What is Entry-Level Contract?

A three-year contract for newly drafted players, with a salary cap hit set by the league.

What this tells us

When a team signs a player who just came out of junior hockey or college, the contract structure and salary are locked in by NHL rules rather than negotiated freely. The cap hit stays the same for all three years, which means teams know exactly what they're paying a prospect before he plays a single NHL game. Most players end up re-signing for more money once the ELC expires.

Limitations

Entry-level contracts are front-loaded for the team — you're paying a young player at a discount relative to what he might command on the open market. The trade-off is that the player has limited negotiating power and can't test free agency until the contract ends. This doesn't tell you anything about how good the player actually is, only that he's subject to league-mandated pay rules.

Example

A typical first-round pick signs an ELC with a cap hit of around $900K to $1.4M per year, depending on draft position. After three years, if he's developed into a productive NHLer, he'll re-sign for significantly more money.