NHL now looking into Hossa, Luongo contracts

[LexLuthor871]

Good for the NHL! Circumvention of the cap is one issue that really rankles me, especially after the season was shut down. Hope the other contracts get voided too.

 

http://sports.espn.go.com/nhl/news/story?id=5452630

[nobody]

How can the NHL approve these contracts and then come back and decide they don't like them.

[static70]

How can the NHL approve these contracts and then come back and decide they don't like them.

I'm just guessing here, but Lou pushed it to see where the limits were, I would imagine since the NHL has seen the arbitrators ruling on the Kovy contract, they are now pushing it to see how far they can go?

 

Anyways, thats what I'm thinking here.

[nobody]

Found some answers for myself. :)

 

 

TSN article

 

 

""We are cooperating fully with the League in its investigation of the Marc Savard contract extension," Bruins General Manager Peter Chiarelli said in a statement released on Tuesday. The League informed us upon their registration of the contract on December 1, 2009 that they would be investigating the circumstances surrounding this contract. "

 

 

 

"The NHL Players' Association argued that those four deals were approved and that Kovalchuk's deal should be approved as well.

Bloch disagreed with that point, writing:

"The apparent purpose of this evidence is to suggest that the League's concern is late blooming and/or inconsistent. Several responses are in order: First, while the contracts have, in fact, been registered, their structure has not escaped League notice: those SPCs [standard player's contracts] are being investigated currently with at least the possibility of a subsequent withdrawal of the registration.""

[Taro T]

Found some answers for myself. :)

 

 

TSN article

 

 

""We are cooperating fully with the League in its investigation of the Marc Savard contract extension," Bruins General Manager Peter Chiarelli said in a statement released on Tuesday. The League informed us upon their registration of the contract on December 1, 2009 that they would be investigating the circumstances surrounding this contract. "

 

 

 

"The NHL Players' Association argued that those four deals were approved and that Kovalchuk's deal should be approved as well.

Bloch disagreed with that point, writing:

"The apparent purpose of this evidence is to suggest that the League's concern is late blooming and/or inconsistent. Several responses are in order: First, while the contracts have, in fact, been registered, their structure has not escaped League notice: those SPCs [standard player's contracts] are being investigated currently with at least the possibility of a subsequent withdrawal of the registration."

That the league hadn't approved the other questionable contracts, but merely "registered" them while they (apparently) were under investigation for circumvention makes this all much more interesting. It also gave the league a leg to stand on with regards to Kovy's deal, and apparently is part of what caused Bloch to reach his decision.

 

I haven't seen any links to the full text of Bloch's ruling. If anyone has a link to it, it would be appreciated.

 

It'll be interesting to see if this leads the players to choose a "hardliner" to run the NHLPA. I'm hoping this doesn't turn into a case of the league getting a short term benefit but losing out in the end.

[shrader]

Found some answers for myself. :)

 

 

TSN article

 

 

""We are cooperating fully with the League in its investigation of the Marc Savard contract extension," Bruins General Manager Peter Chiarelli said in a statement released on Tuesday. The League informed us upon their registration of the contract on December 1, 2009 that they would be investigating the circumstances surrounding this contract. "

 

 

 

"The NHL Players' Association argued that those four deals were approved and that Kovalchuk's deal should be approved as well.

Bloch disagreed with that point, writing:

"The apparent purpose of this evidence is to suggest that the League's concern is late blooming and/or inconsistent. Several responses are in order: First, while the contracts have, in fact, been registered, their structure has not escaped League notice: those SPCs [standard player's contracts] are being investigated currently with at least the possibility of a subsequent withdrawal of the registration.""

 

So Boston's trying to find a cheap escape from that contract and their cap woes. Too funny.

[Swedesessed]

Can they look at Tim Connolly's contract?

[carpandean]

So Boston's trying to find a cheap escape from that contract and their cap woes. Too funny.

That's exactly what I thought when I read that. Of course they are cooperating.

 

I'd be happy to take Savard's contract, but apparently Darcy doesn't agree.

[deluca67]

Can they look at Tim Connolly's contract?

I am with you on this. Pominville's, Connolly's and Rivet's contracts certainly circumvents the Cap. If not the Cap they circumvent the Sabres chances at winning a Cup.

[That Aud Smell]

How can the NHL approve these contracts and then come back and decide they don't like them.

that was my first thought as well.

 

That the league hadn't approved the other questionable contracts, but merely "registered" them while they (apparently) were under investigation for circumvention makes this all much more interesting.

but i now see that this is what must've happened. i read somewhere else (not going to go looking for it, sorry) that the operative parts of the pronger and luongo contracts hadn't even yet gone into effect, so the league's clock hadn't started running in terms of yanking certification. as for hossa, i'm pretty sure that his circumventing contract started right away, so i'm not so sure how the league gets traction there -- maybe there's a probationary period of time during which the league can register and thereafter de-certify (maybe not the CBA's term for it) a contract, even after that contract had been partially performed.

 

Can they look at Tim Connolly's contract?

+1

[bunomatic]

I'm thinking that Mike Gillis is hoping the n.h.l. will pull luongos contract as well. Gillis kind of handcuffed the canucks with that one but Gillis would never admit that. Luongo is a whole lot of hype with nothing to back it up.

[Taro T]

that was my first thought as well.

 

 

but i now see that this is what must've happened. i read somewhere else (not going to go looking for it, sorry) that the operative parts of the pronger and luongo contracts hadn't even yet gone into effect, so the league's clock hadn't started running in terms of yanking certification. as for hossa, i'm pretty sure that his circumventing contract started right away, so i'm not so sure how the league gets traction there -- maybe there's a probationary period of time during which the league can register and thereafter de-certify (maybe not the CBA's term for it) a contract, even after that contract had been partially performed.

 

 

+1

Not surprisingly, it's a pretty convoluted process for league approval/certification of contracts. Much more convoluted than I'd have expected.

 

The readers digest version is that the league has 1 day to challenge/approve a contract during the season and 5 days to challenge/approve a contract in the off-season. If the league doesn't approve/challenge it w/in that time, the contract is considered approved. From the media reports, it would appear that the league never officially approved any of the "questionable" contracts but they obviously were defacto approved. (Kind of like a reverse pocket veto.)

 

But, the league CAN go back later and challenge an approved contract. (Whether it was actually approved or tacitly approved.) This is where it gets convoluted. The league has 60 days (14 in cases not dealing w/ circumvention) to challenge "from the date upon which facts of the Circumvention became known or reasonably should have been known to the NHL."

 

So this is where things become truly convoluted. Did the league know the "facts" about the Circumvention when the contracts were signed, which is what I'd expect the NHLPA to argue; do they know the facts as of the issuance of Bloch's decision, which means a 60 day clock is ticking; or will it only know the facts upon completion of an investigation into the particulars of a particular contract, which seems unlikely as it could drag this out well past the start of the next season?

 

It appears, from the media reports, that the league is taking the view of the last option; but I'd expect they'll try to file any challenges prior to the start of the season.

 

If the league successfully challenges a contract prior to it taking effect, the contract is voided and the player goes back to being a FA.

 

In the case of a successful league challenge to a contract that has taken effect (for Hossa, or any of the others if a decision doesn't happen until after they've been paid under the new deal), then the monies earned to that date are the player's and he goes back to being a FA.

 

There is one interesting sentence in that scenario, in that if the arbitrator rules for the NHL but determines it was only the team that was circumventing the rules and not the player; then that player shall be "made whole by the Circumventing Club for any damages suffered by the player..." Since it is very unlikely a player would get another contract for as much money as the rejected deal (especially after teams are already up near the cap during the season), a case could be made by the player that the circumventing team still owes him any difference between what he makes in his new contract vs what he was due to make in the circumventing contract. IF that occurred (I'd say it's doubtful that the arbitrator would decide the team was circumventing but the player wasn't; but that is possible) then a whole nother can of worms gets opened regarding how much cap space does that team lose to make those payments and when does it lose the cap space.

 

This also is where some pundits have come up with the conspiracy theory that Lamiorello was in cahoots with the league in offering Kovy this deal because he knew it was blowing well beyond the intent of the cap rules and that this contract could be used as a point to shoot down those other ones. I'm not buying it, primarily because of how toxic it could make relations between the players and management and how it could sully Lou's reputation; but it does make for an entertaining sport.

 

As I said earlier, this is getting interesting.

[nfreeman]

It'll be interesting to see if this leads the players to choose a "hardliner" to run the NHLPA. I'm hoping this doesn't turn into a case of the league getting a short term benefit but losing out in the end.

Well, it sounds like they've been recruiting Fehr, the ultimate hardliner, for quite a while now anyway.

 

I think there is going to be another showdown when this CBA expires, and I expect the owners will win again in the sense that they will close some of the cap loopholes and possibly make some tweaks to arbitration and the UFA rights. I don't think the owners will try to implement radical changes like in 2005 -- they've already gotten most of what they wanted. I think if the players try to undo the hard cap and the escrow, they won't get anywhere, since most of the owners would rather not operate their teams than go back to an uncapped system.

 

I'd be happy to take Savard's contract, but apparently Darcy doesn't agree.

I've been thinking about this one -- he's very skilled and would look very nice on the top line with Vanek, but he's 33, 5'10", 195, just missed half a season with a concussion and due to be paid $7MM, $7MM, $6.5MM and $5MM over the next 4 seasons. The cap hit is a much friendlier $4MM, but I think real cash cost is more important to the Sabres than cap hit. He's also not that fast at 33, so by age 36 (when he'll be making $5MM), the game will likely have passed him by and he'll be impossible to unload.

 

Having said all of that, if we were to hear this afternoon that the Sabres traded Butler or Stafford and a #1 for him, I'd be quite pleased.

[carpandean]

I've been thinking about this one -- he's very skilled and would look very nice on the top line with Vanek, but he's 33, 5'10", 195, just missed half a season with a concussion and due to be paid $7MM, $7MM, $6.5MM and $5MM over the next 4 seasons. The cap hit is a much friendlier $4MM, but I think real cash cost is more important to the Sabres than cap hit. He's also not that fast at 33, so by age 36 (when he'll be making $5MM), the game will likely have passed him by and he'll be impossible to unload.

 

Having said all of that, if we were to hear this afternoon that the Sabres traded Butler or Stafford and a #1 for him, I'd be quite pleased.

It definitely would be a question of when old age really strikes him vs. when his contract falls off; probably in the $5 million year. Skill-wise, though, he is a legit first-line center. Four straight 60+ assist seasons with over a PPG in each (three with 82 GP, one with 74) before the headshot last year and not bad on faceoffs (around Roy's level, but well above Connolly.)

 

That said, maybe the Sabres can just wait until the league voids that contract and pick him up as an UFA. Yeah, I know I'm dreaming.

[shrader]

It definitely would be a question of when old age really strikes him vs. when his contract falls off; probably in the $5 million year. Skill-wise, though, he is a legit first-line center. Four straight 60+ assist seasons with over a PPG in each (three with 82 GP, one with 74) before the headshot last year and not bad on faceoffs (around Roy's level, but well above Connolly.)

 

That said, maybe the Sabres can just wait until the league voids that contract and pick him up as an UFA. Yeah, I know I'm dreaming.

 

While we're playing the fun speculation game, imagine this one. What would have happened if they had traded him already, then the league found a way to void the contract? I'd love to see what they would have done in that situation, especially if draft picks would have been involved.

[inkman]

Does the NHL ever get it right? It seems like they shoot themselves in the foot with regularity.

[nfreeman]

Does the NHL ever get it right? It seems like they shoot themselves in the foot with regularity.

Why? They won this case, which didn't seem likely, and for that matter they won the lockout.

[Taro T]

While we're playing the fun speculation game, imagine this one. What would have happened if they had traded him already, then the league found a way to void the contract? I'd love to see what they would have done in that situation, especially if draft picks would have been involved.

Excellent question.

 

I have a funny suspicion that had he been traded, the league would have been smart enough to simply let their 60 day window lapse without taking action. Wait, what the heck am I saying? Of course they'd have pushed that one just so they could hear the "Earth shattering Ka-boom." Even though the Illudium Space Frequency Modulator was aimed at their own shorts.

Does the NHL ever get it right? It seems like they shoot themselves in the foot with regularity.

Rarely.

 

They actually were showing signs in '05 of "getting it." (The CBA, revenue sharing, the revamped competition committee, improved revenues from league-wide sources (Canadian TV, internet))

 

But they seem to have found going back to the "Daffy Duck inspect the shotgun by staring down the barrel and pulling the trigger" mode of operation irresistible.

[Stoner]

Does the NHL ever get it right? It seems like they shoot themselves in the foot with regularity.

T A R O S E Z : A N D I T ' S A L E F T F O O T T O B O O T

[tasker48b]

If the NHL can look into revoking previously approved contracts, can they now look at getting money back from their negotiators/lawyers for not clearly closing this loophole before signing the CBA?

 

The NHL could have easily lost the Kovalchuk decision (and, in my view, probably should have). If the NHL wanted term limits on contracts, restrictions against sliding salaries, etc. the league shouldn't have signed a CBA that didn't have them.

 

With the consensus opinion being that there is no way these long term contracts will be honoured (i.e. "Kovalchuk won't be playing at 44", etc.) I noticed that a 40-year old T. Selanne signed a 1-year $3.25 million contract.

[shrader]

If the NHL can look into revoking previously approved contracts, can they now look at getting money back from their negotiators/lawyers for not clearly closing this loophole before signing the CBA?

 

The NHL could have easily lost the Kovalchuk decision (and, in my view, probably should have). If the NHL wanted term limits on contracts, restrictions against sliding salaries, etc. the league shouldn't have signed a CBA that didn't have them.

 

With the consensus opinion being that there is no way these long term contracts will be honoured (i.e. "Kovalchuk won't be playing at 44", etc.) I noticed that a 40-year old T. Selanne signed a 1-year $3.25 million contract.

 

They don't want term limits. DiPietro is a perfect example of that. All they want are deals where each side actually actually intends on reaching the end of the contract.

[nobody]

With the consensus opinion being that there is no way these long term contracts will be honoured (i.e. "Kovalchuk won't be playing at 44", etc.) I noticed that a 40-year old T. Selanne signed a 1-year $3.25 million contract.

 

 

That's a little more money then the 550k Kovalchuk will be making based on that contract.

[shrader]

That's a little more money then the 550k Kovalchuk will be making based on that contract.

 

Hell, that's more than Kovalchuk was going to make in the last SEVEN years of that "contract".

[tasker48b]

They don't want term limits. DiPietro is a perfect example of that. All they want are deals where each side actually actually intends on reaching the end of the contract.

 

I don't disagree and, yes, the Kovalchuk contract is pretty egregious.

 

However, the NHL locked out the players for a year and their lawyers/negotiators didn't have the foresight to see this coming? The could have place restrictions on how much the value of a contract can change per year or over the life of the contract or whatever.

 

If all the NHL wants is deals were each side actually intends on reaching the end of the contract ..... don't sign a CBA with a loophole that allows players and teams to enter into contracts that they have no intention of honouring. What is the NHL paying its lawyers for?

 

The arbitrator was left with the awkward ruling on Kovalchuk that while nothing in the deal violates the "four corners" of the CBA his crystal ball of future intentions said the deal was no good.

 

The NHL also looks particularly bush league by giving approval (or at least not immediately challenging) previous deals that were similarly structured that it may now reverse.

[shrader]

I don't disagree and, yes, the Kovalchuk contract is pretty egregious.

 

However, the NHL locked out the players for a year and their lawyers/negotiators didn't have the foresight to see this coming? The could have place restrictions on how much the value of a contract can change per year or over the life of the contract or whatever.

 

They do have restrictions. Someone else can explain them better, but there are definitely restrictions.

 

If all the NHL wants is deals were each side actually intends on reaching the end of the contract ..... don't sign a CBA with a loophole that allows players and teams to enter into contracts that they have no intention of honouring. What is the NHL paying its lawyers for?

 

It doesn't matter what they do, someone will always find loopholes. It happens in every single sport and it will never end.

 

The NHL also looks particularly bush league by giving approval (or at least not immediately challenging) previous deals that were similarly structured that it may now reverse.

 

They looked into challenging previous deals but ultimately reached the decision that it wasn't going to work. This contract took all the questionable moves of those previous deals and then blew them away. There's a line for just about everything and this one went way over it. You have to draw the line somewhere.