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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

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Avatar

I don’t know what is more enjoyable, the fact this BS contract was thrown out or the whining and nashing of teeth from the Bettman haters! This made my day! smile

Posted by timbits on 08/09/10 at 11:18 PM ET

TheFreak's avatar

Going out on a limb here, but i’d like to see a high profile player sign for the league minimum with an already stacked team, like Detroit, you know - just to “win the cup”. Then what would the reaction of the NHL and the NHLPA be?

Posted by TheFreak on 08/09/10 at 11:31 PM ET

Evilpens's avatar

I don’t know what is more enjoyable, the fact this BS contract was thrown out or the whining and nashing of teeth from the Bettman haters! This made my day! smile LOL

Posted by Evilpens on 08/09/10 at 11:34 PM ET

Primis's avatar

Going out on a limb here, but i’d like to see a high profile player sign for the league minimum with an already stacked team, like Detroit, you know - just to “win the cup”. Then what would the reaction of the NHL and the NHLPA be?

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

The NHL wouldn’t care less.  The NHLPA would emo-gasm all over though…

Posted by Primis on 08/10/10 at 12:18 AM ET

aaron in phoenix's avatar

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 Jonny Ericsson’s ice cream truck on 08/09/10 at 06:11 PM ET

A thousand times this. Teams that draft well, and want to retain their talent should be able to. I don’t like the way the CBA is intended to bust up teams. You’ll likely never see another Yzerman, Sakic, or Lemieux, a player that spends his entire career with one team. Long term “retirement” type contracts are currently the only way to make it possible.

If a team has the financial means to spend more than the cap, let them do it on their home grown talent. While this doesn’t really pertain to the kovalchuk situation, I think it would be a great move in the long run.

From a fan standpoint, which is really all that should matter (they’re the ones buying tickets/merch), it’s sad to know that a favorite team will be busted up in a few years. I want to see longevity in teams, dynasties be built. Not a constant cycling of free agents, and salary dump trades.

Posted by aaron in phoenix from Section 102 on 08/10/10 at 12:34 AM ET

Moq's avatar

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.

You just answered your own “How?” question. There’s a tipping point where exploiting the gray areas become circumvention. It’s somewhat similar to speed limits, at some point you’ll be fined if the speed is continuously increased, and the difference between legality and transgression is negligible. You could probably find several similar examples, even some where the bounds of legality is set through the judicial system.

The NHL is establishing the limits of permissible circumvention through system arbitration. I don’t see any problems with that process. Granted, I would have preferred an earlier and more frequent contract rejection to establish bounds earlier. The fact that most people use the words “more blatant” in describing Kovalchuk’s contract tells me that Bloch’s decision was correct.

I understand criticism of the CBA, and the reluctance to side with Bettman, but it isn’t a gross miscarriage of justice. Consider that a supposed deity chiseled a pathetic ten-point mankind CBA on stone that could easily be surpassed by a moderately ten-year old girl in less than a hour. It isn’t easy.

Posted by Moq from Denmark on 08/10/10 at 08:29 AM ET

Avatar

The NHL is establishing the limits of permissible circumvention through system arbitration.

... and you’ve just answered the question ‘why is this an idiotic decision?’.

If you want to say that adding years to lower the cap cost is ‘circumvention’... excellent.  All you need to do now is to have protested every contract which employed that obvious omission in the CBA.

Besides, ‘circumvention’ as described in the CBA is not what is happening here.  It’s mitigation.  Teams are offering more years at lower rates to lower the averaged cap hit.  CIrcumvention is providing extra benefits with a perceived monetary value.

Is it ‘circumvention’ when the Wings signed Holmstrom to a 2 year 3.75 million dollar deal instead of to a 1 year contract that would have had a higher cap hit in 2010-11?  Of course not.  It’s idiotic to think so.

That’s the box of stupidity the NHL has once again placed itself in.  Can you extend a contract to 36?  37?  38?  39?  39 and a half?  39 if you are a defenseman, but only 37 if you are a goalie?  Is paying 1 million for a 37 year old defenseman too much?  Too little?  Just right?

Posted by HockeyinHD on 08/10/10 at 08:51 AM ET

Moq's avatar

Besides, ‘circumvention’ as described in the CBA is not what is happening here.  It’s mitigation.  Teams are offering more years at lower rates to lower the averaged cap hit.  CIrcumvention is providing extra benefits with a perceived monetary value.

That’s incorrect. Lowering the cap hit by adding something close to minimum salary years equals circumvention of the team’s upper limit, which is mentioned explicitly in the CBA.

That still leaves a lot of ambiguity in terms of acceptable contract boundaries, but the somewhat tentative lesson is that long contracts should reflect the player’s intention of fulfilling the entire contract, ie. not muddle through the last third at minimum wage. Nonetheless, Bloch identified this contract as distinguishable from other examples and identified four recent contracts as slightly less dramatic but worthy of investigation. Hence it’s possible to implement a non-arbitrary rejection of long-term contracts.

All in all, it’s a satisfactory ruling from my viewpoint.

Posted by Moq from Denmark on 08/10/10 at 10:48 AM ET

Chris in A^2's avatar

You just answered your own “How?” question. There’s a tipping point where exploiting the gray areas become circumvention. It’s somewhat similar to speed limits, at some point you’ll be fined if the speed is continuously increased, and the difference between legality and transgression is negligible. You could probably find several similar examples, even some where the bounds of legality is set through the judicial system.

Except going over he speed limit by any amount is a finable offense, because there are laws that explicitly say it is.  There’s no gray area, its just a matter of how grumpy your local police force is (I do know people that have gotten tickets for 1mph speeding).  There are no such explicit laws in the CBA.  There’s just one vague line about circumventing he CBA, and now apparently that line means that by using tactics explicitly allowed in the CBA (minimum salary, salary drop off , no trade clause and average salary cap hit) it is possible to circumvent the CBA by using the CBA.  Now, I don’t know what a goal is, I don’t know what a penalty is, I don’t know what constitutes a suspendable offense and I don’t know what contracts are allowed by the CBA.  Only the NHL does.

The NHL is establishing the limits of permissible circumvention through system arbitration. I don’t see any problems with that process.

I do.  I’m sick unto death of people using litigation to get there way.  Can’t change your operating rules because you don’t have the authority/support, find an adjudicator that will do that for you.

Posted by Chris in A^2 from Nyquist Puck Control on 08/10/10 at 11:39 AM ET

OlderThanChelios's avatar

There’s a tipping point where exploiting the gray areas become circumvention.

And Moq hits the nail squarely on the head. What person in their right mind believes for one second that Kovalchuk is ever going to play the final six years of his contract for a total of less than $4M. It’s so ridiculous that the league had to do something.

At least it’s within the realm of reason to believe that Zetterberg and Franzen would play the final two years of their contracts (when they’ll be just 38 & 39) for a million dollars a year. But if anyone thinks Kovalchuk would be lacing up his skates (except with his kids at a local ice house) for $550k when he’s 44 years old, they’re beyond delusional.

Posted by OlderThanChelios from Grand Rapids, MI on 08/10/10 at 12:45 PM ET

J.J. from Kansas's avatar

That’s fine and wholly agreed upon, but what’s the tipping point?  I want it written out now.  If his contract went to 40 would it be ok?

Where is that one mile per hour over the speed limit?

Posted by J.J. from Kansas on 08/10/10 at 12:58 PM ET

Avatar

That still leaves a lot of ambiguity in terms of acceptable contract boundaries, but the somewhat tentative lesson is that long contracts should reflect the player’s intention of fulfilling the entire contract, ie. not muddle through the last third at minimum wage.

That makes sense.  It is, however, not the rules of the game.  We can say what things ‘should’ be like… Detroit should be playing in the East, refs should not be horrible, Bettman should not be the Commissioner… but at some point we have to deal with things as they actually are.

Where you and OTC slip into the land of silliness is in the presumption of intent.  I don’t think it’s any more likely that Kovalchuk plays at 41 or 42 as it is that Zetterberg or Franzen or Hossa will be honoring the ends of their deals… because even though they may only be ‘making’ a million or less a year, their cap hit will be 5-6 million bucks.

Really?  The Wings are going to tie up 4-6 mil in cap space to have Z or Franzen be 2nd/3rd line forwards for them?  You think so?

Stop it.

Yes, the Kovalchuk deal pantsed the NHL and makes Gary Bettman look like an idiot that can’t write a CBA.  As it happens, Gary Bettman is an idiot that can’t write a CBA.

Posted by HockeyinHD on 08/10/10 at 01:12 PM ET

J.J. from Kansas's avatar

Posted by HockeyinHD on 08/10/10 at 11:12 AM ET

In ten years, if hockey keeps growing the way the league and players want it to, a $6M cap hit will equal $3.6M of today’s dollars and a $4M cap hit will equal $2.45M (assumes 5% inflation).

Still kind of steep numbers for little better than a 3rd-line player if you’re expecting that’s what they’ll be, but not unheard of.  Detroit currently has a 40-year old on their roster making $6.2M

Posted by J.J. from Kansas on 08/10/10 at 01:30 PM ET

OlderThanChelios's avatar

I don’t think it’s any more likely that Kovalchuk plays at 41 or 42 as it is that Zetterberg or Franzen or Hossa will be honoring the ends of their deals…

So you think it’s just as likely that Kovalchuk will play for $550k when he’s 44 (not 41 or 42) as it is that Hank and Mule will play for $1M when they’re 39? Really? I doubt that even you believe that, HD.

And JJ’s point about “relative” (or is it redolent) cap hits 10 years from now is an excellent one. Hank and Mule have shown their commitment to the Wings and vice versa. What is it about Kovalchuk that indicates he’s interested in anything more than the money. When he gets bored and the money is “pennies” compared to what he’s already made, he’ll walk. And the Devils will have skated through 12 years with an articially low cap hit.

Maybe the problem here isn’t with this ruling. Maybe the problem is that so few people (myself included) have any faith in Lil’ Gary and his crew that it’s hard to believe they could actually make a correct decision now and then. For me, this is one of those exceptionally rare instances when they got it right.

Posted by OlderThanChelios from Grand Rapids, MI on 08/10/10 at 02:03 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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