New Jersey Devils Get Severe Penalty Handed Down By The NHL

All I can say is WOW. In a stunning turn of events, the New Jersey Devils have had their verdict handed down to them for their alleged circumvention of the salary cap with their original 17-year, $102 million contract with Ilya Kovalchuk signed back in July.

The penalty dished out by the NHL is the maximum fine of $3 million, the loss of a 2011 3rd-round draft pick, and the loss of a first-round pick in the next four years (at the Devils discretion). It seems like a very harsh penalty for a contract that does not seem all that glaringly different than a precedent that was put in place by teams like the Calgary Flames, Detroit Red Wings, Chicago Blackhawks, Tampa Bay Lightning, Boston Bruins, Vancouver Canucks, and Philadelphia Flyers. It seems at first glance, the Devils are being made out to be scapegoats, while the other teams get off scot-free.

In a statement released by the league, it reveals the penalty:

"As a result of the finding by Arbitrator Richard Bloch on August 9, 2010, that Ilya Kovalchuk’s initial free agent contract with the New Jersey Devils, dated July 19, 2010, constituted a circumvention of the NHL/NHLPA Collective Bargaining Agreement (the “CBA”), the National Hockey League announced today that the Club has been disciplined in accordance with Section 26.13(c) of the CBA as follows:

The Club has been fined $3 million.

The Club will forfeit its third-round draft choice in 2011 as well as a first-round draft choice in one of the next four Entry Drafts. It will be the Club’s decision when, within the next four years, it will forfeit its first-round choice. The Club must advise the League of that decision by the day following the conclusion of the Stanley Cup Final in the calendar year in which the choice will be forfeited. 

Per the terms of the settlement reached earlier this month by the NHL and the NHLPA, there will be no corresponding reduction in the Club’s Payroll Room resulting from the Club fine.

The League now considers the matter closed and will have no further comment on the situation, including with respect to the discipline that was imposed today."

It still seems a little harsh to me on a contract where Arbitrator Richard Bloch had ruled in his 20-page arbitration report that "Nothing in this opinion should be read as suggesting that either the Club or Mr. Kovalchuk operated in bad faith or on the basis of any assumption other than that the SPC was fully compliant with the CBA.  While intent is specifically listed as a potentially relevant factor in a proceeding such as this, the System Arbitrator here concludes the SPC terms themselves demonstrate this agreement "has the effect of defeating" the provisions of the CBA, with particular reference to the Team Payroll Range language."

Did the contract break the spirit of the rules?  You bet.  Did the contracts of Mikka Kiprusoff, Marian Hossa, Johan Franzen, Vincent Lecavalier, Henrik Zetterberg, Marc Savard, Chris Pronger, and Roberto Luongo break the spirit of the rules too?  Absolutely.  So why then are the Devils being made a scapegoat and having to pay for not only their sin but the sin of many other teams as well?  It's definitely a bitter pill to swallow, and it's no doubt the Devils agree.  Did it actually break the rules?  It seems to me, that no one has yet to present a convincing argument to that question, but the arbitrator and NHL seem to have somehow taken that position. 

I've yet to find a real convincing argument in the report or anywhere else for that matter, but my word isn't worth a whole lot in this instance, it's only really the National Hockey League and Commissioner Gary Bettman who have the final say.

GM Lou Lamoriello issued a statement, sort of along the lines of what you would expect to hear from Lamoriello, saying "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.”  Definitely nothing too earth shattering there, but it should make for some interesting discussions at the upcoming Board of Governors meeting.  Could the Devils explore the possibility of appealing the ruling? 

The Ilya Kovalchuk contract is really a story that seemingly never wants to end, so it would only be fitting if the Devils were to "extend" everything and try to appeal the ruling.  Stay tuned folks.

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