Kovy decision on Monday

[IPostedWhat]

Yeah, well, Puckhead, I'm a numbers geek

 

[dare2be]

One of my favorite gifs (besides the pr0n ones).

It figures.

 

[dash]

Under Section 26.10(b) of the CBA, the NHL can investigate a possible circumvention even if the player's contract has been "approved and registered". On top of that, Section 26.10(d) provides that there is no time limitation barring an investigation ("There shall be no limitation of time barring the investigation of a Circumvention by the Commissioner).

Okay, Gary, let's put the Hossa contract in front of an arbitrator...:p

 

[dash]

More from James Mirtle...

Bloch also noted that several other long-term contracts are under investigation for circumvention, listing deals given to Vancouver Canucks netminder Roberto Luongo, Boston Bruins centre Marc Savard, Philadelphia Flyers defenceman Chris Pronger and Chicago Blackhawks winger Marian Hossa as raising similar red flags to Kovalchuk’s rejected contract.

“While the contracts have in fact been registered, their structure has not escaped league notice,” the decision reads. “Those players’ contracts are being investigated currently with at least the possibility of a subsequent withdrawal of the registration.”

Several agents contacted Monday were alarmed by the implication of the league going after contracts already in effect.

“I’ve never heard of a contract that had been registered and approved and then having that registration withdrawn,” said one agent, who requested to remain anonymous.

“The league has two months now to go after Savard, Pronger and Luongo [whose contract extensions began July 1. Until they start getting paid, they’ve got two months.”

 

[postmaster]

In my opinion, just about any of these long term deals are made to be circumventing the cap.
Looking at Franzen's Deal, 11 years starting at $5.5M and ending at $1M for a cap hit of $3.954M; Zetterberg 12 years, starting at 7.4M and ending with the last 3 years of $3.35 M then $1M and 1M for a cap hit of 6.083M were both indeed made to circumvent the cap. It might not look as drastic as others, but without a doubt they were made by the Wings organization to circumvent the cap. If it was so much of an issue, it should have been handled after the Hossa signing. At least try to start a rule changing process or something. The fact that it wasn't is a problem.

 

[Destroydacre]

So the NHL is still looking at the contracts they approved? They could void Hossa's deal now after letting him spend the year with Chicago and helping them win a cup? That's pretty ridiculous, but that's the NHL for you. I can't wait until Bettman is gone.

 

[dash]

So the NHL is still looking at the contracts they approved? They could void Hossa's deal now after letting him spend the year with Chicago and helping them win a cup? That's pretty ridiculous, but that's the NHL for you. I can't wait until Bettman is gone.

This type of farce is usually reserved for the CFL, and I am a huge CFL fan...

 

[dash]

Hey Gary, any chance you can void the Kotalik, Staois, and Sarich contracts?!? Thanks in advance.

 

[puckhead]

More from James Mirtle...

Bloch also noted that several other long-term contracts are under investigation for circumvention, listing deals given to Vancouver Canucks netminder Roberto Luongo, Boston Bruins centre Marc Savard, Philadelphia Flyers defenceman Chris Pronger and Chicago Blackhawks winger Marian Hossa as raising similar red flags to Kovalchuk’s rejected contract.

“While the contracts have in fact been registered, their structure has not escaped league notice,” the decision reads. “Those players’ contracts are being investigated currently with at least the possibility of a subsequent withdrawal of the registration.”

Several agents contacted Monday were alarmed by the implication of the league going after contracts already in effect.

“I’ve never heard of a contract that had been registered and approved and then having that registration withdrawn,” said one agent, who requested to remain anonymous.

“The league has two months now to go after Savard, Pronger and Luongo [whose contract extensions began July 1. Until they start getting paid, they’ve got two months.”

so what happens....... they'd all go UFA?
*boom NHLPA, headshot*

 

[DaBoltsNIsles]

so what happens....... they'd all go UFA?
*boom NHLPA, headshot*

If those guys were to become UFA's there would be several teams probably trying to find the cap space for them. Especially PRONGER.

 

[juliansteed]

First of all let me say that I'm not one to jump on the Bettman bashing bandwagon and will occasionally defend him as I see fit. I have also always despised these types of contracts as I felt they made the cap useless, thus costing us a year of hockey for nothing. Oh except now players become UFA's and can jump ship at younger ages.

That being said, I have mixed feelings about all this. In a way I'm happy with the ruling as I think it will benefit the NHL in the long-run, but at the same time I don't think this decision should have been made. If this was the first (not just the most extreme) case of the sort and they disputed it I would have been all for it. But they were playing with fire when they started letting these types of contracts happen years ago. They allowed the NHLPA to take advantage of the vague wording and did nothing about it at the time. Now all of a sudden they are bringing up the vaguely worded clause in the CBA and changing the rules (or at least the interpretation of the rule) as they go. Yes this case is more extreme than the others. I get that, but where is the line drawn and why? Nobody knows because there are no restrictions on the matter defined in the CBA.

Now some will say "Just because they messed up in the past doesn't mean they should continue to make the same mistake". I agree wholeheartedly but not like this. Fix it when its time to negotiate a new CBA. Or at the absolute very least say "Listen guys, we messed up by allowing these types of contracts. This Kovalchuk one was the final straw. Since we didn't make things clear before we are going to allow it, but going forward this is how its going to be......". But don't change things on the fly like this.

I personally think a fair compromise here would have been to let the contract stand but to make it clear that every last penny Kovalchuk ever actually receives will have to count against the cap at some point. So in the likely event that he retires before the end of the contract, they take the difference between money he actually received and the sum of all the cap hits and then divide the difference over the remaining years. Its still "cheating" the cap to some extent because they are getting an advance on their cap space and a cap hit later for X amount of dollars, likely won't be worth as much as a cap hit now for the same amount, but it is still nowhere near as bad as it otherwise would have been.

Regardless of what the outcome was it seems we lost a season of hockey for nothing. One outcome would make the cap somewhat meaningless, while this outcome shows that the current Collective Bargaining Agreement really isn't much of an agreement at all and there are still shades of gray that are going to be disputed. The good news is that either way I think both the NHL and NHLPA would agree they need a more definitive wording for situations like this. But of course their opinions will differ when it comes time to deciding what the more definitive wording will be. This ruling should give the NHL a bit more leverage in getting rid of these contracts once and for all.

 

[ELYEAH82]

First of all let me say that I'm not one to jump on the Bettman bashing bandwagon and will occasionally defend him as I see fit. I have also always despised these types of contracts as I felt they made the cap useless, thus costing us a year of hockey for nothing. Oh except now players become UFA's and can jump ship at younger ages.

That being said, I have mixed feelings about all this. In a way I'm happy with the ruling as I think it will benefit the NHL in the long-run, but at the same time I don't think this decision should have been made. If this was the first (not just the most extreme) case of the sort and they disputed it I would have been all for it. But they were playing with fire when they started letting these types of contracts happen years ago. They allowed the NHLPA to take advantage of the vague wording and did nothing about it at the time. Now all of a sudden they are bringing up the vaguely worded clause in the CBA and changing the rules (or at least the interpretation of the rule) as they go. Yes this case is more extreme than the others. I get that, but where is the line drawn and why? Nobody knows because there are no restrictions on the matter defined in the CBA.

Now some will say "Just because they messed up in the past doesn't mean they should continue to make the same mistake". I agree wholeheartedly but not like this. Fix it when its time to negotiate a new CBA. Or at the absolute very least say "Listen guys, we messed up by allowing these types of contracts. This Kovalchuk one was the final straw. Since we didn't make things clear before we are going to allow it, but going forward this is how its going to be......". But don't change things on the fly like this.

I personally think a fair compromise here would have been to let the contract stand but to make it clear that every last penny Kovalchuk ever actually receives will have to count against the cap at some point. So in the likely event that he retires before the end of the contract, they take the difference between money he actually received and the sum of all the cap hits and then divide the difference over the remaining years. Its still "cheating" the cap to some extent because they are getting an advance on their cap space and a cap hit later for X amount of dollars, likely won't be worth as much as a cap hit now for the same amount, but it is still nowhere near as bad as it otherwise would have been.

Regardless of what the outcome was it seems we lost a season of hockey for nothing. One outcome would make the cap somewhat meaningless, while this outcome shows that the current Collective Bargaining Agreement really isn't much of an agreement at all and there are still shades of gray that are going to be disputed. The good news is that either way I think both the NHL and NHLPA would agree they need a more definitive wording for situations like this. But of course their opinions will differ when it comes time to deciding what the more definitive wording will be. This ruling should give the NHL a bit more leverage in getting rid of these contracts once and for all.

I am pretty sure this is what they said after the Hossa deal, and little good it did.

 

[juliansteed]

I am pretty sure this is what they said after the Hossa deal, and little good it did.

I didn't realize that. I did however use to think this was in fact the rule because when we first started seeing these types of contracts in 2007, thats how I heard 1 sports journalist explain it. I still thought it seemed a bit sketchy, but when I found out last year that he was wrong, I thought it made a lot of sense in comparison to what the rule actually was. Both methods are flawed. Its just that one method is way more flawed. This proposed method doesn't take the time value of money into account. So 2 teams can offer a player the same amount of money over the same length of time, but 1 contract is heavily front loaded and the other is not. The cap perceives both contracts to be equal when in reality they are not and the front loaded contract is obviously worth more. But at least every penny paid out eats some cap space at one point or another, so the cap still has at least some meaning. The current system is a joke and makes the cap completely useless. You can add on years at at the end with very low pay to keep the average down, then have the cap hit be significantly less than what he is paying, then when he never plays the low paying years at the end, the cap space never has to be paid back.

As for the comment "and little good it did". What exactly did they say with Hossa? That this was how it was going to be going forward? Or that this is how we shall compromise this specific case involving Hossa for now since we currently have no properly defined constraints and going forward we will work on a more definitive solution. Those would be 2 completely different approaches with 2 completely different intents. The latter, which is what I was suggesting, would only be a short term solution for the specific case with no intentions of having it be the solution going forward. In which case "little good" is all that would have been expected from it. If this was the case with Hossa then the problem would not have been with this band-aid solution but the fact that the NHL used it but then just left it at that and never followed up to fix the problem permanently.

I highly doubt the stated intent could have been to make this the rule going forward. Otherwise the NHL wouldn't have had much of a case this time around since things would be less vague, and they'd be doing even more changing of the rules (or the interpretations thereof) as they go. That being said, I'm not sure how you could come to the conclusion that it wouldn't have done any good. Just because this Kovalchuk deal was offered? Who's to say that without this change in the rule that the Kovalchuk offer wouldn't have been even more absurd? And who's to say there wouldn't have been more cases of it? And again, the intent wouldn't necessarily be to stop these deals from being offered entirely. If it does stop them then great. If it doesn't, well at least now they will have to pay (at least something) for it in the end. And of course we've yet to see how any of these contracts play out, so it would be too early to judge.