Kovalchuk's deal rejected by NHL

[JD]

The NHL has rejected Ilya Kovalchuk's 17-year, $102 million contract with the New Jersey Devils on the grounds that it circumvents the NHL's salary cap.

Details to follow…

http://www.tsn.ca/nhl/story/?id=328025

[Ebenezer]

I perceive a major internal argument...lawsuit?

[DraftBoy]

A long term legal battle could ensue over this...how could this hurt/help the NHL? Is there a 'win' situation?

[rbochan]

Oh the drama...

[SabreEleven]

Did Bettman actually have one of his balls drop?

[RockStar36]

Honestly, it's about time they rejected one of these deals. Sucks for NJ that it happened to them though seeing all the others that got away with it.

[DMBcrew36]

Is the NHLs beef that NJ scheduled it so he only get $6 mill in the first two years, before getting $11 for a bunch of years after that?

[RockStar36]

Is the NHLs beef that NJ scheduled it so he only get $6 mill in the first two years, before getting $11 for a bunch of years after that?

No, the beef is that he would be getting 550,000 for the final handful of years when he wouldn't be playing.

He's getting his money up front, but by stretching out the deal they are lowering the cap hit which is circumventing the rules in a roundabout way.

[trapezeus]

and the issue also becomes, big city teams can afford to have a cash payment like that and miss. while the sabres of the NHL could never do that. And NJ is getting incredibly cap relief.

They can afford to pay out $11MM in cash for one player, which should technically be like 1/5th of a team's payroll, but the cap strucure would make it only 1/10th.

If the NHL lets the deal go through, watch all the big teams scrape up the big names. Watch all the work that we sacrificed by enduring a lockout get thrown out in like 2 years. by the 2012 CBA expiration, owners would be angry all over again.

[RockStar36]

and the issue also becomes, big city teams can afford to have a cash payment like that and miss. while the sabres of the NHL could never do that. And NJ is getting incredibly cap relief.

They can afford to pay out $11MM in cash for one player, which should technically be like 1/5th of a team's payroll, but the cap strucure would make it only 1/10th.

If the NHL lets the deal go through, watch all the big teams scrape up the big names. Watch all the work that we sacrificed by enduring a lockout get thrown out in like 2 years. by the 2012 CBA expiration, owners would be angry all over again.

Granted the NHL rejected this one, but Chicago did a similar thing with Hossa and Philly with Pronger and the NHL let those contracts slide.

NJ took it a little too far with the 17 year portion which I think was the final straw for the NHL.

[trapezeus]

agreed. i think the NHL was ok to a degree with a team saddling itself with a long contract, but the 6 extra years of minimum payment did not seem to sit well with them. that was a totaly slap in the face and way too transparent. $98mm of the $102mm came in the first 11 years.

[SkateZilla]

because he's what? 27 already, 17 year contract means he'll be playing till he's 44/45 yrs old. i know and you know that wont happen, they took what was supposed to be a 6/7 year deal and streatched it to 17 years to drop the cap hit of his yearly salary, knowing full well he wont play those last years. and NJ will buy out his contract after year 12 or 13.

the NHL is seeing it as Salary Cap Manipulation, because NJ made the contract longer to lower the Avg/Per Year Cap hit, and then halfway to two-thrids of the way through the contract they can buy him out.

[RockStar36]

because he's what? 27 already, 17 year contract means he'll be playing till he's 44/45 yrs old. i know and you know that wont happen, they took what was supposed to be a 6/7 year deal and streatched it to 17 years to drop the cap hit of his yearly salary, knowing full well he wont play those last years. and NJ will buy out his contract after year 12 or 13.

the NHL is seeing it as Salary Cap Manipulation, because NJ made the contract longer to lower the Avg/Per Year Cap hit, and then halfway to two-thrids of the way through the contract they can buy him out.

No buy out.

He would just retire and it comes off the books.

[trapezeus]

why would you willingly let the team off the hook if they still owe you the money. i think you force them to buy you out. unless you had a great run of cup after cup and love the area and are going into management, you'd ask for the free $1.5-2mm for doing nothing.

[SabreEleven]

He can either retire or the Devils can buy him out of the contract for $5 mil.

[RockStar36]

why would you willingly let the team off the hook if they still owe you the money. i think you force them to buy you out. unless you had a great run of cup after cup and love the area and are going into management, you'd ask for the free $1.5-2mm for doing nothing.

By that time he would have received his 98 or so million dollars. That's the point of the contract.

If he retires, it wipes off the books.

I know what you're saying, but the contract wasn't written up to buy him out.

[chernobylwraiths]

By that time he would have received his 98 or so million dollars. That's the point of the contract.

If he retires, it wipes off the books.

I know what you're saying, but the contract wasn't written up to buy him out.

Even though he has received all that money, greedy people won't leave that much money on the table. All he has to do is say he wants to come back for another season and they would almost have to buy him out. Otherwise, his cap hit would count.

[RockStar36]

Even though he has received all that money, greedy people won't leave that much money on the table. All he has to do is say he wants to come back for another season and they would almost have to buy him out. Otherwise, his cap hit would count.

I suppose.

It was my understanding that deals like this involved a little bit of secret handshakes where the player agrees to retire to let them off the hook, in return they are getting larger sums of money per year.

[trapezeus]

right, rockstar. i'm just saying, if i'm kovalchuk, i've made it through the 98mm, and there is either an option to retire and collect nothing, or get bought up for a couple million dollars, unless i felt like the team surrounded me with talent, got me a cup as much as i got them the cup, and that they wanted me around in a good will capacity over several years, i'd probably force them to pay that money to me.

but thats me.

[don137]

By that time he would have received his 98 or so million dollars. That's the point of the contract.

If he retires, it wipes off the books.

.

I think that is where the problem lies in the system. They should make it where if a player retires or is cut then there is a cap hit for the difference in what was paid to the player and what has gone against the cap so far. So if Kovalchuk avarage hit is 6MM per year but he retires in 8 years so 48MM has been hit against the cap but the team has already paid out say 80MM in salary to him then the year he retires the Devils are hit with a 32MM cap hit.

[chernobylwraiths]

The problem to me is that they should go more to what the NFL does and count year to year salaries for cap hits. Then they could allow "signing bonuses" to affect the year to year salaries more.

Where I think the NFL gets it wrong is that they aren't guaranteed contracts.

I agree with one thing don said though, contracts like this should be on the team's cap if a player retires (unless because of injury). Signing a player till their fifty only to have them retire when their forty to get around the yearly cap is very dishonest.

[SkateZilla]

you think they'll reject our 15 year deal for Myers? lol

[DMBcrew36]

you think they'll reject our 15 year deal for Myers? lol

I doubt Regier would ever imploy such gimmicks to invite rejection, nor do I believe we have to pay Myers the absurd amounts that are associated with such contracts (assuming we lock him up sooner than later).