August 10, 2010
So have we all devoured the 20-page text of arbitrator Richard Bloch's ruling in favor of the NHL in its rejection of Ilya Kovalchuk's(notes) 17-year, $102-million deal with the New Jersey Devils? Our favorite part was when the Tyrannosaurus chased the jeep. Although we may be thinking of another bit of summer reading here.
The hockey world is debating the merits of the decision and its potential aftermath, as the Vancouver Canucks have already confirmed that the NHL is sniffing around the validity of goalie Roberto Luongo' s long-term deal.
What's clear is that the arbitrator upheld the NHL's rejection based not on any specific factor but several alleged violations of the CBA (or its spirit) by the Kamp Kovalchuk and the Devils: The money up front; the age at the end; the salary at the end, which will be below minimum in 17 years (in theory); and the no-movement clause that becomes a no-trade clause, allowing the Devils to send that contract to the minors or to waivers.
But as much as is clear about the ruling, there are certainly some misconceptions as well. Here are five myths surrounding, or solved by, the Kovalchuk ruling ...
1. MYTH: Kovalchuk's contract was criminally front-loaded in a way similar deals were not.
FACT: Larry Brooks of the NY Post, in a fear-mongering piece about the Chicago Blackhawks losing the Stanley Cup should Marian Hossa's(notes) contract be voided, makes this point about Kovalchuk's deal vs. others:
Bloch noted repeatedly that Kovalchuk will earn 97 percent of the $102 million in the first 11 years of the contract while receiving three percent over the final six years. But Hossa, who will be 42 at the end of his deal, stands to earn 93.6 percent of his money over the first eight years of his contract and just 6.4 percent in the final four years. And Luongo, who will be 43 at the conclusion of his 12-year, $64 million contract, stands to earn 93.3 percent of his money over the first nine years of his deal and just 6.7 percent in the final three.
Yes, Kovalchuk's deal is like a caricature of those deals; the "Spaceballs" to their "Star Wars." But when it comes to the percentage of salary paid out, and when it's paid, out, they're just as blatant in their circumvention.
2. MYTH: The NHL is to blame for this often-exploited CBA loophole.
FACT: Arguably, Bloch made as much news in his footnotes as he did in the decision; that's where he made mention of the NHL investigating other contracts, and that's where he dropped this note with regard to term limits on contracts:
"According to the evidence, the League attempted, but was unsuccessful in negotiating such a restriction."
'Tis true: The NHL, during the lockout, was seeking term limits on contracts to the tune of a cap of three years on every deal. But, obviously, that's something that the NHLPA successfully kept out of the 2005 CBA.
Which is a good thing for teams like the Washington Capitals and Detroit Red Wings, who have every right to sign their homegrown stars to lifetime deals; but not so much a good thing for the NHL, which had to go to an arbitrator in order to strike down a ludicrous 17-year contract created by loophole-exploiting owners/GMs and the NHLPA's small victory in the lockout.
FACT: In his piece on the NHL's victory, Craig Custance of The Sporting News considered the following ramification:
Consider for a moment that the Kovalchuk contract was accepted. Consider if Bloch had sided with the NHLPA and forced the contract through.
Instead of clearly defining a line, it could have been a free-for-all. Kings general manager Dean Lombardi could have rushed to Drew Doughty and offered up a 30-year deal. Because, why not? Structured the right way, all the elements would have been legal under the current CBA.
The notion that a 21-year-old Doughty's 30-year contract would have been ratified because there wasn't a "defining line" is just daft, even if it was "structured the right way." The NHLPA wouldn't have lifted a finger to the keyboard to dispute it after the NHL spiked it like a football in a touchdown dance. It's a ludicrous example; the sort of thinking that leads to "well, if you let two dudes marry, then what about a dude and a sofa then, huh?"
We know this because Bloch told us:
"A contract term covering a Player's NHL services to age 70, for example, is not expressly prohibited by the CBA. But the parties to that SPC may not reasonably be found to be seriously anticipating its fulfillment. The Association does not suggest that such agreement must pass muster under Article 26."
If the notion from Custance is that Kovalchuk's voided 17-year contract is a "defining line" against long-term deals, that isn't what Bloch ruled in the case:
"One accepts, therefore, that the CBA does not speak to the length of an SPC, the compensation limit in any single contract, the salary structure in terms of back or front loading or, generally, any affiliated player movement restrictions. But, the language of Article 26(3) speaks loudly to the parties' intention that one look not only to whether the individual terms of the agreement conform but also to whether the agreement, taken in its entirety, may be said to have been intended, or even if not intended, has the effect of defeating or Circumventing the CBA.
"The possibility, therefore, that a Club and Player could construct an agreement, the individual terms of which are inoffensive but which, when taken together, challenge the provisions of the CBA is precisely within the contemplation of the signatories to the CBA."
Doughty could play until he's 41; hell, for a player of his caliber on defense, it's nearly expected these days. And if the contract doesn't have a clear escape hatch for the Los Angeles Kings like a no-movement clause becoming an no-trade clause -- and the last, say, 4 years of the contract are somewhere between $1.5 million and $1 million (a reasonable amount, no?) -- he could sign for 20 by the time you finish this sentence, under the current CBA.
Because there's nothing in it, or Bloch's ruling, that prevents that term.
4. MYTH: The Collective Bargaining Agreement is explicit about maintaining competitive balance in the NHL.
FACT: Go figure -- the words "competitive balance" don't even appear in the CBA.
That the NHLPA actually used this oversight in its defense of the contract is, well, a bit of a reach as Bloch noted:
"It is true, as the Association notes, the words 'competitive balance' nowhere appear in the CBA. But the core and character of the negotiated Team Payroll Range System provisions of Article 50 are directed to precisely that goal."
Article 50 is the one that explains how the salary cap is tied to revenue and establishes the cap ceiling and floor.
"BUT IT DOESN'T SAY 'COMPETITIVE BALANCE!!!!'" - NHLPA
5. MYTH: The Devils, Kovalchuk and his agent knowingly created this contract with the intent to violate the CBA.
FACT: Bloch doesn't see it that way. From the ruling:
"Nothing in this Opinion should be read as suggesting that either the Club or Mr. Kovalchuk operated in bad faith or on the basis of any assumption other than that the SPC was fully compliant with the CBA. While intent is specifically listed as a potentially relevant factor in a proceeding such as this, the System Arbitrator here concludes the SPC terms themselves demonstrate this agreement 'has the effect of defeating' the provisions of the CBA, with particular reference to the Team Payroll Range language."
In other words, the Devils and Kovalchuk assumed the vague provisions of the CBA and the previous ratifications of similarly-constructed Standard Player Contracts meant that their creative accounting would also be ratified by the NHL.