OT: NHLPA Files Grievance Over Rejection of Kovalchuk Contract
The grievance was filed today as expected. Should be interesting to see how it turns out.
I'm betting that the NHLPA will win, as the league dug itself into a hole by not rejecting previous contracts (DiPietro, Hossa, etc.) and its doubtful that they can prove that Kovalchuk plans to retire before he completes the contract (even though he will).
I think the NHL has more of a chance than you give them credit for. The probability of a player staying in the NHL until 44/45 is extremely low. Even then, the precedent is for teams to take them on one year deals (Recchi is on his 4th one year deal I believe at 41/42, Chelios was the same way). No team wants to be contractually obliged at a 6+ million dollar cap hit for a 44 year old player. There is no precedent for such an extended deal like this.
But what about Hossa? Let's compare the salaries:
Hossa
2016-17 -- $4 million (38)
2017-18 -- $1 million (39)
2018-19 -- $1 million (40)
2019-20 -- $.750 million (41)
2020-21 -- $.750 million (42)
Kovalchuk
2020-21 -- $3.5 Million (38)
2021-22 -- $750,000 (39)
2022-23 -- $550,000 (40)
2023-24 -- $550,000 (41)
2024-25 -- $550,000 (42)
2025-26 -- $550,000 (43)
2026-27 -- $550,000 (44)
One could argue based on precedent that a player in their 40's would be making approximately a million dollars, and thus the salaries for those years make sense. But how do you justify Kovalchuck's salary in those years? Salaries are based on performance. What rationale could a team have for keeping a player around into their mid 40's at league minimum? Simply put, a team would part ways if the player is only performing at a 550k salaray year in and year out.
This contract in my opinion is the most clear violation of article 26.3 of the CBA. This clause states:
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 Kovalchuck contract makes a mockery of the CBA. Then again, I think the Devils lose either way. Who wants a 35-38 year old version of Kovalchuck at a 6+ million dollar cap hit? No thanks!
The NHL will have to prove that Kovalchuk and the Devils do not believe that Kovalchuk will play through age 44, which would require either testimony from a party of or witness to the agreement that such an arrangement had, in fact, been made or that written documentation of some kind that details such an arrangement exists. Otherwise, the NHL's argument will be restricted to saying that Kovalchuk has entered into the contract with the intention of retiring before his contract is up with a common-sense argument, which they probably won't win because counter-examples, such as Chris Chelios, exist.
Intent is not necessarily required. "Or has the effect of circumventing the salary cap" is the only requirement. Seems to me that this case qualifies. This is a 9 mil/year player that would be a $6 mil cap hit. That is circumvention. Granted, other contracts have probably met this standard but this is the most egregious.
As there are no rules prohibiting a long-term deal that serves to reduce the cap hit by front-loading a contract, I would imagine that the Devils will argue that a) the contract is valid under the terms of the CBA and b) both parties intend to fulfill the contract, meaning that there will be repercussions in 15 years when Kovalchuk is still a $6 million dollar cap hit. This, combined with the NHL's lack of response to the Hossa and DiPietro's deal makes for a very strong case for the NHLPA, as they have a decent argument (unless it can be proven that Kovalchuk intends to leave before age 44; something that is true but isn't provable unless Kovalchuk or the Devils were very careless) and a handful of applicable precedents.
What could be really bad for the NHL is if the arbitrator does rule in favor of the NHLPA. Then, all the young guys coming off their rookie/second contracts in the next year or two (Drew Doughty, Jeff Carter, Alex Semin, etc.) are going to get signed for the most obnoxious contracts imaginable. Doughty will be 21 next off-season, and Los Angeles could feasibly sign him to a 23 year contract if the NHLPA wins this case.
And all laugh when some of these players go from 40-50 goal seasons to 4th line scrubs like Jonathan Cheechoo. There is so much risk associated in these contracts for the organization as well as the player. What if Doughty decides LA just isn't for him anymore? Really anything over 5-6 years is risky for both the player and the team.
August 9th, 2010 at 10:03 PM ^
Rejected. Huge win for the NHL.
August 9th, 2010 at 10:22 PM ^
Yeah, this was nice to see. It will be even nicer if the NHL slaps the Devils with a cap penalty (which I'm virtually certain the won't). This really was the only realistic result in this matter, though. Your analysis above in this thread was spot on.