The NHL gets it Right, Vindicates Me


Ilya Kovalchuk’s record breaking 17 year, $102 Million deal has been shot down by the NHL for reasons of cap circumvention (per TSN).  To brass tacks the article, the NHL put the kybosh on Lou and his Swamp Band on the grounds that the deal was being proposed and executed outside of good faith.

This occurs a mere day after it was announced, and a day after I posted the following comment (the 759th) on Nikhil Daljeet’s article, “Kovalchuk Signs with the Devils”:

I dunno, its just so transparent to everyone around the league.  Burke talks about it, but most GMs can’t seem to care.  Clearly I’m being idealistic about the management of sports franchises (at least collusion/tampering is hard to spot in the NHL).  It’s a classless move.  Realistically, the New Jersey devils anticipate Kovalchuk to play for at least 10 years and maybe as many as 13.  But do you really think that Kovalchuk would even want to play for the close to league minimum he’d be given (per capgeek: 550K in the last 5 seasons), especially at that age? No.

I do understand the point behind front or back loading a contract to try to snag a player but not eat up too much space.  It does actually make sense from a business perspective, and I agree with it.  But the agreement being signed in this instance isn’t being given in good faith.  Both sides WANT to break a deal, both are counting on it coming through, and have stacked the deck with a terrific incentive to break the deal. What sort of message does that send in terms of optics? Do you think would-be investors in NHL clubs would really like to see such open chicanery?

I won’t lie and say I’d utterly despise it happening for the Leafs, I have an imaginative enough mind to conjure up a similar deal benefitting the Blue and White.  I would like to see deals benefit the Leafs, of course.  But this just feels like cheating to me… and I don’t really like cheating to win anything.

Now, I would like to state that my opinion is just that, an opinion.  And as the resplendent Mr. Bauman has pointed out (twice, damnit) the deal signed – while transparently fabricated – was ostensibly within keeping of the letter of the law.  The NHLPA’s lawyers are going to have a field day providing evidence to counter the nullification of Kovalchuk’s deal.

But I feel that justice has been served.  As the TSN article (and earlier posts of mine in Nikhil’s article) points out, the lion’s share of Kovalchuk’s proposed salary – $95 Million – was to be doled out within the first decade.  The 7 final years cumulative salary? 7 Mil.  You don’t have to be a cynic to smell a rat.

This deal is the most openly prickish of its kind and it speaks to the sort of ineptitude required to run the National Hockey League.  An added benefit for the Devils is that this contract would come off their books should Kovalchuk choose to retire before fulfilling the contract terms.  As it was, the Devils would only face a $6 Million cap hit and only for as long as Kovalchuk wanted to play in the NHL.

I have sincerely believed from the very beginning that these long term deals given to the likes of Hossa, Luongo and Zetterberg were done so to circumvent the salary cap system put in place in 2005.  While all of the deals were negotiated and signed under the rules of the CBA, they were structured to exploit the cavernously wide loop-holes within.

The typical cop-out argument supporting such deals sounds a little like this: There are other examples of these kinds of deals being accepted by the NHL, so everyone else SHOULD do it because a moral gray area stops being gray if everyone else is doing it.

The same free-pass, one hand washes the other theory is erroneous and at best amoral.  Forgive the hyperbole, but that would be like saying “Who cares if Citibank and Lehman Brothers are fudging their numbers, if everyone’s doing it…well nothing could go wrong.”  Wait a tic…

Let’s take a look at article 26.3 of the CBA.  It covers the structuring of deals and proscriptions against cap circumvention:

(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 NHL seems to think along the same lines that I – and many others – do.  Given Kovalchuk’s age, the length of the contract, and the structuring of the salary in the final 7 years Lou Lamoriello tried to circumvent the cap rules.

This isn’t to say that Ilya Kovalchuk won’t end up getting insane money, or that the Devils’ organization won’t end up signing him to a suspect deal.  The NHLPA does have all ability to fight this and I suspect they will.  End of the day, they can come to table with a brazen yet hard-to-refute argument.  The deal isn’t technically illegal according to the rule book, no matter how unscrupled.

But I, for one, am glad to see that Bettman et al are attempting to grow a pair.  About time.