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Report- Arbitrator Rules In NHL Favor In Kovalachuk Case

via Liz Mullen tweet,

Breaking—Arbitrator rules in League’s favor in Kovalchuk case, source says

added 5:22pm, via Nick Kypreos tweet,

Kovalchuk remains UFA. Confirmed by sources.

added 5:37pm, from Dan Rosen of NHL.com,

(Bill) Daly released the following statement with regard to the decision by Bloch that the League properly rejected the contract agreed to by the New Jersey Devils and Ilya Kovalchuk:

“We want to thank Arbitrator Bloch for his prompt resolution of a complex issue. His ruling is consistent with the League’s view of the manner in which the Collective Bargaining Agreement should deal with contracts that circumvent the Salary Cap.”

more

added 6:59pm, from Tom Gulitti of Fire & Ice,

The NHL Players’ Association also released a statement through spokesperson, Jonathan Weatherdon.

“The NHLPA is disappointed with the Arbitrator’s ruling to uphold the NHL’s rejection of the contract between the New Jersey Devils and Ilya Kovalchuk,” the statement read. “The NHLPA is currently reviewing the decision and will have no further comment at this time.

more on this topic…

added 7:06pm, from Damien Cox of The Spin,

The Kovalchuk decision, meanwhile, addresses a growing sentiment among teams that the front-loaded, long-term deals were becoming a competitive advantage to a handful of teams since two-thirds of the league’s clubs couldn’t dream of signing such contracts.

Some GMs said the NHL needed to put it’s foot down when Kiprusoff became the first to sign this type of contract back in 2007.

“I wish the NHL had started this five years ago,” lamented one GM.The NHL says it is still investigating the contracts signed by Hossa and Pronger.

more

Filed in: NHL Teams, New Jersey Devils, NHL Talk, NHLPA, | KK Hockey | Permalink
  Tags: ilya+kovalchuk

Comments

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Twig in Houston's avatar

gotta be kidding me.

Posted by Twig in Houston from Houston, TX on 08/09/10 at 07:22 PM ET

Nate A's avatar

Wow. The league’s bullshit never ceases to amaze me. So who’s ready for another strike/lockout.

Posted by Nate A from Detroit-ish on 08/09/10 at 07:25 PM ET

Paul's avatar

Remember, the NHL now has the power, per the CBA, to fine both the team and Kovalchuk and remove draft choices too.

Reports are they won’t do it, but you never know.

Posted by Paul from Motown Area on 08/09/10 at 07:27 PM ET

Twig in Houston's avatar

i really wanted kovachuk to win this because it would cripple the devil’s future and because i’m so tired of little gary running to his lawyers everytime someone gets the jump on him.

found a way to sell a money pit to someone who will move it to a place that could make money? lawyers.

found a way to get around the salary cap? lawyers.

Posted by Twig in Houston from Houston, TX on 08/09/10 at 07:30 PM ET

Evilpens's avatar

HAHAHAHAHAHAHAHAHAHAHAHA

Posted by Evilpens on 08/09/10 at 07:30 PM ET

Avatar

I agree. This is the biggest load of BS from the NHL yet.  Poor little Gary gets his way again. This guy is the biggest douche on the face of the earth.  Wah wah wah wah….all the way to a 7 million dollar + paycheck.

Posted by callmedrw on 08/09/10 at 07:31 PM ET

SYF's avatar

Un-freakin’-believable…

Posted by SYF from the team that re-signed KFQ and DFC by KFH on 08/09/10 at 07:32 PM ET

Twig in Houston's avatar

i bet he goes to the khl now. what a joke.

Posted by Twig in Houston from Houston, TX on 08/09/10 at 07:35 PM ET

HockeytownOverhaul's avatar

two left fielders in one day, Hockey news knock outs.  First Salei to Wings, now Devils got ass to mouthed by the NHL?  wtf?

Posted by HockeytownOverhaul on 08/09/10 at 07:35 PM ET

Da lil Guy's avatar

This was the correct decision for a lot of reasons. It was a clear attempt to circumvent the cap, and an affront to those teams who either chose to play by the spirit of the rules or lack the financial wherewithal to compete with these cap busting deals - and, by extension, the fans of those teams.

Although I’m sure they won’t, it’s worth mentioning that the NHL now has the power to void contracts between any player and any team that is found to have committed ‘such a violation’ (per 26.13 (c)(vi) of the CBA).

Posted by Da lil Guy from Guelph, Ontario on 08/09/10 at 07:38 PM ET

Nathan's avatar

How much did the NHL pay the arbitrator under the table for this one?

Hope we’re all satisfied with the hockey we’ll get between now and 2012, because this shit likely means we’ll miss another season. And this time, I won’t be even a little upset with the players if they’re the reason a deal doesn’t get done… they took it raw when they signed the last CBA, and they’re taking it raw-er still now that the NHL is apparently allowed to essentially modify the agreement without collective bargaining taking place.

I’ll put it this way. If the NHL and NHLPA don’t have a much different partnership come 2012 (or 2013, or 2014, whenever they work it out), I may simply resort to being a “hockey fan,” and will have to get my fix with AHL and junior level games.

Posted by Nathan from the scoresheet! on 08/09/10 at 07:42 PM ET

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I agree its the right call. There’s a big difference between his contract and the ones signed over the last two seasons by Detroit and Vancouver among others. On their contracts, you can at least make an attempt to claim that the decrease in salary is to factor in the player aging, where in this case, its just so freaking obvious they had to put a stop to it.

Two things I’m wondering though. For one, with this new found power that the NHL has, will any team even attempt to sign someone to a retirement deal similar to ones already accepted by the NHL? Or will teams be afraid of the NHL coming after them, and not try to push their luck?
Also, is the NHL really going to take this as far as possible and take picks from the Devils and fine them both, or will they consider this the warning to all 30 teams, and let the Devils walk? I think they consider it the warning, mainly just because Lou and Bettman are old friends it seems.

Posted by Kstewy16 on 08/09/10 at 07:45 PM ET

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Remember, the NHL now has the power, per the CBA, to fine both the team and Kovalchuk and remove draft choices too.

Reports are they won’t do it, but you never know.

Posted by Paul from Motown Area on 08/09/10 at 05:27 PM ET

Jay Grossman can lose his license as an agent.

unreal, this league always finds a way to top themselves everytime. Lockout 2012, Here We Come!

Posted by FlyersFan on 08/09/10 at 07:46 PM ET

Evilpens's avatar

What part of putting the teams, players & agents on notice during the last season don’t you people get?

Or is it another opportunity to spank the monkey while screaming how much you hate Bettman?

Posted by Evilpens on 08/09/10 at 07:52 PM ET

Twig in Houston's avatar

this is the worst part and even the supporters of the decision see it. the nhl has “new found power.” just what little gary needed. more power.

next time around, why not just make multi-year deals illegal? 1 year contracts only. that way the “spirit of the cba” won’t get jailed sexed anymore.

Posted by Twig in Houston from Houston, TX on 08/09/10 at 07:54 PM ET

Avatar

Well, as much as we’re not going to see contracts like these in the new CBA, you can bet your ass the PA isn’t to let any “spirit of the CBA” horsesh*t into it either.

Posted by Garth on 08/09/10 at 08:01 PM ET

Da lil Guy's avatar

The arbitrators ruling must speak specifically to whether Grossman violated art. 26 - if the arbitrator ruled he did, the NHLPA is required to revoke his certification.

Interestingly, club GMs, Presidents and CFOs are also required to certify annually that they have complied with art. 26 - but the arbitrator is not directed to make specific findings on whether they have violated the article. The certification must be filed annually on July 10 ‘in order to retain his status’ as GM/President/CFO, but the CBA seems silent on what the league can or must do in the event that there is a violation other than the fact that the league must represent to the NHLPA that each of same have complied.

art. 26.8(a)-(c).

Posted by Da lil Guy from Guelph, Ontario on 08/09/10 at 08:01 PM ET

Avatar

Jay Grossman can lose his license as an agent.

unreal, this league always finds a way to top themselves everytime. Lockout 2012, Here We Come!

Posted by FlyersFan on 08/09/10 at 05:46 PM ET

Not quite - from the CBA:

(vii) Suspend any Club employee, Player, or Certified Agent involved
in such a violation for a period of time determined in the sole
discretion of the Commissioner, the System Arbitrator, or the
NHLPA, respectively.

so I could be suspended, which isn’t quite the same as losing it.

Posted by Karina on 08/09/10 at 08:03 PM ET

Avatar

Holy crap I thought the calendar would flip far beyond today, but, Evilpens, sing it sista!

Posted by NathanBC on 08/09/10 at 08:09 PM ET

Nathan's avatar

This was the correct decision for a lot of reasons. It was a clear attempt to circumvent the cap, and an affront to those teams who either chose to play by the spirit of the rules or lack the financial wherewithal to compete with these cap busting deals - and, by extension, the fans of those teams.

Although I’m sure they won’t, it’s worth mentioning that the NHL now has the power to void contracts between any player and any team that is found to have committed ‘such a violation’ (per 26.13 (c)(vi) of the CBA).

Posted by Da lil Guy from Ottawa on 08/09/10 at 05:38 PM ET

Clearly depends what side you take. If you side with the owners and league office, sure, this is the “correct” decision. Some of us side with the players.

I do agree that this contract violates the “spirit” of the cap, but legal agreements aren’t about spirit, so I find this real hard to swallow.

I know we’re talking about mostly millionaires here, and I’m not going to shed a tear for the players, but let’s not forget that when you side with the owners you are siding with the the really big, really rich guys, instead of the kinda big, kinda rich guys. Also consider that the owners generally make their fortunes from other ventures, while the players make almost all of their money via their profession as a hockey player.

If you want to get into discussions of bad manners, look no further than the last lockout. Do you think the GMs and owners in good, strong hockey markets felt that the decision by the small/non-viable markets to lock out was considered an “affront” to those teams that were successful on and off the ice, and happy with the previous arrangement?

Yeah, they probably felt that way. Yet they all shut up and presented a united front against the players. So, now that these big owners and GMs are finding ways to keep their players and sign new ones, do you expect them to give a shit about what the small guys think?

The NHL and its BOG will likely look shockingly different in a few years. There’s no doubt (based on these sort of contracts) that there are now a handful of GMs, execs, and owners in the league that disagree with the “official” NHL stance on these matters.

People act like the “greedy” players and their agents waltz into the office of NHL Club GM #1 and NHL Club Owner #1, clad in armor, holding automatic weapons, and force them to sign these deals worth dozens and dozens of millions in guaranteed money.

Not surprisingly, it doesn’t work like this! It takes two to tango.

I’d have to guess that there will be a massive amount of in-fighting between the two factions inside the NHL now that this decision has come down. Consider that:
- Holland/Ilitch
- Holmgren/Snider
- Wirtz/Bowman
- Gillis/Aquilini
- McPhee/Leonsis

Those are six very good organizations with dedicated, powerful, rich owners, in very large media markets. That’s 20% of the league’s most powerful people. Maybe not enough to steer the direction of the NHL going forward, but given their clout, I would think it’s a large enough group to create a lot of problems for the NHL if the next CBA isn’t drastically different, and isn’t more “large-market” friendly.

I don’t know what the answer is. I don’t think the cap is going anywhere. But I do think that these are the types of GMs/owners that are going to tell the little guys, “Look, we’re fine with the cap, and we’re fine with revenue sharing. But what we need from you this time around is a way for us to keep our players so we’re not punished for doing our jobs well.”

That is the real problem with this CBA. I’m not a cap fan for a regional sport like hockey, but I’ve given up on that fight. The cap is here to stay. I’m also just about ready to give up on the revenue sharing arguments. But if the NHL doesn’t allow teams a mechanism to retain the players that they’ve drafted and/or developed into stars, it’s cheating those clubs out of years and years of hard work, and cheating those fans out of everything they buy tickets and t-shirts and sweaters and caps for.

I’d like a version of the “Bird Rule.” Given the nature of hockey with its vast minor and junior league systems when compared to basketball, where players hit the bigs almost immediately, it would have to be tweaked a bit to fit hockey’s unique requirements.

Posted by Nathan from the scoresheet! on 08/09/10 at 08:11 PM ET

Avatar

I can’t wait to hear the arbitrator’s reasons for his ruling so that I can make an opinion on this!

Posted by NathanBC on 08/09/10 at 08:19 PM ET

Nathan's avatar

What part of putting the teams, players & agents on notice during the last season don’t you people get?

Or is it another opportunity to spank the monkey while screaming how much you hate Bettman?

Posted by Evilpens on 08/09/10 at 05:52 PM ET

What don’t you get about how putting them “on notice” last season is irrelevant if you’re putting them on notice for something that’s not even “wrong” to the letter of the law?

Last time I checked, the police don’t run around saying, “Hey, you, we’re putting you on notice—stop chewing gum. It’s not illegal, we just don’t like it, so stop doing it!”

Also, what don’t you get about why this is an egregious decision? Even if you agree that the Kovalchuk deal was intended to massage the cap number downward (which any of us would have to agree with), the problem here is that the NHL now has a precedent where they’ve essentially obliterated the whole point of “collective bargaining.” As a practical matter, the NHL can now enforce term limits on contracts, despite the fact that term limits were not collectively bargained into the agreement in ‘05.

Oh, one more unfortunate thing about this, as a fan of NHL hockey… despite all the problems the KHL has had financially, they’re hanging around, and if they can steal Kovalchuk and then maybe hang around another couple years, they might suddenly find a large pool of world class hockey talent looking for jobs…

Posted by Nathan from the scoresheet! on 08/09/10 at 08:22 PM ET

Evilpens's avatar

Nathan   UMMMM YEAH OK rolleyes

Posted by Evilpens on 08/09/10 at 08:24 PM ET

Primis's avatar

I’m just bummed that this means the Devils get to be saved from themselves…  it’s like how MLB had to outlaw trading draft picks because owners were trading away entire drafts for nothing….

Posted by Primis on 08/09/10 at 08:26 PM ET

Paul's avatar

I’m just bummed that this means the Devils get to be saved from themselves…

Posted by Primis on 08/09/10 at 06:26 PM ET

Hey, are you Doug MacLean, he said the same thing about 45 minutes ago.

Posted by Paul from Motown Area on 08/09/10 at 08:28 PM ET

Avatar

i agree with Nathan but the only solution to the problem is a soft cap or luxury tax. Owners will still find holes in any cba.

Posted by FlyersFan on 08/09/10 at 08:29 PM ET

Moq's avatar

It was a clearcut contract example of cap circumvention, which was rejected and put through system arbitration according to the stipulated rules. The ruling favoured the NHL, and I find it difficult to disagree with that decision. Hopefully, the details will be released soon.

Posted by Moq from Denmark on 08/09/10 at 08:41 PM ET

Lindas1st's avatar

First the Verizon-Google deal, now this! OMFG!

Posted by Lindas1st from New England on 08/09/10 at 08:47 PM ET

Avatar

It was a clearcut contract example of cap circumvention,

How?  By adding a bunch of years at the end of a deal at a lower amount to decrease the averaged contract value, and hence the cap hit?

This is the 8th or 9th deal which has done that.  Every long deal that tacks on years at lower values at the end of the contract (Keith, Zetterberg, Franzen, Hossa, etc) is designed with just this in mind, and all of those contracts were approved.

All of those deals ‘circumvent’ the cap in the same way the Kovalchuk deal does.  The Kovy deal just does it a little more blatantly.

Posted by HockeyinHD on 08/09/10 at 08:54 PM ET

Primis's avatar

Hey, are you Doug MacLean, he said the same thing about 45 minutes ago.

Posted by Paul from Motown Area on 08/09/10 at 06:28 PM ET

I’d say “See!  I’m so smart!” and be perfectly redolent.  Except then I remembered MacLean is unemployed, and also remembered his drafting record.

Way to make me feel bad, Paul!  wink

Posted by Primis on 08/09/10 at 08:59 PM ET

Evilpens's avatar

HockeyinHD  Wrong again !!!  Kovalchuk’s proposed contract in years 12 through 17 would have been a the league minimum for 2010-11, Do you or anybody else think that in the years 12 through 17 the League minimum is going to be 550,000 Dollars ??

Posted by Evilpens on 08/09/10 at 09:02 PM ET

Avatar

FlyersFan knows what I’m talking about

Posted by NathanBC on 08/09/10 at 09:09 PM ET

Paul's avatar

Devils/Kovy talking another contract.

Posted by Paul from Motown Area on 08/09/10 at 09:12 PM ET

Avatar

have been a the league minimum for 2010-11

So what?  If someone signs a two-year deal for league minimum THIS YEAR then they’ll be making less than league minimum NEXT YEAR if it goes up.

Posted by Garth on 08/09/10 at 09:39 PM ET

Avatar

So what?  If someone signs a two-year deal for league minimum THIS YEAR then they’ll be making less than league minimum NEXT YEAR if it goes up.

That sounds suspiciously like common sense, Garth. smile

Posted by HockeyinHD on 08/09/10 at 09:50 PM ET

Nate A's avatar

“I wish the NHL had started this five years ago,” lamented one GM.The NHL says it is still investigating the contracts signed by Hossa and Pronger.

So that last little bit. Does that mean the league could nix the year old Hossa deal and save Chicago from themselves too?

I don’t understand why this league even bothers buying paper. They ignore every rule they write down at a whim, and enforce rules they don’t write down.  Does CBA stand for Calvinball Association?

Posted by Nate A from Detroit-ish on 08/09/10 at 09:51 PM ET

J.J. from Kansas's avatar

So what?  If someone signs a two-year deal for league minimum THIS YEAR then they’ll be making less than league minimum NEXT YEAR if it goes up.

Both Capgeek and James Mirtle on Twitter told me that when a player’s contract salary falls below the guaranteed minimum, then his pay is increased to the minimum and his cap hit goes up to the amount it would have been if that year already had that league minimum amount written into it, no matter what it is.

In that vein, it does make the Kovalchuk contract more of a circumvention because in 17 years with normal inflation, the salary floor should be somewhere near $750K.  But, the Devils wouldn’t be punished retroactively in 2010-11 if that happens in 2025-26.

Still, the decision allows NHL decision-making vagueness another norm where nobody knows what the damn rule is because it seems to change from player to player and team to team.

Posted by J.J. from Kansas on 08/09/10 at 09:54 PM ET

Chris in A^2's avatar

This was the correct decision for a lot of reasons. It was a clear attempt to circumvent the cap, and an affront to those teams who either chose to play by the spirit of the rules or lack the financial wherewithal to compete with these cap busting deals - and, by extension, the fans of those teams.
Da lil Guy

It was entirely a means to circumvent the cap by high budget teams, which probably why average salary cap hits are in the CBA.  The idea that the CBA can be circumvented without violating its own provisions is preposterous.  A governing body can’t ignore the tenants of its own constitution just because it doesn’t like it’s implications.  So they did what every governing body tries to do when they don’t have the authority to change the rules, they get a judge that can change their meaning.

Posted by Chris in A^2 from Nyquist Puck Control on 08/09/10 at 10:19 PM ET

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Posted by J.J. from Kansas on 08/09/10 at 07:54 PM ET

I did not know that.  I wonder if THAT is specifically the reason that Zetterberg, Franzen and Luongo aren’t have their contracts looked at…

Although Hossa’s only ever goes down to $750K…

Posted by Garth on 08/09/10 at 10:20 PM ET

J.J. from Kansas's avatar

Posted by Garth on 08/09/10 at 08:20 PM ET

Yeah, I think it makes sense, but I didn’t know about it either until last week.  There is a chance that the NHL could still challenge previous contracts, but I think only the Hossa deal is in any danger and it’s very limited at that.

More details here

Weighing in though, I don’t see any way they can get Franzen or Zetterberg’s contracts voided.  It’s understandable that a 40-year old player will be playing and making $1M, it’s significantly less understandable that a 40-year old player would sign four years at league minimum.

Posted by J.J. from Kansas on 08/09/10 at 10:25 PM ET

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Paul Kukla founded Kukla’s Korner in 2005 and the site has since become the must-read site on the ‘net for all the latest happenings around the NHL.

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