Superstar winger Ilya Kovalchuk is once again an unrestricted free agent.
In what could be a considered a surprising decision, arbiter Richard Bloch has ruled in favor of the NHL in the grievance between it and the NHL Players’ Association regarding Kovalchuk’s contract with the New Jersey Devils.
Several weeks ago the league had rejected a 17-year, $102 million contract Kovalchuk had signed with the Devils, claiming it constituted circumvention of the salary cap. The NHLPA filed a grievance on Kovalchuk’s behalf which led to this ruling.
The league suggested the length of the deal, which would’ve taken Kovalchuk to age 44, indicated neither the player nor the team believed he would play that long to fulfill the terms of the agreement, since any contract signed by a player under 35 can be struck off the team’s salary cap once that player retires.
As for the financial breakdown, the overwhelming bulk of the money ($95 million) would’ve been paid in the first 10 years, meaning Kovalchuk would’ve only been paid $7 million in the final seven years, thus ensuring a lower average salary cap hit of just over $6.3 million per season.
While it’s been common practice during the current collective bargaining agreement for teams to sign players to similar contracts, this particular one stretched the limits of acceptance for the league, and for the arbiter.
In his decision (obtained by FOXSports.com), Bloch noted the length of the contract, while the longest in league history, wasn’t the issue but rather the fact it would take Kovalchuk to his 44th birthday. He points out it’s not impossible for Kovalchuk to still be playing at that age but it is "markedly rare" for players to continue their active careers at that stage.
Bloch also noted the final six years of the contract, where the salary dovetails significantly, was also a factor. He wrote in those final six years there is little reason for the team or the player to continue their relationship since 97 percent of the salary would’ve been paid out by Year 11.
The arbiter also noted Kovalchuk’s "no movement" clause was downgraded to "no-trade" in those final years, thus giving the Devils flexibility to demote him to the minors,which would beg the question why the player would accept such repositioning as an alternative to seeking employment outside the NHL (such as overseas in a European league) or simply retiring, either of which would relieve the Devils of any further salary cap hit.
The move now means Kovalchuk faces an uncertain future.
His agent can meet again with Devils management and attempt to hammer out another deal which would be more to the league’s liking.
New Jersey Devils general manager Lou Lamoriello released a statement addressing the arbiter’s decision, in which he noted contract talks with Kovalchuk have resumed and he’s hopeful of reaching agreement on a contract which will meet with the principles of the arbiter’s decision as well as the approval of the league.
Kovalchuk can also field offers from other teams. The Los Angeles Kings were the other serious suitor prior to his signing with the Devils but it remains to be seen if they’ll get back into the bidding, or if he’ll even consider other offers at this point.
The New York Islanders and New York Rangers were also rumored to be interested but they apparently never made any serious inquiries and might not bother this time around.
Russia’s Kontinental Hockey League also remains a possible destination for Kovalchuk but it’s believed he prefers to remain in the NHL.
It also remains to be seen what impact this ruling will have upon any future attempts by teams to sign players to long-term, front-loaded contracts.
The ruling certainly doesn’t close the current loophole in the CBA which allows those contracts so there’s really nothing to prevent general managers from trying this again between now and when the current agreement expires in 2012.
What it does mean, however, is the league has finally and successfully drawn a line in the sand over what they will tolerate, meaning teams will likely look to the contracts signed by Vancouver Roberto Luongo, Tampa Bay’s Vincent Lecavalier, Chicago’s Marian Hossa and Detroit’s Henrik Zetterberg — deals of 10-12 years in length — as comparables in any future signings of this nature.
One has to wonder if the league, armed with this victory, might attempt to revisit those aforementioned deals. Given the complications which could arise, including the fact some of those players have already played at least one season under those contracts, probably not.
This also sends a clear message the league fully intends on trying to close that loophole in hopes of preventing similar contracts in the next CBA, which might become a contentious issue for the NHLPA.