The National Hockey League struck down on Ilya Kovalchuk and the New Jersey Devils Wednesday morning, rejecting the mega 17 year – $102 million deal.
Courtesy of Dan Rosen NHL.com, National Hockey League Deputy Commissioner Bill Daly today issued the following statement regarding the free agent contract forward Ilya Kovalchuk signed with the New Jersey Devils: “The contract has been rejected by the League as a circumvention of the Collective Bargaining Agreement. Under the CBA, the contract rejection triggers a number of possible next steps that may be elected by any or each of the NHLPA, the Player and/or the Club. In the interim, the player is not entitled to play under the contract, nor is he entitled to any of the rights and benefits that are provided for thereunder. The League will have no further comment on this matter pending further developments.”
The Devils now have 5 days to refile the contract or under CBA, the Player’s Association has 5 days to file grievance, then an arbitrator will decide within 48 hours of the hearing.
Another option could be to restructure the contract but this deal is very complex and the most likely scenario is the players association filing a grievance.
According to Article 11.6a (iii), if the arbitrator sustains the league’s rejection of the contract, the contract will immediately “be deemed null and void” and the player will revert to his previous status as an unrestricted free agent.
If the arbitrator rules that the rejection was valid, then the league must immediately approve the contract and register it.
The 17 year – $102 million contract would have paid Kovalchuk $95 million through the first 10 years of the deal and only $7 million over the final seven years of the deal.
However, the contract does not violate any part of the CBA. The league contends the deal is a circumvention of the CBA, therefore in so many words, a cheat or retirement deal to get a lower cap hit.
What the league has on their side is three things according to Bob McKenzie of TSN.CA. 1. There has never been a deal this long (17); 2. No deal has taken a player to age 44. 3. No deal has had so many years (5 or 6) at such low salaries.
As McKenzie points out, it remains to be seen whether that’s going to be a winnable argument from the league.
One interesting dynamic would be whether Lou Lamoriello’s comments about how these type of deals shouldn’t be apart of the game, would work against him in a hearing as noted by Tom Gulitti of NorthJersey.com.
The consensus though among agents I’ve spoken with this morning is that if this goes to an arbitrator, the odds favor Kovalchuk winning and the contract being accepted.
The issue at hand for the league is they’ve overlooked a number of so called “retirement deals” in the past and again the contract doesn’t violate the CBA.
The loophole in the CBA that GM’s have used to their advantage is the league’s fault not the players.
Just last summer, the NHL overlooked two prominent deals that can be considered retirement deals. The Chicago Blackhawks signed Marian Hossa to a 12-year, $63 million contract, that takes him until age 42.
The deal is a clear “retirement deal” that pays Hossa $59 million over the first eight seasons but only $4 million over the final four years of the deal.
Hossa, 31, already has a bad shoulder and likely won’t play past 37 or 38.
The Philadelphia Flyers made a similar deal last summer, signing defenseman Chris Pronger to a 7-year extension that will take him to age 42.
The deal is heavily front loaded as Pronger will make $33.4 million in the first five years of the deal through age 40 but only $1.05 million combined in the final two years of the deal.
In the end, even if this deal ends up being rejected by an arbitrator, Kovalchuk will in all likely hood remain a New Jersey Devil, despite the complex issues surrounding a restructure of the contract for both sides.
After having a press conference Tuesday afternoon that has never been seen in the Devils organization, Kovalchuk would look extremely bad if he didn’t make concessions on a restructure deal, if it even comes to that.