The NHL Has No Case Against Kovalchuk

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.

When you look at the above contracts, each one has added years at the end of the contract with the sole purpose of bringing down the salary cap number.  Although none are as extreme as the Kovalchuk deal, they are still blatant salary cap circumvention contracts.  What is similar with each of the aforementioned contracts is that each one is designed to have the player signed up to, or past the age of 40.  Luongo's and Hossa's contracts will have them signed until they are 42, and Keith's contract leaves him signed until he is 40.  Kovalchuk's contract will keep him signed until he is 44.  In terms of length, there is minimal difference here.  If you expect any or all of these players to continue playing well into their 40s, then I want to take a sip of whatever it is you're drinking.  Although playing until 41 isn't exactly unheard of (see: Chelios, Chris), each one of these deals is specifically designed to have the player retire prior to the expiration of the contract.  I'm not being biased, I'm being realistic.

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.