NHL Rejects Contract for Ilya Kovalchuk and New Jersey Devils

In what we thought was a saga that was finally over, the NHL added another wrinkle, when it is reported that the $102 million, 17-year contract of Ilya Kovalchuk was rejected by the National Hockey League.  

So, the obvious question that jumps out is, "What happens from here?"  The process calls for two possibilities at this point:

1 - the NHLPA could file a grievance to dispute the rejection.  Ultimately, it would likely be resolved via an arbitrator, or

2 - Kovalchuk and the Devils can attempt to rework the contract.

It seems a bit odd that the NHL would take a stance on this contract, when it appears unlikely it could hold up in court.  After all, the Devils have in their history gone the legal route to attempt to overturn a ruling that appeared unjust that was given out by the NHL. Back in 1988, GM Lou Lamoriello took the NHL to court to give a temporary restraining order to prevent the suspension of Head Coach (at the time) Jim Schoenfeld without a proper hearing.  It was a definite black eye for the league, and something you would think would be avoided at all possible costs, so we will have to stay tuned to see how this plays out for sure.

In trying to figure out whether or not the contract should be legal, let's take a quick peek at what the CBA indicates:

It explains circumvention in section 26.3 of the document which reads:

"(a) No Club or Club Actor, directly or indirectly, may: (i) enter into any agreements, promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind, whether express, implied, oral or written, including without limitation, any SPC, Qualifying Offer, Offer Sheet or other transaction, or (ii) take or fail to take any action whatsoever, if either (i) or (ii) is intended to or has the effect of defeating or Circumventing the provisions of this Agreement or the intention of the parties as reflected by the provisions of this Agreement, including without limitation, provisions with respect to the financial and other reporting obligations of the Clubs and the League, Team Payroll Range, Player Compensation Cost Redistribution System, the Entry Level System and/or Free Agency."

Confused yet?  Let's dig a little deeper shall we and take a look at some precedent around the league.  One main issue of the Kovalchuk contract is whether or not the player would be expected to remain playing until age 44.  Bruins-a/landing_sports.html?blockID=262220&feedID=3352" title="Recchi re-signs in Boston" target="_blank">Mark Recchi just signed a 1-year contract at age 42 to play with the Boston Bruins.  Chris Chelios signed a contract with the Atlanta Thrashers earlier this year, finishing the year as a 48-year old.  So, it is not out of the question to think there is a possibility Kovalchuk could make it to age 44.  He certainly could have the intent to do so at this time and I'm not sure how this could be disputed either.

There is a track record of other players signing contracts with "phantom years" attached to the end of them.  According to Capgeek.com, Marian Hossa has four years of $1 million salary at the end of his 12-year, $63.3 million contract that takes Hossa to age 42, lowering his cap hit to a more friendly $5.75 million per year.

Roberto Luongo signed a 12-year contract valued at $64 million, with three "phantom years" at the end of his contract, which also goes to age 43 for Luongo.

Henrik Zetterberg signed a 12-year $73 million contract with Detroit, which has two "phantom years" valued at $1 million, allowing the cap hit to shrink to $6,083,333.

There are other players you can look at as well, like Chris Pronger, or Johan Franzen, but in the interest of time and space, I will keep the three mentioned above as the primary argument. 

So, does the NHL have a true problem with the Kovalchuk deal because of the seven years under $1 million in annual salary?  Stay tuned everyone, one more point risen in Tom Gulitti's Fire & Ice blog points out the Devils had hired Steve Pellegrini, formerly the NHL's Cap Regulator to be their "Cap Guru."  If anyone should know the ins and outs of the Collective Bargaining Agreement, it is Pellegrini.  

On top of that, GM Lou Lamoriello was intimately involved in the preparation of the CBA as well, so between the two of them, you would think they would have a lot of ammunition to use against the NHL in court if it were to get that far, or previous to that in front of an arbitrator. So, this situation has the ability to get VERY ugly, so stay tuned to see what unfolds.

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