AnalysisBusiness of Hockey

The NHL Has No Case Against Kovalchuk

In case you missed it, and if you did, you’ve been living under a rock for the past 24 hours, the NHL rejected Ilya Kovalchuk’s deal with the New Jersey Devils. The 17-year, $102 million deal would have paid Kovalchuk $98.5 million in the first 11 years of the deal, with Kovalchuk earning the league minimum ($550k) for the remaining years, save for one year where he would make $750k. The Devils, in a rare PR slip up, held a press conference to announce the signing before the NHL had approved the deal. Less than 12 hours later, the deal was rejected.

The deal, although clear circumvention of the salary cap, is legal within the verbiage of the CBA. The NHL has decided to make its stand against these long term, front loaded, contracts with Kovalchuk, but in reality, the problem started in 2007 when Mikka Kipprusoff signed his new deal with Calgary. The deal included an extra year at the end of the contract for $1.5 million. Not exactly alarming, but it made the loophole in the CBA very evident to the other 29 NHL GMs.

Contracts like Vinny Lecavalier (11 years, $85 million with one year at $1.5 million and one year at $1 million), Henrik Zetterberg (12 years, $73 million with two years at $1 million), Marian Hossa (12 years, $63.3 million with four years at $1 million), Duncan Keith (13 years, $72 million with three years at < $3 million, including one year at $1.5 million), Roberto Luongo (12 years, $64 million with one year at $1.6 million and two years at $1 million) made the loophole the topic of conversation amongst NHL GMs, and the NHL front office looking to put an end to the contracts. The NHL has had a little success, as they declared the Chris Pronger contract to be a 35+ contract, despite the fact that he signed the deal before he was 35 years old, something that the CBA verbiage is rather ambiguous about. The Chris Pronger contract is a separate issue altogether though.

When you look at the above contracts, each one has added years at the end of the contract with the sole purpose of bringing down the salary cap number. Although none are as extreme as the Kovalchuk deal, they are still blatant salary cap circumvention contracts. What is similar with each of the aforementioned contracts is that each one is designed to have the player signed up to, or past the age of 40. Luongo’s and Hossa’s contracts will have them signed until they are 42, and Keith’s contract leaves him signed until he is 40. Kovalchuk’s contract will keep him signed until he is 44. In terms of length, there is minimal difference here. If you expect any or all of these players to continue playing well into their 40s, then I want to take a sip of whatever it is you’re drinking. Although playing until 41 isn’t exactly unheard of (see: Chelios, Chris), each one of these deals is specifically designed to have the player retire prior to the expiration of the contract. I’m not being biased, I’m being realistic.

The main argument with the Kovalchuk contract is that his deal has 7 years at or near the league minimum salary of $550k. These years make the Kovalchuk contract blatant circumvention, but only in the sense that the structure of the contract was ridiculous and an attempt to further exploit the loophole in the CBA. The NHL has no case because all Lou Lamoriello and the Devils have to do is take some of those $11.5 million seasons, and redistribute the cash to the back end of the contract to bring the salary to around $1 million, and then resubmit the contract for approval. By doing so, the Devils do not have 7 years of league minimum, but 7 years at twice the league minimum, which is how the other contracts are structured. When this is done, and it will be very soon, the NHL will have no case against the Devils, because of the previously approved contracts that pay 40 year old players $1 million, as described above. Sure, Kovalchuk would lose around $500k per season for a few years, but would be gaining some of it back at the end of the deal when he would be making league minimum. It’s not a win-win, but it’s as close you can get to one while leveraging what the NHL has already approved.

It is good to see the NHL grew a pair and is attempting to put its foot down with these contracts. However, the simple solution is to redistribute the money. It’s hard to see Kovalchuk rejecting that type of deal, as it is unlikely for him to receive that lucrative of a contract, with that job security, anywhere else. So while most will consider this a win for the NHL, it is simply delaying the inevitable. Kovalchuk will be a Devil, for the same term, same salary, and same AAV, the only difference will be the distribution of the salary. This, mind you, is coming from a Ranger fan, who doesn’t want to see Kovalchuk and Parise on the same team for the next 17 years.

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  • People forget that the league minimum will likely be more then than what is written in at the end of his deal… so the deal would need restructuring anyway.

    Interestingly there’s been a few tweets going round that say Lamoriello knew the NHL would reject the contract PRIOR to the news conference.

  • I’m of the mind that Kovalchuk in Jersey isn’t the worst thing for the Atlantic Division; he didn’t set the world on fire the last two months he played, and I’m still convinced that Parise is the primary shooter on offense.

    Don’t think having two shoot-first forwards can be a problem? See the Iginla/Jokinen/Calgary Flames case. Which they are trying again…

  • thats it im glad kovis deal did not go through .our offence problems are solved.cause that idiot eklund on hockey buzz has gabi being traded to la so we can sign kovi now.thats it were gonna trade gabi whos a better all around player for a slim chance at kovi who is definitly gonna fix his contract with the devils raise the cup banner now lol.

  • It’s like that old joke with saddam

    your in a cave with a gun with two bullets

    eklund, saddam Hussein and ahungry lion are going to attack you

    who do you shoot?

    Answer eklund. Twice. In the head

  • You’re right that Kovy will be most likely be a devil, I think Lou actually did this intentionally to create a pressure point for the league when the next CBA is negotiated. I think the league wants max term deals, and I think that term is about 8 years. Think about it, if the NHL wants to pressure the PA into max terms, how would they do it. Wouldn’t one way be to have a strong show of force by denying a deal that was blatently designed to circumvent the cap? Well, Lou is “the father” as they call him and was an instrumental part of the creation of the current CBA and the Cap Guru himself works for the Devils as well. So, don’t you think that if they had wanted to, the Devils could have structured a deal correctly that would not get rejected? This was an intentional move to set up max terms when they go to the table in 15 months. I saw it immediately. I mean, come on, of course the league was going to reject the idea of Kovalchuk making $550k at 38. Lidstrom is 41 and he is going to make $6.5mm next year.

  • I love that you wrote this. You’re always such an arrogant asshole, acting like you know what you’re talking about. Talking to other fans like they’re beneath you, as if you’re an expert. I read your garbage from time to time and laugh. It’s funny when you write things like this and have no idea what you’re talking about and then it comes back to slap you in the face. Even Dancing Larry could tell this contract was bullshit, and the NHL would win. Time after time, Dave, you are wrong. Please, stop acting like you know hockey, and just watch the games. Stop talking, and acting like you’re an expert.

  • No reason to delete your comment. I was wrong, and the Kovalchuk decision surprised me, as I noted in the most recent post about this subject.

    But hey, while we’re at it, since you’re calling me out on being wrong, can you give me credit for being right? Like with Kotalik?

    I’m guessing you don’t like anything I contribute at the Banter either, but yet you don’t say anything there? Questionable at best.

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