The NHL succeeded today, as arbitrator Richard Bloch ruled that that Ilya Kovalchuk contract signed with the New Jersey Devils was indeed circumvention and should by nullified.
The Devils signed Kovalchuk to a 17-year, $102 million deal on July 19, which would have paid the Russian winger $6 million for each of the first two seasons, then $11.5 million for each of the next five seasons, $10.5 million in 2017-18, $8.5 million the next season, $6.5 million in 2019-20, $3.5 million in 2020-21, and $3.5 million total over the last six years.
Kovalchuk would have been 44 when the contract expired.
“(Playing until 44) is not impossible,” Bloch said, “but it is, at the least, markedly rare.”
Listen, no one was arguing that it wasn’t circumvention. Since the NHL’s Collective Bargaining Agreement calculates a salary cap hit by the contract’s average (the deal would have paid Kovalchuk an average of $6 million a year), rather than that year’s actual salary, the Devils loaded a lot of cheap years on the back-end to allow the average to drop far lower than the $11.5 million each year from 2012-17. It was a shady deal, no doubt.
But it wasn’t that simple. Marian Hossa signed a 12-year, $62.8 million contract with the Chicago Blackhawks in May 2010 that pays him an average of $5.233 million despite being worth $7.9 million for each of the first seven seasons. Hossa, who will be 42 when the deal expires, lifted the Stanley Cup above his head at the end of the season. The NHL investigated the deal, but let the Blackhawks off with a warning.
Goaltender Roberto Luongo signed a new 12-year, $64 million deal with the Vancouver Canucks in September 2009 that paid him an average of $5.33 million despite being worth $10 million in the first year and $6.7 million for each of the next seven years. Luongo will be 43 when his contract expires. Once again, the NHL allowed the deal to pass.
Chris Pronger signed a new 7-year, $34.45 million deal with the Philadelphia Flyers in July 2009 that paid him an average of $4.92 million despite being worth $7.6 million in the first two years, $7.2 million in year 3, and $7 million in the fourth year. Pronger will be 42 when the contract expires. The NHL’s only action was to force the “35-and-older” clause onto the contract. That clause, under Article 50.2(c-iv) of the NHL Collective Bargaining Agreement, states that when a team signs a player who is 35 or older (as of June 30 prior to the season the contract goes into effect), the team is still responsible for the annual salary cap hit if the player retires before it expires. The Flyers argued otherwise, since Pronger didn’t turn 35 until October 10, 2010, but eventually decided not to officially dispute the decision.
That’s called precedent, and it’s the reason why few people seemed to expect the NHL to win at arbitration. But that’s exactly what happened. Apparently playing until 44 is extremely rare, but 43 isn’t?
Also interesting is that Bloch noted that he didn’t believe the Devils or Kovalchuk acted in bad faith. Supposedly, the NHL chose not to reject the Hossa, Pronger, or Luongo deals because they couldn’t prove the deals were not done in good faith.
So Kovalchuk is now an unrestricted free agent, free to sign with any team. According to Devils’ president/general manager Lou Lamoriello, New Jersey and Kovalchuk are already having discussions on a revised contract. New Jersey probably still remains the best chance for Kovalchuk to sign in the NHL, unless he’s willing to sign a one-year contract.
Kovalchuk reportedly has an offer on the table from SKA St. Petersburg of the Kontinental Hockey League in Russia for approximately $9 million a year. Losing one of the NHL’s elite scorers to Russia would be a disaster, but the NHL talking a hard stance on these long term contracts, the Russian deal is probably looking pretty attractive right now.
So the NHL rejected the Kovalchuk contract, after allowing the Hossa, Luongo, and Pronger deals to stand. But it’s not too late to do the right thing. The NHL now has precedent. They had an arbitrator side with them to reject shady contracts that appear to circumvent the salary cap.
According to Article 26.10(b) of the CBA, the league is allowed to open investigations of contracts that have already been approved for suspicions of circumventions. Furthermore, 26.10(d) states that there is no time limitation that would prohibit the league from looking at the Hossa, Pronger, and Luongo deals.
It’s time for the NHL to do the right thing. If they refuse to take another look at these deals, it creates an appearance that the league was singling out New Jersey. You might start to wonder if the Detroit Red Wings offered Kovalchuk the same contract, would the NHL have rejected it? If the league fails to act, you might have to say yes to that question.
The Los Angeles Kings were the primary team vying to sign Kovalchuk. The Rangers were also becoming a rumor late in the process, and throughout the grievance uncertainty. Would the NHL rather have one of their premier players on the only team in the No. 2 market in the country, and on the No. 2 team in the #1 market in the country. Despite being better than the Rangers for most of the last 15 years, the Devils still play second-fiddle. Even with Martin Brodeur, Zack Parise, and Ilya Kovalchuk, the Rangers will still outpace the Devils in attendance and TV ratings. New York may love in a winner, but in hockey, they love the Rangers more.
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