A Quick Note on Common Sense

It’s not every day that I can honestly say that I agree with Gary Bettman and the NHL. Upon rejection of Ilya Kovalchuk’s 17-year $102 million deal with the New Jersey Devils the league cited “circumvention of the salary cap” as its reasoning, as vague and indeterminable as that phrase is as it relates to the collective bargaining agreement. For myself and fellow cynics, a simple argument on the grounds of common sense would have been sufficient, although, we all know that wouldn’t hold up in Bettman’s “kangaroo court”.

Agreeing with the notion that the proposed Kovalchuk contract was absurd and that it warranted a ruling of null and void doesn’t mean that I’m in favour of the looming fallout.  Not at all in fact; I wish it never came to this.  Had Kovalchuk signed an equally lucrative contract with fewer years on it we’d still scrutinize it, but he, his agent Jay Grossman, and the Devils just had to blow the CBA out of the water in what will only compound impending labour negotiations.

Many pundits were quick to cite the lengthy contracts of Duncan Keith, Marian Hossa, Vincent Lecavalier, Roberto Luongo, Henrik Zetterberg, et al as reasonable grounds for a ruling in favour of Kovalchuk and the Devils. It simply wasn’t so, and now those somewhat similar “retirement” contracts face the possibility of “withdrawal” as James Mirtle has detailed at length based on Bloch’s ruling.

Our own Jonathan Willis previously outlined the factors that made Kovalchuk’s deal incomparable to those belonging to other superstars.  Fundamentally, the “fake years” tacked on to the end of Kovy’s contract were the difference-maker.  On that point, sure, we all knew that Hossa, Pronger, Luongo, Zetterberg, etc. were signing contracts that would carry them to retirement, but there was – at least on some level – an effort to mask that poorly hidden reality.  A front-loaded deal is a front-loaded deal, but a more equitable dispersion of dollars versus years may have helped the Devils and Kovalchuk escape the selective long arm of Bettman’s law.

The NHL looks bad and the Devils look burned.  Should Bettman and co. have stepped in two or three years ago when these monstrous deals first started appearing?  Probably, but they didn’t.  It’s not going to be a case of too little too late so much as it is one giant clusterfuck that preps the grounds for Armageddon 2012.  Other deals are being looked at on the heels of Monday’s Kovalchuk ruling, and if the NHL opts for the withdrawal method then things could get messier than we could have ever imagined.

Comments (7)

  1. The NHL and CBA should add one simple rule. Any contract that takes you past the age of 40 is a retirement contract and the entire amount will count against the cap. That allows teams to give out the long term contracts and keep the cap number lower. It just means that they then are stuck with the cap number for the entire term of the contract regardless if the player plays it out or not. You win with the lower average number but lose by possibly paying out the number for years after the player is no longer with you.

  2. I think Doug’s proposal makes a lot of sense, but probably too much sense for it to be implemented into the CBA, lol.

    The real problem that I think emerges from this Pandora’s Box opened by the Kovalchuk ruling is where do you draw the line? Is Pronger’s deal ok? What about Savard’s? What about Hossa, he’s already been paid under the first year of his mega deal? Everyone mentions these cases, as well as Luongo’s, but let’s not forget that both Datsyuk and Zetterberg are signed to similar front-loaded deals with the Red Wings, will Bettman dare criticize the managerial prowess of Ken Holland? If a deal by Lamoriello gets thrown out I say that no one’s safe… “Clusterfuck” could end up being an understatement by the time this is all done… Hell, if all the deals get thrown out, TSN will have to hold another insufferable “Free Agent Frenzy” special in September once these guys are all UFA’s again.

  3. The reason the NHL did it this way, as opposed to challenging every deal, was that they needed a precedent decision. There were no guarantees that they’d get one from any of the earlier contracts, but this one, apparently, was enough that they were sure that they’d get a favourable ruling.

    That’s very important from a legal perspective; if the precedent decision had gone the other way on one of the earlier contracts, the Kovy deal would probably have been approved for “not being that much worse.”

    I personally think they’re just throwing “investigation” around as a way to cow teams to never do this type of thing again (EG, the Kings impending negotiations with Doughty – or, hell, if they take another shot at Kovy). Kicking around a bad deal is one thing, but teams have been built on the expectations that the contracts handed out in past years were legitimate.

    Although it would be kinda funny seeing Vancouver trying to get a cap-eating Luongo under their ceiling right around now….

  4. Doug-

    At face value your idea makes a lot of sense… but don’t you see the potential loopholes to that one already?

    Say I’m the New Jersey Devils and I sign Kovalchuk to this 102M, 17 years deal. Because it takes him past 40, his cap hit will remain for the length of the contract, even if he retires.
    When Kovalchuk is 37, he comes to me and says he’s considering retirement now, he’s not as effective or whatever… Hold on Kovy, let me trade you to the Nashville Predators, they will just LOVE to have you 6M cap hit without spending a dime in salary. Just retire with them and we’re all set!
    Some teams, where owners are really tight on cash and where they might want to cut corners to save a few millions, might even GIVE a draft pick in return for such a contract… guaranteed cap hit at no real cost? I’m certain some teams would gladly take that on.

    In fact, that’s probably what we’ll see happen with Pronger once his good years are behind and when he gets into the ‘cheap’ years of his contract.

  5. To me, the solution is simple:

    Make the yearly salary equal throughout the contract, and that value is equal to total contract value divided by number of years. A 36M contract on 6 years = 6M salary and 6M cap hit. That’s it.
    No cap circumvention, no trading cap space or cap hit, much much less escrow complications. Clean and simple. Won’t happen, of course.

  6. i think this is all dump thanks to the cap system. what the league think was going to happen when players realized they weren;t going to make as much money every year of course their going to ask for long term deals. because they want the most money they can get. its that simple. so just do what the nfl did. that structure seems to work. and its why the nba looking at it.

  7. “so just do what the nfl did. that structure seems to work. and its why the nba looking at it.”

    The reason the NFL structure works – and I question that it does given that Sam Bradford is going to be making more guaranteed money than just about anyone this year – is that the contracts aren’t guaranteed.

    You’ll see the NBA or NHL PA scuttle a season rather than accept non-guaranteed contracts.

    (Well, maybe not the NBAPA because they’re all impulse spenders living check-to-check, but you know what I mean)

    There’s nothing WRONG with a long-term deal, the issue is that the amortization of dollars across the contract means that teams are taking smaller cap hits than they should (which, incidentally, is the NFL system as well – ten minutes in Madden Dynasty mode teaches you that). The solution is simply to either move to a non-amortized, NBA-esque system, or find a compromise that allows for some long-term leverage (cap value = 30% amortized plus 70% of the yearly cap hit?)

    We WANT teams to sign players long term. The NBA recognised that first via the Bird exemption system.

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