04/19/24
July 20, 2010
NHL Rejects Kovalchuk 17-Year, $102 Million New Jersey Deal: The NHL has rejected a massive contract for Ilya Kovalchuk with the New Jersey Devils on the grounds that it is "cap circumvention." Kovalchuk would have earned $6 million each of the next two seasons, $11.5 million for the following five seasons, $10.5 million in the 2017-18 season, $8.5 million for the 2018-19 season, $6.5 million in 2019-20, $3.5 million in 2020-21, $750,000 the following season, and $550,000 for the final five years of the unprecedented deal.
Well, in their defense, they're not paying him much from the time he's 39 until the deal ends when he's 44. I love this. As a Devils fan, I am sick and tired of seing every top-notch player that has come up through the organization leave (Brodeur being the obvious exception). Look at the impacts that guys like Nidermayer, Rafalski, and Arnott have had with new teams after leaving via free agency. To a lesser extent, Gomez, Gionta, Sykora, Madden, and others come to mind.
I think this finally shows some commitment to the fans. They wonder why they can't fill the seats to watch Brodeur back up a bunch of young talent that will soon jump ship to the Rangers or Red Wings or another free spending club. This should go a long way to putting some asses in those $100 seats at the Pru. If they can lock down Parise for a significant portion of those years, it would be even better.
posted by tahoemoj at 11:19 AM on July 20, 2010
I don't fully understand the salary cap rules, so I have a question. While I understand that his cap hit is the average of the contract (in the case $6 mill), is that constant if he is traded later on, or does his cap hit change to what is left on the contract? Reason I ask is would anyone want to trade for a guy on 2020 whose cap hit is almost double his actual salary?
posted by MeatSaber at 11:20 AM on July 20, 2010
I don't fully understand the salary cap rules, so I have a question. While I understand that his cap hit is the average of the contract (in the case $6 mill), is that constant if he is traded later on, or does his cap hit change to what is left on the contract? Reason I ask is would anyone want to trade for a guy on 2020 whose cap hit is almost double his actual salary?
The cap hit is $6M for the duration of the contract, regardless of whether the player is traded.
Why would a team trade for him in 2020 ?
If a team (Nashville, Islanders, Atlanta for example) is having trouble getting to the Salary Cap Floor, they might trade for him, as they'd be able to use a $6M cap hit, and only have to pay $0.5M in actual cash.
The Devils might make that trade, if they are having issues in 2020 getting under the Cap Ceiling.
There are different rules for players over the age of 35 (when they sign the contract): When a player aged 35 or older signs a multi-year contract, his average salary is counted against the team's salary cap during every year of the contract, even if the player retires before the contract is up.
.
Of course, all this is subject to change with a new CBA, which Donald Fehr* and The Weasel will be negotiating shortly.
*I'll bet serious money he's going to be the new head of the NHLPA shortly
posted by tommybiden at 12:40 PM on July 20, 2010
Thanks for the clarification, tommy. I so used to teams looking to circumvent the cap by getting lower cap numbers, I didn't see it from the other side...
I wonder how hard the owners will fight to close this loophole in the new CBA. Their only sticking point in 05 was "cost-certainty," and these ridiculous contracts do nothing to endanger that, other then the front-loaded payouts. I'd think if an owner didn't want to pay that kind of money at the beginning of the contract, it would never be offered. But when a team like Toronto or Detroit offers these kind of deals, how do the Minnesotas and Nashvilles compete?
posted by MeatSaber at 02:19 PM on July 20, 2010
But when a team like Toronto or Detroit offers these kind of deals, how do the Minnesotas and Nashvilles compete?
For the record, Toronto hasn't offered anyone a deal like that yet.
Probably because no one can imagine playing for the sad sack Leafs for 10+ years.
*sob*
posted by grum@work at 05:10 PM on July 20, 2010
it's ridiculous and is an attempt to circumvent the CBA and Salary Cap. This strategy was invented by Garth Snow of all people.
posted by WeedyMcSmokey at 06:13 PM on July 20, 2010
And the NHL has rejected the deal as being cap circumvention!
Rcade, can you change the FPP on this?
Wow! Oh yeah, and wait for the NHLPA to flip out considering there are a number of other contracts which are quite similar to this one.
posted by wfrazerjr at 10:04 PM on July 20, 2010
How can the NHL justify voiding this deal ?
It's set up the same way as the contracts of Hossa, Luongo, Lecavalier, Pronger, Zetterberg, Franzen, Keith, and Savard.
The only difference is term, and in a couple of the above cases, only a few years difference.
posted by tommybiden at 10:17 PM on July 20, 2010
Scott Burnside at ESPN's summary of the rejection and course from here.
posted by boredom_08 at 02:34 AM on July 21, 2010
How can the NHL justify voiding this deal ?
It's the proverbial straw. And this cap circumventing contract is slightly more obvious, just enough, than the other ones. If I put on my tin-foul hat I could also argue that it's because the most coveted free agent of the offseason signed with New Jersey and not a bigger market like NY or LA. Or maybe Lou Lamoriello disliked it so much he called in a favor.
posted by MrFrisby at 05:31 AM on July 21, 2010
Or maybe Gary and Lou planned it all along?
posted by wfrazerjr at 11:31 AM on July 21, 2010
I realize that this contract has now been voided, but I have a question regarding long-term deals in the NHL. If we consider the NFL and MLB to be the two ends of the contractual guarantee spectrum, (with the third year of an NFL contract not worth the ink it's signed with and a long-term MLB deal sufficient reason to put the entire value of the contract in escrow even if the player's arm falls off tomorrow and you then manage to trade him to a team in Japan) where do NHL contracts fit in there? Is it reasonable to think that all 17 years of this contract--had it been ratified--would have come to pass, or is this just some wacky grandstanding?
posted by bender at 12:11 PM on July 21, 2010
From Wikipedia, so take it for what it's worth...
The NHL has become the first of the major North American leagues to implement a hard cap while retaining guaranteed player contracts. Guaranteed player contracts in the NHL differ from other sports, notably the NFL, where teams may opt out of a contract by waiving or cutting a player. NHL teams may buy-out player's contracts, but must still pay a portion of the money still owed which is spread out over twice the remaining duration of the contract. Any player can be bought out for one-third of the remaining salary if younger than 26 at the time of termination, or two-thirds if 26 or older, over twice the length of the remainder of their contract. Trading cash for players or agreeing to pay a portion of a player's remaining salary after trading him are forbidden in the new CBA in order to prevent wealthier teams from evading the restrictions of the cap.
posted by MeatSaber at 03:22 PM on July 21, 2010
17 years? What do they expect him to be capable of in 17 years?