A Quick Note On The Kovalchuk Contract Rejection

by on July 20, 2010 in Opinion - 25 Comments

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In their report, TSN mentions section 26.3 of the CBA which alludes to the NHL’s right to reject a deal upon suspicion of circumvention. There’s just one problem: Kovalchuk’s contract didn’t outwardly violate any payroll or term stipulations in the CBA (which are outlined in section 50).

In other words, the Devils have NHLPA has an excellent case to file a grievance. Sure, the league suspects circumvention, but how can they actually prove it when the terms of the contract conform to the existing stipulations of the CBA? Not to mention the league has in past seasons allowed equally-suspicious contracts to the likes of Hossa, Luongo, Zetterberg, Franzen and Pronger, among others. Or the fact that Chris Chelios was playing in the league last season at the tender age of 47.

Parsing the CBA: Term limits on contracts? None. Mandatory retirement age? None. Limits on individual contracts extending beyond a certain age limit? None.  By all technical measures, the contract conforms to the CBA as it is written. The ethics of the contract may be called into question, but how can those accusations be proven when there is no specific violation of the agreement, when similar contracts have already been approved, and when players have played well into their 40s as recently as last season?

This is going to get real ugly, real fast.  There is absolutely no way this can end well for the league, regardless of the final ruling.

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  • LeafsRyan.

    first

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  • djamon

    You and I are of the same mind on this one Garrett. Knowing it and proving it are 2 very different things.
    .
    I’ll be curious to see if the Devils are up to a fight.

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  • Frostbittenjam

    If this goes to court the NHL will lose, no doubt about it.

    By the league’s own rules this contract is technically allowed. Whether the contract is ethical cannot really factor into any judge’s decision.

    I hope NJ doesn’t fight this though, no good can come of contracts like these, and they need to be stopped ASAP

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  • Tim

    LeafsRyan. wrote:

    first

    Douche…lol :)

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  • Tim
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  • http://mapleleafshotstove.com Garrett Bauman

    NJD probably won’t fight it; rather the team, the player & his representation, and the league will all meet to figure out how to restructure the contract.
    .
    What’s interesting is Lamoriello himself admitted to not being a fan of the contract, and that ownership had driven the negotiations. But he pointed out that within the CBA, it is legal and the precedent was set by other players previously.
    .
    Going to be one hell of a meeting, I’d say.

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  • JD

    Obviously it’s going to be pretty hard to prove this contract is an attempt to circumvent the cap but here’s something they might try to argue.

    Dean Lombardi was on FAN590 and he gave a little insight into the contract the Kings offered Kovalchuck. He didn’t talk specific numbers but he did talk about how they came up with what they thought would be a fair salary structure. He suggested they too offered a long term contract where the salary would decrease in the later years of the contract but he explained how they came up with the figures in these later years. He explained how they looked at other elite players and how they performed in later years, how much they could expect his production to fall off and how quickly as he got older. Now how can New Jersey argue that Kovalchuck’s value will be anything close to the league minimum for for the final 6 years of his contract? Chelios is 47 years old and his contract was for more than the league minimum. Sure teams have tacked on a few years to long term deals at really low numbers but never this many years and never at this low a number. I think it would have been a lot easier for Chicago to argue that Hossa would be worth $1M from age 39-42 than for NJ to argue that Kovi is worth $500K from age 38-44.

    Note: Lombari also mentioned that they were no where close to offering the term that Jersey signed Kovi for.

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  • light’em up

    It wont go to a court it goes to arbitration if it gets that far.

    I think the league would argue on the key phrases of “intended to” and “effect of defeating” the agreement or (again) the intentions of the parties as reflected by the agreement which is included in those passages of mind numbing word twisting and vagaries. Even though they have investigated and allowed previous contracts believed to be similar in nature this one is quite different than the others in that he receives 93% of the full value of the contract in the first 59% of the contract and receives (if he plays) 7% of the value of the contract over 41% of the term. Should he retire his contract comes off the books penalty free.

    Anyway I am no lawyer. I think they rework the deal by a couple years so it ends about the same age as Hossa’s (42) which they already approved, and the league will pass it.

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  • I_am_I

    According to the CBA I don’t think Jersey can file a grievance:
    Section 17.2
    (a) A Grievance may be initiated by the NHL or NHLPA only.

    So New Jersey would have to take it to court and they would probably lose, if the court even decided to hear it. I don’t think the court has jurisdiction in resolving a dispute outside of the dispute resolution system specified in a CBA.

    So we are down to does the NHLPA Grieve the issue to an arbiter? Is it in the interests of the general membership to have this type on contract? Remember that the escrow system is based on actual salary not cap hit. So the years that Kovalchuk makes an extra $5.5M over the cap coupled with an ever increasing number of contracts doing this will eventually squeeze all the other players.

    If they do grieve then an arbiter has to decide if the contract circumvents the intent of the CBA, not the letter of the law in the CBA. As this contract seems to me to circumvent the intent of the cap system which is a provision in the CBA then the arbiter siding with the NHLPA is not a slam dunk.

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  • LeafsRyan.
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  • light’em up

    @ LeafsRyan.:
    It sends a message and it makes it a little more palatable for the league that way.

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  • http://mapleleafshotstove.com Garrett Bauman

    @ I_am_I:
    It would be the NHLPA that would have to file the grievance … that’s a typo on my part.

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  • I_am_I
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  • I_am_I

    LeafsRyan. wrote:

    That does make sense but it would seem really dumb to make a huge debacle over just cutting of 2 years lol

    Cut the last 2 and bump the last remaining 4 up to $1M (like Hossa’s) and they are golden. Cap hit is $6.9M then. Which is one entry level contract higher.

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  • JD
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  • Snots

    Hard to believe the NHL has questioned Mr. Lamoriello.

    Hey Lou !!! Oops?

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  • mcloki

    @ Garrett Bauman:

    That would be best. The joke has grown old. Bring on the “Banhammer”.

    This is just another in the long list of NHL mismanagement mistakes that is the tenure of “Count Bettman”.

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  • I_am_I
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  • hotmbt

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  • Jordan

    @ hotmbt:
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  • Jordan

    hotmbt wrote:

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  • Jordan

    hotmbt wrote:

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