Remembering the UFA rule everyone thought was a good idea at the time

Brian Leetch and Tie Domi figured prominently in Toronto's connections to the UFA compensation loophole. Getty Images

Hockey history is a rich tapestry of traditions, trends and innovations. Many stuck around to become part of the game's enduring fabric. Others, not so much. "It made sense at the time" is an ongoing feature in which we'll look back at one of the odder things that used to be part of the NHL's culture and wonder how exactly it made sense at the time and that everyone was OK with it.

At last week's NHL Board of Governors meeting, the NHL surprised no one by doing away with its much-maligned compensation plan for hiring coaches and GMs. The system had been meant to standardize compensation for teams that hired away personnel who were still under contract to other teams, but was doomed by confusion about whether it should apply to those who'd already been fired.

In other words, it was a nice idea in theory that turned into an embarrassing mess once it saw the light of day. It will probably not shock you to learn that this is not the first time this has happened to the NHL.

In the years leading up to the 2004 lockout, the NHL featured an ever-increasing disparity between franchises in terms of revenue and spending power. This led many to yearn for a hard salary cap, while others proposed milder solutions like a luxury tax or increased revenue sharing, but virtually everyone agreed that it was a problem. And this was especially true when it came to free agency, as small-market teams found it difficult to hold on to star players who knew that a big-market payday was looming on the horizon.

The NHL's higher-ups, to their credit, took action. They couldn't solve the problem -- that was what the coming lockout would be for -- but they could do the next best thing and even the playing field.

And so, as part of what would be the last pre-salary cap collective bargaining agreement, the NHL created a rule: Teams that lost players to Group III unrestricted free agency would be eligible to receive a compensatory draft pick, which the league would create out of thin air. That's something the league had rarely done, the occasional crackpot theory aside, but in this case they made an exception. And in an added twist, the compensatory pick would be partly based on a team's payroll. Small markets would get high picks. Medium-sized markets would get lower ones. And the truly big-market teams such as the Toronto Maple Leafs and the New York teams wouldn't qualify for much, if they got anything at all.

It was a reasonably good rule, an example of the league being proactive when it came to addressing a problem. Hold back a few of the big spending markets, help out everyone else. At the very least, the rule had its heart in the right place.

I'll pause here so everyone can play a fun game of "spot the enormous loophole."

If you said, "The rule doesn't say anything about the free agent ever actually playing for the team that was losing him," you get a gold star.

Yes, the league neglected to add any language about what it meant to "lose" a free agent. That's probably understandable, because it sounds like it should be self-evident. If you're on a team's roster on June 30 and then leave as a free agent on July 1, that team lost your services and should be compensated, right? Simple.

But the vagueness left the door wide open for an easy exploit. A big-market team with an unsigned free agent could trade that player to a small market in the days or even hours leading up to July 1. The small-market team would send a draft pick to the big-market team, make no effort whatsoever to actually sign the player, and then get a better draft pick from the league when the player signed elsewhere.

It was a win-win for both teams involved. And it led to a handful of really weird trades involving some of the league's biggest stars in 2002 and 2003, deals that many fans have probably never heard of.

For example, did you know that Ed Belfour was once a member of the Nashville Predators? In the first major trade to target the loophole, the Dallas Stars sent Belfour to Nashville on June 29, 2002, as part of a package deal. Dallas got a fifth-round pick in 2003 in return. Belfour was on the Nashville roster for two days before signing with the Maple Leafs, at which point the Predators earned a compensatory 2003 second-rounder for losing him, even though he'd never pulled on their uniform.

It worked so well that the Predators did it again the next day, acquiring Tie Domi from the Leafs. That earned them a fourth-round pick when Domi left as a free agent to sign with ... the Maple Leafs. That's right, the loophole still worked even if the player went right back and re-signed with his old team.

The Leafs also sent Curtis Joseph to the Flames that same day, eventually earning Calgary a free second-round pick when he signed with the Detroit Red Wings. The Domi and Joseph deals brought the Leafs a pair of draft picks for essentially nothing, marking one of the few times the organization had been ahead of the curve on just about anything.

But with all due respect to the Maple Leafs, they can't lay claim to being the master of the free agency loophole trade. That honor belongs to the New York Rangers, who pulled off the move three times with three of their most iconic players. Anyone remember the Mike Richter era in Edmonton?

On the same day the Leafs were dealing Domi and Joseph, the Rangers celebrated free-agency eve by sending Richter to the Oilers for a fourth-round pick; they later re-signed him and he retired having never played for another NHL team. But he was technically an Oiler for a day.

Then they pulled the trick off twice more a year later, trading two future Hall of Famers on June 30, 2003. One of those deals saw Brian Leetch head to the Oilers. The other saw Mark Messier dealt to San Jose. Yes, Messier was technically a Shark for a few hours. Feel free to win a few beers at the sports bar with a "Name every NHL team Mark Messier was a member of" trivia question.

Both players re-signed with New York, and both deals landed the Rangers a fourth-round pick in the 2004 draft. And if you'd like some extra confusion, consider this: The Rangers used that fourth-round pick from the Leetch trade as part of a 2004 deadline deal with the Maple Leafs that saw Toronto acquire ... Leetch. The same draft pick was involved in two separate Leetch deals, both of which involved the Rangers trading him away. (It ended up being used on someone named Roman Kukumberg, in case you were wondering.)

As for the fourth-round pick from the Messier trade, the Rangers used that one to take a flyer on an OHL winger named Ryan Callahan. Seven years later, he'd be named the team's captain. Man, Messier's legendary leadership really was contagious.

That 2003 offseason marked the end of the free-agency loophole era. The 2004 offseason was largely uneventful as teams prepared for the coming lockout, and the new CBA negotiated a year later did away with free-agency compensation entirely. The loophole is largely forgotten today, remembered only every now and then when it causes a confused hockey-reference.com visitor to mutter, "Wait, I don't remember Tie Domi being on the Oilers."

So take heart, GMs. Your hiring compensation rule might have gone down in flames, but it's not the first time it happened. As some dejected fan wandering around San Jose, California, in a Messier Sharks jersey could tell you, those compensation picks can be tricky things.