FanShot

More legalese on the Kovalchuk Deal

This was linked to on puck daddy yesterday, but figured I post it here as well, in case you missed it. "So, the NHL put the kibosh on Kovalchuk’s unprecedented 17 year deal with the Devils, and it appears that the NHLPA is going to appeal and we’ll be going to arbitration. Let’s look at the relevant clause first and break it down: 11.6 Rejection of SPCs and/or Offer Sheets; Subsequent Challenge and/or De-Registration of SPCs and/or Offer Sheets.(a) Rejection of SPCs and/or Offer Sheets. In the case of an SPC or anOffer Sheet, as the case may be, that is filed and rejected by the League, the followingrules and procedures shall apply:(i) If an SPC or an Offer Sheet is rejected: (A) because it results inthe signing Club exceeding the Upper Limit, or (B) because it doesnot comply with the Maximum Player Salary or (C) because it is orinvolves a Circumvention of either the Club’s Upper Limit or theMaximum Player Salary, and:11.6 Rejection of SPCs and/or Offer Sheets; Subsequent Challenge and/or De-Registration of SPCs and/or Offer Sheets. (a) Rejection of SPCs and/or Offer Sheets. In the case of an SPC or an Offer Sheet, as the case may be, that is filed and rejected by the League, the following rules and procedures shall apply: (i)If an SPC or an Offer Sheet is rejected: (A) because it results in the signing Club exceeding the Upper Limit, or (B) because it does not comply with the Maximum Player Salary or (C) because it is or involves a Circumvention of either the Club’s Upper Limit or the Maximum Player Salary, and: (x) if the NHLPA does not timely dispute and refer to the Arbitrator such rejection in the manner set forth in Section 11.5(g) above, then immediately upon the expiration of the time period within which the NHLPA may dispute and refer to the Arbitrator such rejection, the SPC or Offer Sheet, as the case may be, will be deemed null and void ab initio (i.e., the Player’s Free Agency and/or contractual status shall revert to the status he held prior to signing his SPC or Offer Sheet, as the case may be), and the Player shall not be entitled to any of the rights or benefits provided for under the rejected SPC or Offer Sheet, as thecase may be; or (y) if the NHLPA does timely dispute and refer to the Arbitrator such rejection in the manner set forth in Section 11.5(g) above, then such dispute over that rejection shall be both heard and decided by the Arbitrator within forty eight (48) hours of such referral, during which period the Player shall not be entitled to play under such SPC or Offer Sheet, as the case may be,and shall not be entitled to any of the rights and benefits provided for under such SPC or Offer Sheet, as the case may be, pending a resolution of such grievance by the Arbitrator. Got it? Good! Let’s try to break this bad boy down in plain english. The key clause in here will be " [b]ecause it is or involves a Circumvention of either the Club’s Upper Limit or the Maximum Player Salary." The NHL does have a prima facie case here based on the strict wording of the CBA. This contract obviously seems like an attempt to circumvent the salary cap. Does anyone really expect Kovalchuk to be playing when he is 44 years old? Unless he’s Gordie Howe, and we can state with reasonable expectancy that the Devs expect him to be playing into his 40s, this contract fails that test. However, the Devils and the NHLPA can respond back that they are ensuring their future rights in the event he remains a viable player that long into his career. Their supporting information would include projections of Kovalchuk’s stats for the length of the contract, the expected market values of such players, and a variety of other extrapolated evidence. The arbitrator can go either way with this. I think the kicker, and the issue that will ultimately push the NHLPA to victory, falls back on other mega-term contracts the league has allowed. Without going to law schooly, there is a principle in contract law that if a right is repeatedly waived, it is assumed to have been permanently waived. For example, if I keep paying you $100 dollars on the 20th, when we have a debt due on the 10th of each month, and you don’t reject the payment or warn me to stop paying you late, you can’t sue me 2 years from now for late payment. This is codified in the UCC, which is for sale of goods, but under common law the same principles apply. The terms of other mega-term deals tilt in the Devils favor. Specifically, the Ovechkin and DiPietro deals give the NHLPA a position of strength, and just because the NHL didn’t think of this when they ratified the 2005 CBA, that’s not the Player’s Association’s fault. If the NHL wanted to object to it, they have had their time, and I don’t believe they will be allowed to now. Call it 3-1 for the NHLPA."

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