On July 21, 2021, the Seattle Kraken, the newest franchise in the National Hockey League (NHL), stocked its roster through what is known as an expansion draft.  The consensus seems to be that the Kraken used the draft to select a solid, if not star, roster whilst leaving flexibility to sign higher profile free agents before the start of the season.  All eyes will now be on the Kraken’s debut against the Golden Knights in Las Vegas on October 12th.

In this article, we examine the background and rules to the expansion draft, as well as well as the rationale for these rules and their potential impact on the fortunes of new franchises.

Background to the NHL Expansion Draft

As values of professional sports franchises continue to increase in North America, so do the franchise fees for new entrants.  For example, Seattle’s franchise fee was $650 million compared to $500 million for the Vegas Golden Knights who entered the league in 2017.  This franchise fee is split equally between all the existing teams.  (However, on this occasion, the Vegas Golden Knights did not receive a cut of Seattle’s franchise fee because the team’s owner, upon its award of a franchise, negotiated to be exempt from giving up a player in the expansion draft in exchange for giving up its share of the franchise fee.)

Particularly in recent years, the NHL has seemingly been keen to help new teams become competitive on a shorter timeline, which, consequently, allows the league to build fanbases more easily in its new markets.  To this end, the NHL has employed the same favourable rules to this latest expansion draft as were employed for the Vegas Golden Knights in 2017 that lead to the franchise’s surprise advancement to the Stanley Cup finals in its inaugural season.

Rules of the NHL Expansion Draft

Prior to 2017, the NHL allowed existing teams to “protect” essentially all their most valuable players from being drafted by the incoming franchise.  Starting in 2017, however, with the NHL’s expansion to Las Vegas, the league decided to allow existing teams to protect only 11 players rather than 15 (which had applied in previous expansions such as when Columbus and Minnesota entered the league in 2000).

Some of the key rules governing the mechanics of the draft include the following:

• Teams can only protect 7 forwards, 3 defensemen, and one goalie, provided that amongst the unprotected players there must be at least two forwards and one defenseman who each played at least 40 games during the last season or 70 games over the last two seasons;

• Of those players left unprotected, teams may lose only one player;

• Teams also may not expose players with potential career-ending injuries (i.e., ones who missed more than 60 straight games) or confirmed career-ending injuries unless signed off by the NHL;

• If a player has a no-movement clause (i.e., a clause by which players must approve any trades and other transactions), he must be protected unless he agrees to waive the clause for the purposes of being exposed in the draft; and

• Notwithstanding the foregoing, all first and second-year NHL players (together with unsigned draft picks) are exempt from the draft, and do not count toward a team’s total of protected players. This aims to protect teams looking to build for the future with younger players as opposed to ones stocked with higher-priced veterans.

How have the amended draft rules played out?

The more favourable nature of the latest edition of NHL expansion draft rules would seem to be borne out by the success of the Vegas Golden Knights in their inaugural season in the NHL.  In 2018 they reached the Stanley Cup finals – an unprecedented accomplishment for an expansion team in any of the major professional sports leagues in North America.  Before the Golden Knights’ successful debut season, of the 64 expansion teams among the four major U.S. sports leagues since 1960, no team had even posted a winning record in its first season.  According to at least one analysis, the Kraken are currently projected to be an 86-point team in their inaugural season, which would put them in contention for a Playoff spot.

How does the NHL Expansion Draft compare to those in other major US sports leagues?

The most recent NFL expansion draft in 2002 for the Houston Texans allowed existing franchises the right to choose who they would expose to the draft, and they only needed to expose 5 players out of 53.  In 2004, as part of its most recent expansion draft, the NBA allowed teams to protect 8 players out of their 12-man rosters for the Charlotte Bobcats’ entry into the league.  While there were certain limitations on the type of players that could be exposed in these leagues’ drafts, those expansion draft rules were generally more protective of existing teams than the current NHL expansion draft. This seems to have been reflected in the performance of those franchises – it took until 2011 and 2010 for the Texans and Bobcats respectively to make the playoffs for the first time.

As for the Kraken and how they’ll fare? Time will tell…