Adam B. D.Should NHL Have Nixed Kovalchuk Deal?
July 24th 2010 13:16
Bruce Bennett/Getty Images
Ok hockey fans, this is your chance to chime in.
This past week, we saw the New Jersey Devils win out in the Ilya Kovalchuk sweepstakes by signing him to a whopping 17 year, $102 million deal. However, Kovy has generated as much drama as the celebrity wannabes from Real Housewives of New Jersey this offseason. Right on cue, the NHL has stepped in to reject the deal on the grounds that the contract is an attempt to circumvent the salary cap.
I am not a lawyer, so everything I am about to say is pure opinion.
I read through the CBA to see what I could find in terms of specific language about nixing deals due to cap circumvention. On a side note, if you are an insomniac, the NHL CBA could benefit you greatly on those tough nights.
Here is what I found in article 26 of the NHL CBA:
26.3 Circumventions.
(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.
The above article seems to state that the NHL has the right to nix any deal in which it is determined that the team signed a player to a contract with the intent of circumventing the salary cap. The NHL has the burden of proof to show that the Devils intended to circumvent the cap, which might not be so easy, given the broad language of the article. There seems to be a lot of grey area, which should give the NHLPA some wiggle room in their dispute that the contract should stand.
Speaking as a non-biased person, the NHL should have prevented these types of deals when they first began, but instead they set a dangerous precedent by allowing similar contracts to go through in prior years. The Devils should have heeded the warning that the NHL was getting ready to make an example of someone when they investigated both the Flyers and Blackhawks for the Pronger and Hossa contacts, respectively.
Here is a breakdown of the Kovalchuk contract, compared to the similar contracts mentioned above that the NHL has allowed.
Ilya Kovalchuk (Devils) - 17 years, $102 Million
Cap Hit - $6 million per year
Annual Breakout - Years 1-2, $6 mil per year; Years 3-7, $11.5 mil per year; Year 8, 10.5 mil; Year 9, $8.5 mil; Year 10, $6.5 mil; Year 11, 3.5 mil; Year 12, 750K; Years 13-17, 550K per year.
Marian Hossa (Blackhawks) - 12 years, $62.8 million
Cap Hit - $5.233 million
Annual Breakout - Years 1-7, $7.9 mil per year; Year 8, $4 million; Years 9-10, $1 million per year; Years 11-12, $750,000 per year.
Chris Pronger (Flyers) - 7-years, $34.45 million
Cap Hit - $4.92 million
Annual Breakout - Years 1-2, $7.6 million per year; Year 3, $7.2 million; Year 4, $7 million; Year 5, $4 million; Years 6-7, $525,00 per year.
The above numbers are courtesy of CapGeek.com
While the contracts are similar, the Devils should have known they would be investigated for this deal. If the similarly structured 12 year deal (Hossa) was investigated, why would they think they could get away with the 17 year deal? They gave the NHL the perfect chance to make an example of someone and set a new precedent. With Kovy making less then $1 million per year on the last 6 years of the contract, he has far more "garbage years" then either Hossa or Pronger.
My opinion is that the contract should stand, based on the NHL's inability to nip the problem in the bud when these contracts were first handed out. Every front loaded contract is a circumvention of the cap, but in years past, it was deemed acceptable. The Devils were asking for trouble by pushing the envelope with this contract, especially the year after 2 teams were investigated, but the NHL has been asking for it by allowing similar contracts in the past.
Please feel free to share your opinion on the matter.
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