Devil of a Signing...

[darksabre]

does anyone else see the irony IRONY of PA grilling someone on thinking they know better than an Owner and a GM?

 

Yes.

[gregkash]

Apparently not.

 

You're busted.

 

Apparently so.

 

You're busted.

 

wtf does that even mean.

[Two or less]

NHL rejects Kovy deal.

 

Sportsnet in Canada just had it as breaking news.

[McJeff215]

NHL rejects Kovy deal.

 

Sportsnet in Canada just had it as breaking news.

 

Yeah, saw that. Half of me likes a 17 year monstrosity getting kicked down. Half of me hates to see the league do that. The third half is just f&$*ing sick of Kovy altogether. Edit... half number four is willing to bet 100 rubles that he winds up over in the KHL after this.

[darksabre]

Looks like I'm not the only one who thinks this deal is absurd.

[deluca67]

NHL rejects Kovy deal.

 

Sportsnet in Canada just had it as breaking news.

Any chance they will look at and rescind the Pominville contract. :thumbsup:

[gregkash]

this is awesome. Kovalchuk just finished saying it's not about the money. What does he do now when the devils can't offer him an insane contract.

[shrader]

They actually go something right. Congratulations NHL. I have some faith in you again.

[Mbossy]

Wait. The NHL actually has cajones? I, along with many others were waiting for this. What's the odds the NHLPA files a grievance?

 

I say leave the contract that'll ###### the Devils over long term as long as they accept a 8 million salary cap figure.

 

Should've been stopped at Hossa deal.

 

Then again, are the NHL being busted at their own game or are the NHLPA to blame? Where's the slacker incentive?

[static70]

The NHL will lose this on appeal. They have no proof Kovy won't play until he is 44, that is mere speculation at this point.

 

But, the CBA can be amended if the owners and NHLPA universily agree or the new CBA could lead to a another lock out, which will not happen. Players can ill afford another lock out. The owners are in control for the most part now. They will close this loophole and there is absolutely nothing the players can do about it.

[nfreeman]

Surprising, but a very good move by the NHL. If the cap is to have any meaning, this was a contract that needed to be voided. Otherwise, as I tried to post earlier, NJ would've gotten an elite player for a 33% lower cap hit than what the real salary would otherwise dictate (this contract is really 11 years for $98.5MM, or for that matter 10 years for $95MM, so the cap hit "should" be $9MM to $9.5MM, not $6MM). There also would've been nothing to prevent a 30-year contract with even more whacked-out terms.

 

What happens next should be interesting too. I don't think the NHL can just start issuing guidelines about what kind of contracts are OK and what aren't -- that needs to be negotiated with the NHLPA. And how much more of a cap hit will the NHL make NJ take? Will $7MM per year be OK? Will it need to be $8MM? At that kind of cap hit, does NJ want Kovy? Does LA re-enter the bidding? Is it going to get tied up for weeks in litigation?

 

Lots of possibilities. I wonder if any of them will end up with the Sabres getting a forward.

[jpgr909]

What's the odds the NHLPA files a grievance?

Same as the odds Lindsay Lohan will again taste alcohol. In other words, pretty much guaranteed.

 

They'll file a grievance and point to past contracts that were allowed to stand, like Pronger and Hossa, and say, "Whuhhh? We fully expect Ilya to be donning a Devils jersey in 2025 at the age of 42, playing for $750k. Look at Bill Guerin and Mark Rechhi. Heck, look at Chris Chelios! It's legit, man! It's legit!"

 

TSN put up a good portion of the CBA that discusses good faith negotiations in light of the salary cap. The NHL had seemingly legit cases with the previous contracts, and still lost, but this one just screams nonsense. I guess it goes to an arbitrator now. Boy would I love to hear the arguments made by the NHLPA/NJD.

[shrader]

The NHL will lose this on appeal. They have no proof Kovy won't play until he is 44, that is mere speculation at this point.

 

But, the CBA can be amended if the owners and NHLPA universily agree or the new CBA could lead to a another lock out, which will not happen. Players can ill afford another lock out. The owners are in control for the most part now. They will close this loophole and there is absolutely nothing the players can do about it.

 

Unfortunately, common sense has no place in a legal hearing. I'd love to be there in that room when both Kovalchuk and the Devils put on a straight face and say they completely believe that he'll still be playing at 44. That's pure comedy gold right there. If that really was the case, why would Kovalchuk want to play for half a million (or whatever that contract number is at that point)? ######, by that point, the league minimum may be above that number.

[static70]

If the System Arbitrator accepts that it looks like a cap circumvention on the face of the contract the onus of proof shifts to the Club and/or player to provide a reasonable explanation why the contract was structured in such a way. A System Arbitrator has a very wide discretion to determine what constitutes a circumvention per the CBA after receiving the report from the Investigator (in this case the Commissioner or his delegate).

 

 

Given the broad definition of a cap circumvention this is not as cut and dried as you seem to think. A Circumvention is very broadly defined and catches both the Club (and Club Actors) and Players (and Player Actors). Note the use of the words "intent" and "intention". Also note the "I am just an idiot player" defence does not work nor does "it was all my agent who did this" since the player is deemed to not be an idiot and is responsible for everything his agent does.

 

26.3 Circumventions.

 

(a) No Club or Club Actor, directly or indirectly, may:

 

(i) enter into any agreements, promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind, whether express, implied, oral or written, including without limitation, any SPC, Qualifying Offer, Offer Sheet or other transaction, or (ii) take or fail to take any action whatsoever, if either (i) or (ii) is intended to or has the effect of defeating or Circumventing the provisions of this Agreement or the intention of the parties as reflected by the provisions of this Agreement, including without limitation, provisions with respect to the financial and other reporting obligations of the Clubs and the League, Team Payroll Range, Player Compensation Cost Redistribution System, the Entry Level System and/or Free Agency.

 

(i) Any act by a Club Actor that, if committed by the Club would constitute a Circumvention, shall be imputed to the Club and shall be deemed to be a Circumvention by the Club.

( b) No Player or Player Actor, directly or indirectly, may: (i) enter into any agreements, promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind, whether express, implied, oral or written, including without limitation, any SPC, Qualifying Offer, Offer Sheet or other transaction, or (ii) take or fail to take any action whatsoever, if the Player knows or reasonably should have known (measured by the objective standard of the "reasonable Player under the circumstances") that either (i) or (ii) is intended to and has the effect of defeating or Circumventing the provisions of this Agreement or the intention of the parties as reflected by the provisions of this Agreement, including without limitation, provisions with respect to the Team Payroll Range, the Entry Level System and/or Free Agency.

 

( c) Such knowledge or knowledge imputed under Section 26.3©(i) of a Player applies to all references to Players set forth in Sections 26.1, 26.3 and 26.5, i.e., a Player has not engaged in a circumvention unless the Player knew or reasonably should have known that the conduct at issue was intended to have and did have the effect of defeating or Circumventing the provisions of this Agreement or the intention of the parties as reflected by the provisions of this Agreement, including without limitation, provisions with respect to the Team Payroll Range, the Entry Level System, and/or Free Agency.

 

(i) Any act by a Player Actor that, if committed by the Player would constitute a Circumvention, shall be imputed to the Player and shall be deemed to be a Circumvention by the Player.

 

26.13 ( b) The System Arbitrator may find a Circumvention has occurred based on direct or circumstantial evidence, including without limitation, evidence that an SPC or any provision of an SPC cannot reasonably be explained in the absence of conduct prohibited by this Article 26. The investigation and findings of the Investigator pursuant to Section 26.10 shall be fully admissible in any proceeding before the System Arbitrator under this Section 26.13.

 

The circumstantial evidence most definitely is going to be that 2 players have retired at or past the age of 44 in the past 50 years. Chelios may be only the 3rd to do so. The evidence, although circumstantial is so overwhelming in favor of this decision by the NHL that it is most definitely going to alter or change or negate completely this contract.

[jpgr909]

The NHL will lose this on appeal. They have no proof Kovy won't play until he is 44, that is mere speculation at this point.

Based on previous cases, I'd bet Ilya's Year 16 money that the NJD were trying to see just how far they could push the envelope. And based on those past cases, you'll probably be correct, but at some point, in light of that good faith clause, you have to draw a line. We all know this is a clear manipulation of the cap rules, but can they prove it? They have a shot, but if they can't, this doesn't bode well for 2012. Some guy named Fehr is licking his chops right now. Hopefully that's just paranoia talking.

[shrader]

Same as the odds Lindsay Lohan will again taste alcohol. In other words, pretty much guaranteed.

 

They'll file a grievance and point to past contracts that were allowed to stand, like Pronger and Hossa, and say, "Whuhhh? We fully expect Ilya to be donning a Devils jersey in 2025 at the age of 42, playing for $750k. Look at Bill Guerin and Mark Rechhi. Heck, look at Chris Chelios! It's legit, man! It's legit!"

 

TSN put up a good portion of the CBA that discusses good faith negotiations in light of the salary cap. The NHL had seemingly legit cases with the previous contracts, and still lost, but this one just screams nonsense. I guess it goes to an arbitrator now. Boy would I love to hear the arguments made by the NHLPA/NJD.

 

The Pronger deal is a bad example though since that's a 35+ deal. If he retires, it still counts against the cap. I guess there's the buyout option, but I'm not sure on the wording of the CBA as to whether that is possible or if it would still count to the cap or not.

[Taro T]

They actually go something right. Congratulations NHL. I have some faith in you again.

The only problem is that the league hasn't stood up to these contracts in the past and as such it will be very difficult to "prove" that the contract is circumventing the cap (which it clearly is).

 

I expect the Devils will resubmit the contract &/or the PA will bring a grievance. I'd be surprised if an arbitrator rules in the league's favor but hope that he/she does.

 

The weird thing is, if the PA does bring a grievance and win; they'll primarily be hurting the bulk of their membership. The players get their exact %age of revenue that is spelled out in the CBA and it gets divvied up according to the relative $'s each player is due. So regardless of what the final paper value of the players' contracts are, the players will receive x% (at current revenue levels, x being 57) of total league revenues. And those $'s get split according to what the nominal value of each deal is - a $10MM contract brings in exactly 5 times what a $2MM contract would bring. Whether it's really $2MM-$10MM, $1.8MM-$9MM, $2.2MM-$11MM, or whatever the final #'s tally; Kovy will get 5 times whatever David Clarkson brings home.

 

And if Kovy really only took home $6MM this year, like his cap hit says he will, rather than the ~$10MM he'll actually take home; there would nominally $4MM more to be spread around throughout all the players. On average, all the other players (except Kovy) in the league would have had an extra $5k in their pockets after the escrow checks cleared.

[Taro T]

If the System Arbitrator accepts that it looks like a cap circumvention on the face of the contract the onus of proof shifts to the Club and/or player to provide a reasonable explanation why the contract was structured in such a way. A System Arbitrator has a very wide discretion to determine what constitutes a circumvention per the CBA after receiving the report from the Investigator (in this case the Commissioner or his delegate).

 

 

Given the broad definition of a cap circumvention this is not as cut and dried as you seem to think. A Circumvention is very broadly defined and catches both the Club (and Club Actors) and Players (and Player Actors). Note the use of the words "intent" and "intention". Also note the "I am just an idiot player" defence does not work nor does "it was all my agent who did this" since the player is deemed to not be an idiot and is responsible for everything his agent does.

 

26.3 Circumventions.

 

(a) No Club or Club Actor, directly or indirectly, may:

 

(i) enter into any agreements, promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind, whether express, implied, oral or written, including without limitation, any SPC, Qualifying Offer, Offer Sheet or other transaction, or (ii) take or fail to take any action whatsoever, if either (i) or (ii) is intended to or has the effect of defeating or Circumventing the provisions of this Agreement or the intention of the parties as reflected by the provisions of this Agreement, including without limitation, provisions with respect to the financial and other reporting obligations of the Clubs and the League, Team Payroll Range, Player Compensation Cost Redistribution System, the Entry Level System and/or Free Agency.

 

(i) Any act by a Club Actor that, if committed by the Club would constitute a Circumvention, shall be imputed to the Club and shall be deemed to be a Circumvention by the Club.

( b) No Player or Player Actor, directly or indirectly, may: (i) enter into any agreements, promises, undertakings, representations, commitments, inducements, assurances of intent, or understandings of any kind, whether express, implied, oral or written, including without limitation, any SPC, Qualifying Offer, Offer Sheet or other transaction, or (ii) take or fail to take any action whatsoever, if the Player knows or reasonably should have known (measured by the objective standard of the "reasonable Player under the circumstances") that either (i) or (ii) is intended to and has the effect of defeating or Circumventing the provisions of this Agreement or the intention of the parties as reflected by the provisions of this Agreement, including without limitation, provisions with respect to the Team Payroll Range, the Entry Level System and/or Free Agency.

 

( c) Such knowledge or knowledge imputed under Section 26.3©(i) of a Player applies to all references to Players set forth in Sections 26.1, 26.3 and 26.5, i.e., a Player has not engaged in a circumvention unless the Player knew or reasonably should have known that the conduct at issue was intended to have and did have the effect of defeating or Circumventing the provisions of this Agreement or the intention of the parties as reflected by the provisions of this Agreement, including without limitation, provisions with respect to the Team Payroll Range, the Entry Level System, and/or Free Agency.

 

(i) Any act by a Player Actor that, if committed by the Player would constitute a Circumvention, shall be imputed to the Player and shall be deemed to be a Circumvention by the Player.

 

26.13 ( b) The System Arbitrator may find a Circumvention has occurred based on direct or circumstantial evidence, including without limitation, evidence that an SPC or any provision of an SPC cannot reasonably be explained in the absence of conduct prohibited by this Article 26. The investigation and findings of the Investigator pursuant to Section 26.10 shall be fully admissible in any proceeding before the System Arbitrator under this Section 26.13.

 

The circumstantial evidence most definitely is going to be that 2 players have retired at or past the age of 44 in the past 50 years. Chelios may be only the 3rd to do so. The evidence, although circumstantial is so overwhelming in favor of this decision by the NHL that it is most definitely going to alter or change or negate completely this contract.

There may be very few players that make it to age 44, but several do make it to 40. It would be tough to win the argument that there is NO possibility of him making it to the end of the deal. There is the possibility that he could get there; and the possibility of him getting close to there is very real. If he makes it to age 42, there is all of $10MM in salary that wouldn't have been recaptured under the cap in the 1st 15 years of the deal. Which, although it would be $5MM in each of those last 2 years; it would only be $667k averaged out over the 1st 15 years. Which doesn't look nearly as foreboding as the $3-4MM/yr in cap space they are freeing up in the early years.

 

That the team would expect Kovalchuk's skills to have degraded by the time he is hitting his golden years, if anything would go into providing circumstantial evidence of why the contract SHOULD be allowed. Guys signing deals in their late 30's & 40's are getting deals for ~$1MM. They'll plot out a graph of what his expected production is by age, and compare that to common salaries of players by age and production level; and each particular year individually won't look out of whack. Unfortunately.

 

And lastly, remember that the arbitrator is somebody that is chosen to be acceptable to both the NHLPA and the NHL. Each chooses 1/2 of the arbitrators, and the other has to agree to them. I'm not certain how these arbitrators are assigned, but I wouldn't be at all surprised to find out it's one that sees things the Devils and the union's way. The union helps choose the arbitrators and so most likely does Lamiorello as he sits on pretty much all the important committees. If you have a nice, cushy job as an arbitrator; are you going to guarantee that the PA punts your butt?

 

There are, unfortunately, several legitimate reasons for why this contract is set up the way it is. Although you see overwhelming circumstantial evidence that there are absolutely no legitimate reasons, there are several as to why the arbitrator would say that there are legitimate reasons.

 

Now, by no means is it a foregone conclusion that the PA will take this to arbitration (as explained in my previous post, most players in the league get hurt by this contract), but I fully expect them to do so.

 

At present time, the case for circumvention isn't slam bang. BUT at the other end, if Kovy conveniently gets injured and retires or just flat out gets tired of the game and retires in 10 years; THEN you have a pretty strong case for circumvention. At that time, you might actually be able to make the charge stick.

[wjag]

Whether or not the league wins or loses the ruling, the league loses. This is George Steinbrenner all over. This drives up the price for the next superstar. This kind of salary increase, kills the league. Baseball can more afford it, basketball too. The NFL knows they can demand a high price and the networks, especially the one on the outside will pay the fee to get back in. But the poor NHL who pays NBC nothing or next to nothing to televise a handful of games over the course of a season, can't. When Lou comes out and admits its bad for hockey, but does it anyway, I have to wonder what future this league can have.

[That Aud Smell]

This drives up the price for the next superstar. ... Baseball can more afford it, basketball too.

the nba is in far worse shape than the nhl, as recently explained here. which is why bettman's former boss was willing to sell the nets to a russian oil oligarch who makes mark cuban look restrained and subdued.

[Taro T]

Whether or not the league wins or loses the ruling, the league loses. This is George Steinbrenner all over. This drives up the price for the next superstar. This kind of salary increase, kills the league. Baseball can more afford it, basketball too. The NFL knows they can demand a high price and the networks, especially the one on the outside will pay the fee to get back in. But the poor NHL who pays NBC nothing or next to nothing to televise a handful of games over the course of a season, can't. When Lou comes out and admits its bad for hockey, but does it anyway, I have to wonder what future this league can have.

I agree that this contract is bad for the league, but it isn't Steinbrennerian simply because the total player costs leaguewide in any particular year are a fixed percentage of total revenue. This contract actually drops player costs (by ~$5k per player) throughout the rest of the league. These sort of contracts, on paper, most likely put player salary over the 57% of league revenues that they are set to be; but when the escrow adjustments are made, they will be back at 57%.

 

It does modestly affect the competitive balance w/in the league as now the gap between what the biggest spenders and the lowest spenders actually spend becomes larger. But we still aren't anywhere close to where we were prelockout. And this doesn't signal the end of the league as the league can and most likely will renegotiate a new agreement in 2 years.

 

And as an aside, it is no real surprise that Lou is the one pushing the envelope to this extent. He helped negotiate the CBA, he knows it as well or better than any of the other GM's, and he's pushed the threshold of what's allowed in the past (sending Mogilny and other vets to AHL; stretching LTIR).

[shrader]

The only problem is that the league hasn't stood up to these contracts in the past and as such it will be very difficult to "prove" that the contract is circumventing the cap (which it clearly is).

 

There really haven't been all that many contracts along these lines for the NHL to go after. Hossa is pretty much the same thing, but he'll be a few years younger when it expires. Still obvious, but the defense for a deal ending when a guy is 41 is a little easier than 44. The Pronger deal, I think, is a very different situation since he's already that much older than guys like Hossa and Kovalchuk. He stands a better chance of reaching the end of that deal since he's relatively close to that point already. That and Philly shot themselves in the foot by unsuccessfully trying to jump around the over 35 rule.

 

I think those are the only real examples. I'm not aware of any other longterm deals around the league that take a guy into his 40s. If I remember correctly, they blocked the original deal that Briere signed with Philly and forced a restructure there. So if that's correct, they have stood up in the past. There just hasn't been all that many opportunities to. As the TSN story states, they heavily considered it in the past, but I guess the deals toed the line just enough to make it. This one clearly jumped over that edge.

 

I expect the Devils will resubmit the contract &/or the PA will bring a grievance. I'd be surprised if an arbitrator rules in the league's favor but hope that he/she does.

 

You're probably right here, but like I said earlier, I'd love to be in that room when the Devils/Kovalchuk try to defend it. I don't think I'd stop laughing the entire time. Unfortunately, common sense isn't a valid legal defense for the NHL here or else they'd win in a landslide.

[nfreeman]

I wonder whether Bettman realizes he's staring at major jail time for RICO violations yet again?

 

I'm still annoyed about that string of BS posts.

[static70]

There may be very few players that make it to age 44, but several do make it to 40. It would be tough to win the argument that there is NO possibility of him making it to the end of the deal. There is the possibility that he could get there; and the possibility of him getting close to there is very real. If he makes it to age 42, there is all of $10MM in salary that wouldn't have been recaptured under the cap in the 1st 15 years of the deal. Which, although it would be $5MM in each of those last 2 years; it would only be $667k averaged out over the 1st 15 years. Which doesn't look nearly as foreboding as the $3-4MM/yr in cap space they are freeing up in the early years.

 

That the team would expect Kovalchuk's skills to have degraded by the time he is hitting his golden years, if anything would go into providing circumstantial evidence of why the contract SHOULD be allowed. Guys signing deals in their late 30's & 40's are getting deals for ~$1MM. They'll plot out a graph of what his expected production is by age, and compare that to common salaries of players by age and production level; and each particular year individually won't look out of whack. Unfortunately.

 

And lastly, remember that the arbitrator is somebody that is chosen to be acceptable to both the NHLPA and the NHL. Each chooses 1/2 of the arbitrators, and the other has to agree to them. I'm not certain how these arbitrators are assigned, but I wouldn't be at all surprised to find out it's one that sees things the Devils and the union's way. The union helps choose the arbitrators and so most likely does Lamiorello as he sits on pretty much all the important committees. If you have a nice, cushy job as an arbitrator; are you going to guarantee that the PA punts your butt?

 

There are, unfortunately, several legitimate reasons for why this contract is set up the way it is. Although you see overwhelming circumstantial evidence that there are absolutely no legitimate reasons, there are several as to why the arbitrator would say that there are legitimate reasons.

 

Now, by no means is it a foregone conclusion that the PA will take this to arbitration (as explained in my previous post, most players in the league get hurt by this contract), but I fully expect them to do so.

 

At present time, the case for circumvention isn't slam bang. BUT at the other end, if Kovy conveniently gets injured and retires or just flat out gets tired of the game and retires in 10 years; THEN you have a pretty strong case for circumvention. At that time, you might actually be able to make the charge stick.

Agreed Taro, it would be tough, but they don't have to prove it. Thats why its called "overwhelming" circumstantial evidence, and this they can prove. Oh, and on a side note, its been 2 players to retire at 44 or beyond for exactly 93 years, not 50.

I've been in an arbitration over language in a contract, and it is correct, interpretation of the circumstantial clause is critical. "All arbitration will be subjected to Logic Interpretation and no other."

 

Basically what that means is, use common sense when reading the contract. Like I said, this will most definitely alter the Kovalchuk contract, which, in its simplest, common sense form, went as long as it did and at the amounts annually as it did clearly to get a cap hit of 6 million a season, regardless of his actual payscale. It also subscribes to the position on a buy out of this contract say, at age 37 or 38, with that being the case not only would his cap hit dissappear, but so to would the "actual" salary and in this case it would give the offending party (in this case the Devils) a real circumvention situation which would be dealt with via fine. I am not sure of what other penalties there are.

[Corp000085]

I wonder whether Bettman realizes he's staring at major jail time for RICO violations yet again?

 

I'm still annoyed about that string of BS posts.

 

 

please explain...