NHL Rescinds Portion of Salary-Cap Circumvention Penalties Against Devils

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NHL Rescinds Portion of Salary-Cap Circumvention Penalties Against Devils
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The New Jersey Devils looked as though they would have to sit out the first round of this year's NHL draft, but they have been given a new lease on life by the league.   

After it was determined that the Devils circumvented salary-cap rules when they signed forward Ilya Kovalchuk in 2010, they were penalized significantly by the NHL. That penalty included forfeiture of their 2014 first-round pick, but New Jersey has recouped some of its losses, according to the league's official press release.

According to TSN's Darren Dreger, the Devils won't pick based on where they finish in the standings, but they have been awarded the final selection in the first round of the 2014 draft:

With the Devils now picking 30th, all teams that would have picked at No. 30 and beyond will be forced to drop down one spot. Also, according to Tom Gulitti of The Record, it is being treated as a compensatory pick in that it cannot be traded:

The Devils were also initially supposed to pay a $3 million fine, but that was cut in half:

According to the Associated Press, via ESPN.com, the Devils signed Kovalchuk to a 17-year, $102 million contract in 2010. An arbitrator ruled that the Devils made the deal in an effort to circumvent the salary cap by paying Kovalchuk just $550,000 per season over the final six years of the deal.

When the original punishment was handed down, Devils president and chief executive Lou Lamoriello didn't believe that it was a fair decision, per the AP:

We were today advised of the ruling by the commissioner with respect to the Kovalchuk matter. We disagree with the decision. We acted in good faith and did nothing wrong. We will have no further comment.

Lamoriello had more on the decision via Rich Chere of The Star-Ledger:

After fulfilling just three years of the contract, Kovalchuk left the Devils following the 2012-13 season in order to play for the KHL's St. Petersburg SKA.

According to the NHL's press release, the Devils requested that the penalty be reviewed. Although the league didn't identify Kovalchuk leaving the NHL as the reason behind it, that certainly had to be factor:

The Devils recently applied to the League for reconsideration and relief from a portion of the original penalty, citing primarily changes in circumstances which, in the Club's view, changed the appropriateness of the sanctions initially imposed. After due and thorough consideration, the League has decided that a modification of the original circumvention penalty associated with the Kovalchuk contract is warranted.

Many don't view that as a logical explanation, including Jason Gregor of TSN 1260:

There are plenty of questions regarding the fairness of the NHL reducing the punishment, but the league doesn't intend to address them, Ian Mendes of TSN 1200 points out:

Dreger is reporting that a number of NHL teams disagree with the decision, and that there is some belief that the league modified the penalty as a favor to new owner Josh Harris:

While Devils fans probably feel as though awarding the team the 30th pick in the 2014 NHL draft is the least that the league can do after Kovalchuk bolted to Russia, it's entirely understandable why other organizations aren't particularly happy.

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The reduced punishment makes commissioner Gary Bettman and the league powers look somewhat hypocritical, and that essentially invites teams to take advantage of the salary cap moving forward.

Rules have been put in place since the Kovalchuk contract fiasco to ensure that deals can't be back-loaded to that degree, but there are always loopholes.

If the season were to end today with no penalties in place, the Devils would pick 11th assuming that the lottery played out in relation to the odds. That means that they are being penalized 19 positions in theory.

That is certainly significant, but it can be viewed as a slap on the wrist in comparison to the original punishment. The NHL has put itself in a tough spot in terms of handing out future discipline, and teams won't soon forget the backtracking done in this situation.  

 

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