a 26-team NHL and does not create any contingency plan for a 27-, 28-, or 30-team NHL (as would happen with the NHL’s expansion announcement in 1997, just two years after the CBA was drafted and ratified).

The reason why neither of these things are worth getting worked up over is simple.  For the first part, it’s not worth the hassle.  Besides, the actual number of the selection is a hell of a lot more important than the name of the round that it happens to slot into.  For the second part, even floating the possibility of expansion in negotiations as contentious and occasionally acidic as the 1994-95 CBA negotiations would be an extraordinarily shortsighted, and frankly boneheaded, move.  In an attempt to gain a bargaining point by polishing up some semantics, it would be possible to squander ten points by the NHLPA trying to find a way to get revenue from expansion fees to end up toward the players.

Remember, this is all collectively bargained.  Mention expansion as a possibility, the players want some of that money; in order to get them to drop that demand, you now have to give ground on something else that’s of greater importance to your position.  Congratulations, you’ve just pissed away valuable leverage in high-stakes negotiating.  And for what?  You’ve lost something of value for the next ten years of a CBA, and all in order to create some nice clean math.  That’s a hell of a waste.

Moving on.

The first free agent season under the 1995 CBA began in July of 1995, meaning that the first compensatory picks were issued for the 1996 Entry Draft.

They were:

• #54 – Buffalo receives for losing Dale Hawerchuk; they would draft Francois Methot
• #75 – Vancouver receives for losing Geoff Courtnall; they would draft Zenith Komarniski
• #89 – Calgary receives for losing Joel Otto; they would draft Toni Lydman
• #101 – New Jersey receives for losing Bruce Driver; they would draft Josh MacNevin
• #120 – Los Angeles receives for losing Grant Fuhr; they would draft Jesse Black
• #150 – Pittsburgh receives for losing Joe Mullen; they would draft Peter Bergman
• #170 – Pittsburgh receives for losing Kjell Samuelsson; they would trade this pick to Edmonton for Tyler Wright, while Edmonton would draft Brandon Lafrance

1997 saw more of the same, although the names were bigger.  There was also a weird one-for-one trade involving the last two picks.

• #40 – St. Louis receives for losing Wayne Gretzky; they would draft Tyler Rennette
• #58 – New Jersey receives for losing Phil Housley; they would trade this to Ottawa as part of a three-pick deal, and Ottawa would draft Jani Hurme
• #110 – Chicago receives for losing Joe Murphy; they would draft Ben Simon
• #134 – New York (Rangers) receives for losing Jari Kurri; they would draft Johan Lindbom
• #150 – Los Angeles receives for losing Tony Granato; they would draft Jeff Katcher
• #175 – New York (Rangers) receives for losing Kevin Lowe; they would draft Johan Holmqvist
• #180 – Boston receives for losing Dave Reid; they would draft Jim Baxter
• #185 – Tampa Bay receives for losing Michel Petit; they would draft Samuel St. Pierre
• #195 – Carolina receives for losing Brad McCrimmon; they would draft Niklas Nordgren
• #244 – St. Louis receives for losing Charlie Huddy; they would draft Marek Ivan
• #245 – Boston receives for losing Joe Mullen; they would trade this pick to Colorado for #246, and Colorado would draft Steve Lafleur
• #246 – Colorado receives for losing Dave Hannan; they would trade this pick to Boston for #245, and Boston would draft Jay Henderson

1998 saw another big name at the top.

• #40 – New York (Rangers) receives for lsoing Mark Messier; they would draft Randy Copley
• #52 – Washington receives for losing Rick Tocchet; this pick would transfer to Boston as part of a prior trade, and they would draft Bobby Allen
• #65 – San Jose receives for losing Ed Belfour; they would draft Eric Laplante
• #108 – Calgary receives for losing Dave Gagner; they would draft Dany Sabourin
• #118 – Colorado receives for losing Mike Keane; they would trade this pick to Washington as part of a four-pick trade, and Washington would draft Mike Siklenka
• #131 – New York (Rangers) receives for losing Glenn Healy; they would draft Tomas Kloucek
• #137 – Buffalo receives for losing Garry Galley; they would draft Aaron Goldade
• #143 – New Jersey receives for losing Dave Ellett; they would draft Ryan Flinn
• #151 – Detroit receives for losing Tomas Sandstrom; they would draft Adam DeLeeuw
• #223 – San Jose receives for losing Bob Errey; they would trade this pick to Ottawa in a one-for-one deal, and Ottawa would draft Sergei Verenkin
• #243 – Philadelphia receives for losing Michel Petit; they would draft Petr Hubacek
• #244 – Pittsburgh receives for losing Craig Muni; they would draft Toby Peterson
• #245 – Anaheim receives for losing Brian Bellows; they would draft Andreas Andersson

1999 was the first year that there were some machinations involved, and it in some ways marked the beginning of the end of the compensatory draft pick system for Group III free agents.

• #40 – St. Louis receives for losing Brett Hull; they would trade this pick to Nashville as part of a deal related to the expansion draft, and Nashville would trade it to Florida, who would draft Alex Auld
• #41 – Edmonton receives for losing Curtis Joseph; they would draft Tony Salmelainen
• #42 – New Jersey receives for losing Doug Gilmour; they would draft Mike Commodore
• #52 – Nashville receives for losing Mike Richter; they would draft Adam Hall
• #57 – Pittsburgh receives for losing Ron Francis; they would draft Jeremy Van Hoof
• #65 – Nashville receives for losing Uwe Krupp; they would draft Jan Lasak
• #66 – St. Louis receives for losing Steve Duchesne; they would trade this pick to Dallas for Roman Turek, and Dallas would draft Dan Jancevski
• #70 – Florida receives for losing John Vanbiesbrouck; they would draft Niklas Hagman
• #75 – Vancouver receives for losing Jyrki Lumme; they would trade the pick to Tampa Bay as part of the Sedin/Brendl trade, and Tampa Bay would draft Brett Scheffelmaier
• #100 – New Jersey receives for losing Steve Thomas; they would draft Teemu Kesa
• #124 – Detroit receives for losing Bob Rouse; they would trade this pick to Nashville as part of an expansion side deal, and Nashville would draft Alexander Krevsun
• #150 – Montreal receives for losing Marc Bureau; they would draft Matt Shasby
• #153 – Calgary receives for losing James Patrick; they would draft Jesse Cook
• #157 – Pittsburgh receives for losing Fredrik Olausson; they would draft Vladimir Malenkikh
• #170 – Calgary receives for losing Ron Stern; they would draft Matt Underhill
• #209 – Ottawa receives for losing Randy Cunneyworth; they would draft Layne Ulmer
• #271 – Vancouver receives for losing Brian Noonan; they would draft Darrell Hay

In four years, there were 49 compensatory picks that were distributed among the teams that lost a free agent.

What began to change things was right above, in 1999.  Nashville received two picks, #52 and #65, for losing two free agents who never played a single game for the franchise.  They selected someone in the expansion draft who was a pending Group III free agent and who they would not be able to sign, but since Nashville held their rights when the contract expired, they would be entitled to the compensatory pick.

Somehow, despite the precedent set by Nashville, both 2000, 2001, and 2002 entry drafts would pass without compensatory picks being awarded in such a manner.  Columbus did receive one in 2001 for “losing” Mathieu Schneider, although in fairness, they did make several attempts to sign Schneider after taking him in the expansion draft.  Schneider simply had no interest in coming to an expansion team and thus went elsewhere.  To me, a bona fide attempt to sign a pending Group III free agent, even one who was just acquired, and gaining a compensatory pick for losing him is within the spirit of the compensatory framework.

However, there were trades that took place in June 2002 that spilled over into the 2003 draft, and undoubtedly hastened the demise of the compensatory system.

Unable to reach terms on a contract extension with goalie Curtis Joseph, Toronto traded him on June 30, 2002 to Calgary for a 2003 3rd-round pick and an unknown conditional pick.  Calgary made no effort to sign Joseph (who ended up in Detroit 48 hours later), and would receive pick #47 in the 2003 draft.  In addition:

• The #49 pick in 2003 belonged to Nashville for “losing” Ed Belfour; he had been acquired along with Cameron Mann for David Gosselin and a 2003 5th-rounder (#144).
• #66 belonged to San Jose, who had “lost” Theo Fleury after acquiring him in a flip of 6th-rounders.
• #73 belonged to Edmonton for “losing” Mike Richter; that had cost the Oilers a 4th-rounder.
• #133 belonged to Nashville again, who were enduring the pain of losing Predators legend Tie Domi; that cost them only an 8th-rounder.

The question that’s being raised as you skim through this is probably why a team would trade their own pending free agent for a lower pick than they could receive in compensation if they simply held onto him.  In each of these cases, the team was attempting to re-sign the player, which would preclude them getting a compensatory pick at all.  It’s also possible that, as a side effect of the contract stalemate, the team was hoping that the player would hit the open market, realize that more teams than ever were tightening their wallets, and they’d be able to bring him back for a lesser amount than the last offer before free agency.

If that’s the case, then these trades make perfect sense.  The prior team would keep their guy but garner an additional asset in the process, while the new team would get a higher compensatory pick than the draft pick that they were giving up in the first place.

The trades in 2003, which affected the 2004 draft, were the death knell for the compensatory system.

• #48 belonged to Edmonton, who had lost Brian Leetch.  Acquiring him cost Jussi Markkanen and a 4th-rounder.  Markkanen would be traded back to Edmonton in March 2004, and this very #48 pick was part of the pieces going back to the Rangers.
• #91 belonged to San Jose, who had lost Mark Messier.  San Jose gave up a 4th-rounder to get Messier.  This would prove to be the most lucrative compensatory transaction of all; the Rangers signed Messier right back, and would draft Ryan Callahan with the pick they acquired from San Jose.  The pick San Jose got would end up being traded again before ending up in Vancouver; they would draft Alex Edler.

Who says the San Jose Sharks won’t be stockpiling marquee talent this summer? Late Monday night, they acquired future Hall of Famer MarkMessier from the New York Rangers at the minimal cost of future considerations.

In fact, though, the 42-year-old Messier’s stint as a Shark will be similar in length to that of right wing Theo Fleury in 2002. Last summer, the Sharks acquired Fleury from the Rangers knowing he would leave as an unrestricted free agent and that they thus would receive a high draft choice as compensation. Fleury signed with Chicago, and the Sharks received a second-round selection in this year’s draft.

The same will happen with Messier, who became an unrestricted free agent Tuesday. If he decides to return for another season and re-signs with the Rangers, the Sharks will receive a compensatory pick in next year’s draft.

The Sharks are not interested in signing the six-time Stanley Cup winner.

The Rangers pulled off a similar deal Monday with Edmonton, sending unrestricted free-agent defenseman Brian Leetch to the Oilers for goalie Jussi Markkanen and a fourth-round selection next year.

Phillips, Roger. “Messier joins Sharks — for abbreviated stay.” Alameda Times-Star (CA) 2 Jul. 2003, Sports News & Columns

1. Going into the 2004 free agent season, teams were extremely wary of jumping into free agency considering that no one had any idea what form the new CBA would take.  Therefore, it made no sense to make even minor moves, including trading or acquiring pending UFAs for a few hours, on the eve of free agency without some type of clarity that wasn’t there at the moment.
2. The NHL specifically told teams to knock this crap off, and the next team that participated in a sham deal for the purpose of manipulating or exploiting the compensatory system was really going to wish that they hadn’t.

In the absence of any source material existing that confirms either one, all that I can do is speculate.

There were two such picks in the 1999 draft, which of course came from the 1998 free agent season (Krupp and Richter).  The 2000 draft had none, although Atlanta had picked Mark Tinordi and acquired Ulf Samuelsson in a side deal for the purpose of gaining compensatory picks.  The 2001 draft had 18 Group III compensatory picks overall, with two being from side deals (Schneider and Rick Tabaracci, both of whom were taken by Columbus in the expansion draft); Columbus made an effort to sign both.  The 2002 draft had 21 compensatory picks, none from side deals.

So in the drafts between 1996 and 2002, only four involved a just-acquired player being “lost” by a team, with them gaining a compensatory pick as a result.  That’s out of around 100 total compensatory picks.  (This total does not include compensatory picks awarded for a team failing to sign a 1st-round pick that they had drafted.)

Then in the 2003 draft, there were five compensatory picks awarded to teams who had just acquired a player, then two more in the 2004 draft.  And as said above, there were none in the 2005 draft.  There were around 150 compensatory Group III picks in the 10 drafts covered under the 1995 CBA, and just eleven were in any way tied to these types of move.  So why did they stop, and why was the system scrapped completely?

Truthfully, I don’t have the slightest idea.  All of this took place in contentious negotiations behind closed doors, none of which will ever see the light of day.  The free agent system was overhauled again in 2005, all but removing Group V free agency completely as Group III requirements shifted the eligible age below that of Group V. It’s possible that players didn’t like being reduced to a number, or that they didn’t like contract negotiations grinding to a halt for hours or days while their rights belonged to someone else. It’s possible that the league threatened (in negotiations) to shift compensatory picks to actually be transferred from an acquiring team to the prior team.  It’s also possible that most teams didn’t like the idea that a draft pick could essentially be bought; by covering the last payment on a player’s contract (due June 30) and then receiving a compensatory pick, it reduced a valuable pick to something that was being essentially bought for cash and a minor asset.  It’s also possible that the league itself simply didn’t like maintaining a system that was constructed around arbitrary numbers, one in which playing for a Stanley Cup-winning team as a seventh defenseman or fourteenth forward was as valuable as being a first-team All-Star.  It’s also possible that the league didn’t like that the spirit of the system was being so flagrantly flouted by a handful of teams.

If I had to venture a guess, it would be that there was some combination of all of these.  But then, it doesn’t explain why these deals ground to a halt during June 2004.  For this, I’d speculate that the latter half of the above paragraph was directed toward the teams around this time: the system exists for a reason, these trades are reducing it to buying draft picks in violation of the spirit of the system, and this crap ends now.  If you make a sham trade to gain a compensatory pick, you’ll wish that you hadn’t.

Regardless of the actual reason, the 2005 CBA wiped away any remaining vestiges of compensation for losing free agents.  It closed the door on one of the more interesting chapters in NHL history, one which made it possible for Mike Richter to call himself a Nashville Predator and an Edmonton Oiler without ever so much as being issued a jersey by either team.