September 04, 2010
News of a peace accord between the NHL and the NHLPA on long-term contracts hit the media at around 2:30 p.m. ET on Friday afternoon, with paperwork just needing to be finalized by the 5 p.m. ET deadline that was set earlier this week to approve Ilya Kovalchuk's(notes) contract with the New Jersey Devils.
Then deadline was moved to 7 p.m. Then 8 p.m. Then 10 p.m. Then 1 a.m. on Saturday morning. Then 3 a.m.
According to Tom Gulitti of the Bergen Record, who did exemplary work on this ordeal all summer, the deal was finally struck at 2:53 a.m. ET. Hey, they beat the deadline! Happy Labor Day Weekend!
Here's the official word from the NHL and NHLPA on the CBA amendment, which sounds very much like the details that leaked to TSN with some additional specifics and some analysis to follow:
NEW YORK/TORONTO (September 4, 2010) - The National Hockey League Players' Association and National Hockey League today announced an agreement that will implement new rules governing the parameters of long-term contracts and how they are valued within the NHL Salary Cap System.
As part of the agreement, the NHL will register the contract between the New Jersey Devils and Ilya Kovalchuk that was filed with the League on August 27, 2010. The NHL also will terminate its circumvention investigations into the contracts signed in 2009 by Marian Hossa(notes) of the Chicago Blackhawks, Roberto Luongo(notes) of the Vancouver Canucks, Marc Savard(notes) of the Boston Bruins and Chris Pronger(notes) of the Philadelphia Flyers.
Under the terms of the agreement, the new rules will apply only to long-term contracts, defined as those with terms of five years or longer, and only to contracts executed after September 4, 2010. The new rules apply to contracts signed between now and the end of the CBA, as well as all contracts signed that begin in the 2012-13 season. The parties have agreed that the new rules do not automatically carry over into a new CBA.
For the purpose of Salary Cap calculations, any long-term contract that extends past a player's 41st birthday will be valued and accounted for in two ways: The compensation for all seasons that do not include or succeed the player's 41st birthday will be totaled and divided by the number of those seasons to determine the annual average value (AAV) charged against the team's Cap for those seasons. In all subsequent seasons, the team's Cap charge will be the actual compensation paid to the player in that season (or seasons, as appropriate).
Additionally, in any long-term contract that averages more than $5.75 million for the three highest-compensation seasons, the following rule shall apply: Solely to determine its value for purposes of the Salary Cap, a player's compensation for any season in which he is age 36, 37, 38, 39 and/or 40 shall be valued at a minimum of $1 million.
"We're pleased to be able to establish clearly-defined rules for these types of contracts going forward and just as happy we can turn the page on uncertainties relating to several other existing contracts," NHL Deputy Commissioner Bill Daly said. "From start to finish of this multi-week process we were able to work closely and cooperatively with representatives of the Players' Association, who shared our belief that the creation of definitive rules and guidelines in this area would be beneficial to everyone - Clubs and players alike."
"We are pleased to finalize an agreement which ends the League's circumvention investigations and also establishes rules on long-term contracts that will provide players, their certified agents and general managers clarity for the negotiation of new contracts," said Roland Lee, Director of Salary Cap/Marketplace & Associate Counsel for the NHLPA. "Turning the page on this process is something that will benefit all parties involved."
Meanwhile, the Devils can finally market their star for the 2010-11 season ...
Devils GM Lou Lamoriello released the following statement this morning:
"We have been advised today that the NHL has approved the contract between Ilya Kovalchuk and the New Jersey Devils. We are very pleased with this decision which will see Ilya Kovalchuk remain a valuable member of the Devils.
"The New Jersey Devils acted in good faith throughout this entire process and operated solely on the assumption that our negotiations and both contracts reached were fully compliant with the CBA, as written and applied. Arbitrator Bloch reached that same conclusion in his August 9 decision. We are pleased that this matter has finally been concluded to all parties' satisfaction."
That second paragraph could have been shortened to: "Please don't fine us or take away our draft picks."
A few quick thoughts:
• The release specifically mentions Chris Pronger's contract, which Larry Brooks of the NY Post had reported had already been accepted by the NHL. So perhaps it hadn't been quite yet.
• We expected to see the 5-year deal established as the benchmark for something "long-term"; interesting to see "any long-term contract that averages more than $5.75 million for the three highest-compensation seasons" as the trigger for the new CBA rule. It doesn't really apply to any of the deals in dispute, nor would any superstar contract likely dip under that number on average for three years, but that's now the benchmark.
• Interesting that any deal that begins in the 2012-13 season will be governed by this rule, considering that season could be under an entirely new CBA. And please note that these rules aren't automatically carried over to that new CBA, so this is just a band-aid for now.
• It's still hard to stomach the NHL putting up this fight only to allow five contracts it feels cheat the CBA; but then again, they've been approving these contracts for the last few years anyway, and no more going forward. When cheating becomes a bargaining chip ...
• Thank the hockey gods this is over. Until someone attempts to exploit a loophole no one's considered yet ...