The NHL Has No Case Against Kovalchuk
by Dave Shapiro on Jul 21, 2010 10:31 AM EDT
in NHL News
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In case you missed it, and if you did, you've been living under a rock for the past 24 hours, the NHL rejected Ilya Kovalchuk's deal with the New Jersey Devils. The 17-year, $102 million deal would have paid Kovalchuk $98.5 million in the first 11 years of the deal, with Kovalchuk earning the league minimum ($550k) for the remaining years, save for one year where he would make $750k. The Devils, in a rare PR slip up, held a press conference to announce the signing before the NHL had approved the deal. Less than 12 hours later, the deal was rejected.
The deal, although clear circumvention of the salary cap, is legal within the verbiage of the CBA. The NHL has decided to make its stand against these long term, front loaded, contracts with Kovalchuk, but in reality, the problem started in 2007 when Mikka Kipprusoff signed his new deal with Calgary. The deal included an extra year at the end of the contract for $1.5 million. Not exactly alarming, but it made the loophole in the CBA very evident to the other 29 NHL GMs.
Contracts like Vinny Lecavalier (11 years, $85 million with one year at $1.5 million and one year at $1 million), Henrik Zetterberg (12 years, $73 million with two years at $1 million), Marian Hossa (12 years, $63.3 million with four years at $1 million), Duncan Keith (13 years, $72 million with three years at < $3 million, including one year at $1.5 million), Roberto Luongo (12 years, $64 million with one year at $1.6 million and two years at $1 million) made the loophole the topic of conversation amongst NHL GMs, and the NHL front office looking to put an end to the contracts. The NHL has had a little success, as they declared the Chris Pronger contract to be a 35+ contract, despite the fact that he signed the deal before he was 35 years old, something that the CBA verbiage is rather ambiguous about. The Chris Pronger contract is a separate issue altogether though.
The main argument with the Kovalchuk contract is that his deal has 7 years at or near the league minimum salary of $550k. These years make the Kovalchuk contract blatant circumvention, but only in the sense that the structure of the contract was ridiculous and an attempt to further exploit the loophole in the CBA. The NHL has no case because all Lou Lamoriello and the Devils have to do is take some of those $11.5 million seasons, and redistribute the cash to the back end of the contract to bring the salary to around $1 million, and then resubmit the contract for approval. By doing so, the Devils do not have 7 years of league minimum, but 7 years at twice the league minimum, which is how the other contracts are structured. When this is done, and it will be very soon, the NHL will have no case against the Devils, because of the previously approved contracts that pay 40 year old players $1 million, as described above. Sure, Kovalchuk would lose around $500k per season for a few years, but would be gaining some of it back at the end of the deal when he would be making league minimum. It's not a win-win, but it's as close you can get to one while leveraging what the NHL has already approved.
It is good to see the NHL grew a pair and is attempting to put its foot down with these contracts. However, the simple solution is to redistribute the money. It's hard to see Kovalchuk rejecting that type of deal, as it is unlikely for him to receive that lucrative of a contract, with that job security, anywhere else. So while most will consider this a win for the NHL, it is simply delaying the inevitable. Kovalchuk will be a Devil, for the same term, same salary, and same AAV, the only difference will be the distribution of the salary. This, mind you, is coming from a Ranger fan, who doesn't want to see Kovalchuk and Parise on the same team for the next 17 years.
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There’s a difference between saying “The NHL has no case…” and what you’re actually saying – “The Devils will restructure so that the NHL doesn’t have to make a case”. While your anaylsis is interesting, I’m hoping this all blows up into a full-fledged fight between the NHL/Devils/NHLPA. THAT would be fun to watch, and it would force the NHL to make an actual case distinguishing this contract from the others.
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Yet another reason...
why I dislike the Devils. Yes this is smart on their part, making a contract like this and holding Kovi for that long. What I dislike is all this loophole crap. Yea it’s smart to use it, but I hate it for the fact that he isn’t going to play for anywhere near the term of the contract.
My main dislike is the exact same as your last sentence: This team just got a whole lot tougher for the next decade and a half. And balls for that.
Its seems to me as if lou didnt really want this deal done and the blatantness with which he circumvented the cba was his way of overruling his owner. Its a conspiracy theory i know, but i have seen it in several places today. Lou is an excellent gm, and a signing like this is out of character for him to say the least (in terms of the type of player and magnitude of contract). It is fairly obvious from what he has said that it was the owner of the devils who pushed this deal through, and not lou himself. The only way for lou to stay the deal would be by forcing the nhl to void the contract because of its ridiculous nature. This is highlighted by fact that one of lou’s associates is the former director of player contracts for the nhl, meaning he would have a fairly good idea of what would, and would not, be approved by the league.
Just trying to keep things interesting :)
While I dont believe thats the case, it would be awesome. Nothing makes for more fun viewing than an owner and his management team at odds, and it would be trouble for the Devils.
BTW, if Vanderbeek really is the force behind this contract, and he’s pushing it because he believe it will turn the Devils financial issue around (mostly clearly through high attendance), he’ll be proven sadly mistaken in short order. Kovalchuk wont sell 2000 tickets per game. The Devils just don’t have the fanbase to support a sold-out arena, in my view, no matter who plays there.
Glen Sather is a Hockey Genius.
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http://twitter.com/ThGeneralissimo
The data from last season contradicts your statement. The Devils sold out pretty much every home game (something like 9 or 10 our 12) after the Kovalchuk trade.
9 or 10 games
doesn’t really constitute much of a sample. I may be wrong, but I dont believe he will have the long-term drawing power that people might otherwise assign to someone like Ovechkin or Crosby. Im not even sure they have that power in a saturated North Jersey hockey market.
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Remember any press is good press
The name Kovalchuk is being bombarded so much this summer by all forms of media, that by the October comes around his name will have more recognition to the non hockey masses than Crosby or Ovechkin.
(ok ok, slight exaggeration but you get the idea)
He will definitely draw people in.
bread. butter. cheese. VICTORY!
by Prometheus74 on Jul 22, 2010 1:02 AM EDT up reply actions
I still think that they do have a case
there is no way that Kovalchuk plays the final 7 years of this deal out at league minimum. At that point he can just retire and go to the KHL for a few years.
At this point, I agree with the NHL. But I do think they should have looked deeper into Hossa’s contract
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by Joe Fortunato on Jul 21, 2010 11:12 AM EDT reply actions 1 recs
BS contract or not, the leage cannot prove that Kovy WILL NOT be playing those years. Chelios played past that age, so in Kovy’s defense why can’t he. Player does not have to prove he will be playing, the league has to prove he won’t.
Contract was trying to circumvent the idea of the cap, but, if you onvalidate this one, to be fair you would have to invalidate all those beofre that tried to do the same thing.
If the players union actually had a leader, this would absolutely be contested on the players behalf, and most likely won.
This type of contract will have to be addressed in the next CBA, and I am sure it will.
disagree… There’s a big enough difference between this contract and the others that allows the league to say “we’re drawing the line, this is ridiculous”. And I agree with them – I just wish they drew the line at Hossa.
Doesn’t the CBA allow the league to reject contracts that violate the spirit of the CBA? Pretty sure it does, and I don’t believe the NHLPA would win an appeal so easily. The NHL has more of a case than most people think, in my opinion.
Anytime you use the term “spirit of the CBA” the case can be argued (not by you, by the league). Unless the rules are in stone, that vagueness can be used against you.
I htink all of those types of deals are ridiculoud, but how has it worked out for the Islanders? It doesn’t always end up favoring the team lowering the cap number.
Jesus Christ
Why am I seeing rumors the Rangers are trying to deal Gabby &/or Drury to LA and sign Kovi???
Gabby is better then Kovi and Drury has a NMC!!!
Sorry… had to vent.
Sometimes you just need to read the ridiculous and just laugh. About 90% of what you read on the internet has zero merit whatsoever.
by Dave Shapiro on Jul 21, 2010 11:52 AM EDT up reply actions 1 recs
Yeah... I know
Had to get it out just to talk myself from the ledge…
I read it in more then one place though.
If it was just EK, I wouldn’t have even bothered.
by Mike_from_NNJ on Jul 21, 2010 11:58 AM EDT up reply actions
that was also a rumor stirred up by...
none other than eklund. so you might have to give that a negative chance of happening. although i wouldnt mind dealing dru to free up space if he waived his ntc
by BronxBeliever on Jul 21, 2010 11:59 AM EDT up reply actions
What’s funny is that after the Devils were officially tweeting the Kovy signing, Eklund was tweeting “LA MAY be out of the running for Kovy”
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by Jim Schmiedeberg on Jul 21, 2010 12:06 PM EDT up reply actions
The day before it was announced he said “my source says it’s 80/20 he’ll be a king” then when the devils announced it he said “my source was sure he’d be a devil since April due to an interview”
I was laughing pretty hard
by teknics on Jul 21, 2010 12:24 PM EDT via mobile up reply actions
we’re in the 10% :)
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by Jim Schmiedeberg on Jul 21, 2010 12:05 PM EDT up reply actions
I think that’s 64.4689%
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by red army line on Jul 21, 2010 7:36 PM EDT up reply actions
Just to throw more water on Eklund's flames
Drury has a FULL NO MOVEMENT CLAUSE!
Eklund, go learn hockey, then once you have done that, go under a rock for 50 years, then come back
Blueshirt Banter: Covering the New York Rangers the only NHL team with three home arenas.
"We can trade Lisin for a gun, then hold it to Drury’s head and make him waive the no-movement clause" - XLII
by Joe Fortunato on Jul 21, 2010 12:10 PM EDT up reply actions 1 recs
NMC
only means you need the players permission. Perhaps Drury would rather live in LA and thinks he has a better chance to win a title there?
Not that I would choose to defend EK
Exactly
and Drury won’t waive it. Also the organization is very high on him, so they wouldn’t even deal it if they could
Blueshirt Banter: Covering the New York Rangers the only NHL team with three home arenas.
"We can trade Lisin for a gun, then hold it to Drury’s head and make him waive the no-movement clause" - XLII
by Joe Fortunato on Jul 21, 2010 4:12 PM EDT up reply actions
so much for the notion that lou's the genius who worked out this contract
It was clear that ownership—headed by Jeff Vanderbeek—was behind this particular contract. Not that Lamoriello didn’t endorse bringing Kovalchuk back.
Still, Lamoriello said he "absolutely" rolled his eyes when the Islanders signed Rick DiPietro to a 15-year contract in 2006 and when Washington signed Alex Ovechkin to a 13-year contract in 2008. He also said he "absolutely" rolled his eyes when Kovalchuk’s contract was completed.
So why would he sign Kovalchuk to such a deal?.
"You’d have to speak to ownership about that," Lamoriello said. "The commitment that ownership has made here, this is a commitment and a decision they wanted to make for this type of a player and all I can do is say whether the player is a player that will fit into the team, can help the team and is not a risk as a player. As far as what the financial commitment is and that aspect of it, that was out of my hands."
This from a man who thinks the plural of goose is sheep.
Send Lawyers, Guns and Money....
If this passes muster, can we count social security benefits that are earned during a contract and paid when the player turns 65 (or 70)? What about a personal service contract that begins on teh date of retirement? How about hiring the wife as a consultant? What about payments for advertising Radio City Music Hall or the local cable station that televises the team’s games.
The Cap is silly. It needs to go away. Once we start looking for loopholes, it’s easy to find them. Once the dike starts leaking, there aren’t enough thumbs.
by It may HAVE to Last a Lifetime on Jul 21, 2010 12:24 PM EDT reply actions
Um What?
MATTEAU!!!!! MATTEAU!!!!!!! MATTEAU!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!
by stonecoldcory on Jul 21, 2010 12:37 PM EDT up reply actions
Cap is not silly
since the last CBA was the first time Hockey had a cap, there were bound to be errors or ways to trick the system. Next time they will fill the loopholes and make it harder to game the system.
Without the cap system, there would only be about 10 teams that could afford to pay top talent. That means MORE people would leave for Europe, Russia, whatever. Those top 10 teams fund the other teams through revenue sharing. fewer teams means less revenue through TV contracts, which means even less to go around.
No system is perfect.
Take it from a tax lawyer, there is no way not to write any Cap that won’t have loopholes.
by It may HAVE to Last a Lifetime on Jul 21, 2010 3:55 PM EDT up reply actions
The Devils arent going to appeal against this
so he is a UFA again
twitter.com/NYRangerFan718
by NYRangerFan718 on Jul 21, 2010 12:32 PM EDT reply actions
Source?
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by George E. Ays on Jul 21, 2010 12:33 PM EDT up reply actions
ESPN.com
I Am HockeyMan!!
"When I tap my stick like this (thump, thump, thump), put the puck on the tape, and I'll take care of things." Jaromir Jagr, for Bud Light.
can you link the actual story
Danz?
Blueshirt Banter: Covering the New York Rangers the only NHL team with three home arenas.
"We can trade Lisin for a gun, then hold it to Drury’s head and make him waive the no-movement clause" - XLII
by Joe Fortunato on Jul 21, 2010 12:49 PM EDT up reply actions
http://insider.espn.go.com/nhl/features/rumors#3790
I Am HockeyMan!!
"When I tap my stick like this (thump, thump, thump), put the puck on the tape, and I'll take care of things." Jaromir Jagr, for Bud Light.
damn you espn insider!!!!!
can you give those of us who arent special enough to get in a little more detial Danz?
by BronxBeliever on Jul 21, 2010 1:09 PM EDT up reply actions
mind quoting from the link?
I’m not an insider
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"We can trade Lisin for a gun, then hold it to Drury’s head and make him waive the no-movement clause" - XLII
by Joe Fortunato on Jul 21, 2010 1:10 PM EDT up reply actions
UPDATE II: The Devils just avoided a whole lot of trouble. They won’t appeal the NHL’s rejection of the Ilya Kovalchuk deal, a source tells Sportsnet. So that could mean one of two things: 1) The Devils will re-structure the deal and see if the NHL OKs it. 2) The Devils could let Kovalchuk become an unrestricted free agent again.
If they re-structure, here’s the problem: Kovy wants his $10 million a year for about 10 season, but the Devils will not take on that kind’ve cap hit, especially if they want to keep Zach Parise and a competitive supporting cast. So it’s unclear how the Devils plan on re-structuring this, but perhaps Kovy will now be forced to take less money. It’s also possible the term will be shorter — 13 years? — and Kovy will bolt to the KHL for the final three seasons to make his cash.
UPDATE: The Devils may just avoid this confrontation all-together and re-structure the deal — at least that’s what many people think, Yahoo Sports’ Greg Wyshynski tweets.
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by George E. Ays on Jul 21, 2010 1:13 PM EDT up reply actions
So the appeal part is correct, he’s not a UFA though, which is the part I was questioning anyway.
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by George E. Ays on Jul 21, 2010 1:14 PM EDT up reply actions
well he might be
I don’t think the Devils are gonna re-structure. he still wants his 100 million
Blueshirt Banter: Covering the New York Rangers the only NHL team with three home arenas.
"We can trade Lisin for a gun, then hold it to Drury’s head and make him waive the no-movement clause" - XLII
by Joe Fortunato on Jul 21, 2010 1:17 PM EDT up reply actions
He may be eventually, but he’s not yet. I’m in a splitting hair kind of mood. It depends on how important the cap hit is to the Devils, 15/102 is still only $6.88m per year.
I was really hoping we were done with Kovy nonsense, to be honest.
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by George E. Ays on Jul 21, 2010 1:21 PM EDT up reply actions
ESPN is SO FULL OF IT
First and foremost, there is no language in Article 11.5(g) or 11.6, the sections of the CBA which govern this activity, allowing a CLUB to appeal.
The only appeal mechanism is the NHLPA.
Because it’s the summer (rule in effect from July 1 to seven days prior to the start of the regular season), the NHLPA has 5 days to appeal. If they appeal, an arbitrator must hear the case and render a decision within 48 hours.
So, until 5 days elapse with no appeal, or seven days elapse with an appeal – he remains “linked” to the Devils. He does not revert to his “prior status” of Unrestricted Free Agent until the 5/7 elapse.
ESPN just requotes other sources in their “rumors,” in this case Sportsnet.
Plus, it gives you something to rant about, which is always entertaining.
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by George E. Ays on Jul 21, 2010 3:33 PM EDT up reply actions
sorry I wasnt sure
someone told me that if they didnt appeal that he would be a UFA which makes sense but I guess not
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by NYRangerFan718 on Jul 21, 2010 1:20 PM EDT up reply actions
sorry I got off for awhile
yeah it was all over twitter from some reliable people so I figured it was true and apparently it was
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by NYRangerFan718 on Jul 21, 2010 1:13 PM EDT up reply actions
even if the devils don't appeal
the nhlpa will probably file a grievance, no?
This from a man who thinks the plural of goose is sheep.
uhh depends
the main issue for the NHLPS is that even Lou himself said that deals like this shouldn’t be allowed
Blueshirt Banter: Covering the New York Rangers the only NHL team with three home arenas.
"We can trade Lisin for a gun, then hold it to Drury’s head and make him waive the no-movement clause" - XLII
by Joe Fortunato on Jul 21, 2010 12:49 PM EDT up reply actions
Lou does not represent the players
so it doesn’t matter what his opinion is in the player’s eyes.
No
but he does represent the other side, and why would the NHLPA oppose it, if a guy sitting on the other end of the table agrees that the contract is bad for the NHL
Blueshirt Banter: Covering the New York Rangers the only NHL team with three home arenas.
"We can trade Lisin for a gun, then hold it to Drury’s head and make him waive the no-movement clause" - XLII
by Joe Fortunato on Jul 21, 2010 4:13 PM EDT up reply actions
Lou represents the Owners, NHLPA represent the players. Those are opposite sides. Players don’t care if the contract is bad, etc. they are concerned with getting their players as much money as possible, especially under a capped system. Lou, representing ownership, want the opposite. It is in Lou’s interest to eliminate this type of contrat from ever being sugned by anybody.
Lou is crafty. I would not be surprised if he intentionally did this to put the kabosh on any future deals like this. that would make other teams less able to put more competetive teams against his own, since he has shown the ability to put a very capable squad on the ice year in and year out without the hight priced mega star.
gotta figure lou didn't want any part of this deal or bringing him back
based on his comments on these kinds of deals and this nugget, if it’s true:
Further muddying the waters surrounding the rejection, a source told ESPN.com Wednesday morning that Devils president and general manager Lou Lamoriello was aware of the league’s plans to deny the deal prior to Tuesday afternoon’s news conference in Newark announcing the signing.
The news conference, attended by Lamoriello, Kovalchuk, coach John MacLean and a number of Devils players, went ahead without any suggestion the deal was in jeopardy.
This from a man who thinks the plural of goose is sheep.
It’s funny how some believe it’s going to be so easy to restructure and re-file… remember over the first 10 years of the contract his cap hit would be about 9.85 mil. per… His normal contract without the extra 7 would be a 10 yr 98.5 mil. contract, simple redistributing the money raises some issues, considering at the 10 year mark there would have only been appx 3.5 mil. left on the contract it would be no big deal to walk away from a contract when theres almost nothing left on it, however with the redistribution you are now pushing that number, if the contract dictates a 1 mil per year, to beyond 10 million in lost money near the end of the deal. There is no way Kovalchuk just misses out on that final 10 mil or so just by retiring, so this makes a complicated situation.
It will not be an easy process, and quite frankly comparing his contract to the contracts of others where they have 2 years and 1.5-1 mil left on them is a terrible comparison. 2 is a loop hole, 7 years with certainty of retirement is cheating the system…
Im not sure how hard it would be – as long as Kovalchuk isnt completely off the charts greedy/crazy. You could very quickly get a structure that get him $100 M or so in 15 years, flattens the curve slightly, and still only slightly raises the Devils cap hit. 15 years gets him to an age that is similar to other long-term approved contracts, and flattening the curve supports the argument that there’s no incentive for him to keep playing and just retire. Not sure how the league could further argue that.
YEAR 1 $6,000,000
YEAR 2 $6,000,000
YEAR 3 $10,500,000
YEAR 4 $11,500,000
YEAR 5 $11,500,000
YEAR 6 $10,500,000
YEAR 7 $10,500,000
YEAR 8 $9,500,000
YEAR 9 $9,500,000
YEAR 10 $6,000,000
YEAR 11 $3,000,000
YEAR 12 $2,500,000
YEAR 13 $1,500,000
YEAR 14 $1,000,000
YEAR 15 $1,000,000
Total Salary: 100.5 M. AAV: 6.7M
Current Agreement: Gets $95 in first 10 years (93%).
Revised Agreement: Gets $91.5 in first 10 years (91%).
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Kovalchuk is that greedy, plus he will be 38 by the time he in the 10th year, likely hood he’ll still be in the league is very very low… essentially by what you’ve given he’s be out 9 million… if he plays the full 10 years and thats all…
lol nhlsourcessay just tweeted that
the kings have offered williams, teubert and a farm player for gabroik
lol is that a joke or are they as bad as eklund with this shit
twitter.com/NYRangerFan718
He’s just as bad. Why the hell would we take another D prospect?
Unless “farm player” = Brayden Schenn, that deal is a POS lit on fire.
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by George E. Ays on Jul 21, 2010 1:22 PM EDT up reply actions
Yeah no way that was even offered
Gabby wouldbe worth 2 or 3 top end prospects
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"We can trade Lisin for a gun, then hold it to Drury’s head and make him waive the no-movement clause" - XLII
by Joe Fortunato on Jul 21, 2010 1:26 PM EDT up reply actions
yeah
if we can get some picks and prospects and then sign kovy after then I would think about it but that deal would be dumb
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by NYRangerFan718 on Jul 21, 2010 1:28 PM EDT up reply actions
I dont think the Kings would want Drury
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by NYRangerFan718 on Jul 21, 2010 1:23 PM EDT up reply actions
i dont think anybody wants drury
i was just sayin
by BronxBeliever on Jul 21, 2010 1:24 PM EDT up reply actions
yeah I would Definately take the deal for Drury but not Gaborik
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by NYRangerFan718 on Jul 21, 2010 1:25 PM EDT up reply actions
if sather is acually discussing a deal for gabby with the kings the conversation has to start with schenn, im not taking anything less in terms of prospects
by BronxBeliever on Jul 21, 2010 1:27 PM EDT up reply actions
Goes back to mleetch’s FanPost a little while ago.
Start with Schenn and Simmonds, then figure out the rest.
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by George E. Ays on Jul 21, 2010 1:30 PM EDT up reply actions
I would take
schenn, simmonds, another prospect and a 1st rounder and maybe 1 more pick
pair gabby with kopitar and that would be an awesome line
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by NYRangerFan718 on Jul 21, 2010 1:32 PM EDT up reply actions
I like Gaborik, no way he commands a 22 yr old PF, a prospect with #1C potential, plus another prospect and two draft picks, one of which is a 1st.
I don’t know how many guys are even worth that package.
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by George E. Ays on Jul 21, 2010 1:38 PM EDT up reply actions
i agree smurf but simmonds schenn and a 1st might be realistic and something i might consider
by BronxBeliever on Jul 21, 2010 1:39 PM EDT up reply actions
I also expect something to be going the other way also
like most deals this big usually more then 1 player is involved
Gaborik, Sauer, Byers, 5th round pick
for
Schenn, Simmonds, Prospect, 1st round pick, 3rd round pick
twitter.com/NYRangerFan718
by NYRangerFan718 on Jul 21, 2010 1:40 PM EDT up reply actions
im guessing you get either the other prospect or the pick unless we are giving back say 1 of our 2nd’s next year.
by Michael Gleich on Jul 21, 2010 10:24 PM EDT up reply actions
schenn, simmonds, toffoli, 1st for gabby, 2nd?
by Michael Gleich on Jul 21, 2010 10:27 PM EDT up reply actions
I bet Brian Burke does.
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by George E. Ays on Jul 21, 2010 1:29 PM EDT up reply actions
if he came calling for dru
i would be all ears lol
by BronxBeliever on Jul 21, 2010 1:33 PM EDT up reply actions
Good stuff, Dave. Methinks the Devils were just testing the waters a bit. Give an inch the owners would take a mile.
Something for the NHLPA to keep in mind when working on the next CBA.
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- Sean Avery: Not in NHL playoffs, getting a handle on semi-nude modeling (PHOTO)
Latest stories and headlines from NHL.com
- Brodeur, Parise lead Devils to 4-1 win over rattled Rangers; East final tied 2-2
- Brodeur, Parise lead Devils to 4-1 win over rattled Rangers; East final tied 2-2
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- Labrie stars in Admirals 1-0 overtime win over IceCaps; Norfolk leads series 3-0
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