NHL News: Ilya Kovalchuk contract struck down by the NHL management
It’s not over...it’s still not over. NHL fans were so close to a conclusion as the Kovalchuk drama finally appeared to be coming to a close but no, it’s not coming to an end so soon. Unless you have been living under a rock, everyone knows that the Russian Ilya Kovalchuk was the most sought after and costly catch of this year’s free agency. One after the other, teams wooed the Russian but he wanted an unreasonable fortune to ink a piece of paper. Finally, the New Jersey Devil’s decided to hire the big catch. However, the NHL had other plans and did not allow the New Jersey Devil’s GM Lou Lamoriello and Ilya Kovalchuk’s scheming to work out.
The deal that Kovalchuk wanted was an unreasonable one. Firstly, it was an obscene amount of money but secondly, because under the collective bargaining agreement, the amount he wanted would have meant that a significant cap hit would have to be taken by the team that signed him. Signing Kovalchuk on his terms meant losing out on a number of other lesser valued players because of the salary cap. However, the ruling was never going to stop clever general managers from finding newer ways of attracting expensive players to their rosters.
Roll out the front loaded contracts please - the salary cap is usually calculated by dividing the total amount in a contract over the number of years that the contract is going to survive. So if a player inks a $10 million contract for the next 10 years, the team takes a salary cap hit of a million dollars for each of those ten years. Are you beginning to see the loophole yet? So if a team signs a player like Kovalchuk for the next 11 years, and then gives him a contract for 17 years by handing out almost all the money in the first 11 years, what is the final result? The team goes through an 11-year contract disguised in the shape of a 17-year contract. This is primarily done in order to sneak under the salary cap.
That was exactly the problem with Kovalchuk’s contract which formed the reason why it was struck down by the NHL. Kovalchuk signed a 17-year contract but would have been paid over 95% of his salary in the next eleven years. Kovalchuk would have been earning next to nothing in the last 6 years of his contract. However, it would have been enough to make it look like the Devils still have a player named Ilya Kovalchuk on their team.
Although Kovalchuk said he would play for the 17-year term of the deal but we could only chuckle on the inside when he said that. Kovalchuk would play until 2022 at best when the money slows down to $750,000 a year, but no one is going to admit that. Even though he would be 44 years old after serving a contract for the next 17 years, the Russian might not be appearing on the ice but only on the books as he would still be a New Jersey Devil forward. All in all, a salary cap hit of 6 million over 17 years would be registered on the official scales even though the team would be paying Kovalchuk $11.5 million dollars in the first two seasons, $10.5 million in the next five and another $8.5 in the following season.
Considering that, the NHL finally decided to step in and stop the ridiculously long contracts aimed at side stepping the cap. What happens now is that the NHL Players Association has 5 days to register their grievance with the NHL. In that event, the case would be presented before an arbitrator who is familiar with the ins and outs of the collective bargaining agreement. The NHL and the NHLPA would then have to agree upon an arbitrator. The arbitrator would then rule if Kovalchuk’s contract is designed to circumvent the salary cap limit or not. If the arbitrator sides to go with the NHL, Kovalchuk will become a free agent all over again and the deal would have to be rewritten.
The arbitrator is Kovalchuk’s best bet now because it’s next to impossible that any team would give Kovalchuk anything which resembles the hundred million dollar offer from the Thrashers. One can only say that the saga begins again.
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