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Happy anniversary, Ilya Kovalchuk contract rejection fiasco

The New Jersey Devils held a press conference yesterday to announce a high-profile signing. We can only assume that, one year later, they double-checked to make sure new coach Peter DeBoer's contract was square with the NHL. No sense in holding a press conference before a deal's been authorized, right?

It's something Devils infamously learned the hard way on July 20, 2010.

Yes, it's been a full year since New Jersey owner Jeff Vanderbeek, GM Lou Lamoriello, ill-fated coach John MacLean and newly signed winger Ilya Kovalchuk(notes) sat at a dais and talked about how excited it was to have the Russian star choose New Jersey's 17-year, $102-million offer over all the teams asking for his hand.

A few hours later, the NHL rejected the deal, and the smiles were gone.

The League cited the implausibility that Kovalchuk would (a) play out a 17-year contract until age 44 and (b) that the deal paid him $95 million of the total of $102 million in the first 10 years -- then just $7 million over the last seven seasons, and a farcical $550,000 in each of the last five years of the deal.

The NHLPA fought the ruling on July 26, taking the NHL to arbitration, where Richard Bloch ruled against the Players Association grievance and upheld the contract rejection. Bloch wrote in his ruling that the Kovalchuk deal "is a retirement contract" and that it goes "well beyond the typical retirement age for NHL players."

On Sept. 3, the NHL finally approved a 15-year, $100-million contract for Kovalchuk as part of an overall agreement with the NHLPA on new long-term contract regulations with regard to the salary cap.

It was an ordeal that changed the scope and scale of big money contracts, one whose aftershocks are still being felt a year later.

So how is the NHL different after the Ilya Kovalchuk contract rejection? And is the League better having changed the rules?

$1 Million Is The New "Hockey Elderly" Wage

Kovalchuk wasn't the first player to have years at an incredibly low salary tacked onto this "lifetime" deal: Chris Pronger's(notes) salary with the Philadelphia Flyers drops from $4 million in 2014-15 to two years at $525,000.

The agreement between the NHL and the NHLPA post-Kovalchuk ended that practice with this provision:

"In any long-term contract that averages more than $5.75 million for the three highest-compensation seasons, the cap charge will be a minimum of $1 million for every season in which the player is 36-39 years of age. That $1 million value will then be used to determine the salary cap hit for the entire contract."

Thus, Brad Richards(notes) makes $3 million in his last three seasons with the New York Rangers after making $57 million in the first six and Christian Ehrhoff(notes) makes $3 million in his last three years with the Buffalo Sabres after making $37 million in the first seven.

Term Shrinkage

Kovalchuk's 17-year deal would have been the longest term in NHL history. His 15-year deal matches that of Rick DiPietro(notes) of the New York Islanders as the longest term in the League.

Only one contract signed post-Kovalchuk have a term of greater than 10 years: Jeff Carter's(notes) 11-year, $58 million contract extension.

The primary reason we haven't seen other deals like Kovalchuk's, insofar as term, goes back to the NHL and the NHLPA agreement, which included this clause:

"While players and clubs can continue to negotiate long-term contracts (five years or longer) that include contract years in a player's 40s, for purposes of salary-cap calculation the contract will effectively be cut off in the year of the contract in which the player turns 41.

"This basically means that if a 33-year-old player signs an eight-year contract, the amount owed to him in the first seven years of the contract will be averaged for the purposes of salary-cap computation. Then, in Year 8 of the contract, the salary he will make for that particular season will determine his salary-cap hit for that season."

The contracts for Richards, Ehrhoff and Keith all run out before they're 41.

(Please keep in mind that Roberto Luongo(notes) is still slated to make $1 million at age 43 for the Vancouver Canucks, one year younger than the age at which the arbitrator felt Kovalchuk's contract became a sham.)

Less Juggling Of The Salary

Via Cap Geek, here is Kovalchuk's salary on his current deal. Following the bouncing pay scale:

Happy anniversary, Ilya Kovalchuk contract rejection fiasco

Mikko Koivu's(notes) deal with the Minnesota Wild, signed pre-Kovalchuk, did much the same thing. But that practice hasn't been used for any of the long-term deals signed post-Kovalchuk. It's either a coincidence or a case where teams are cautious about being called out for it.

No More Self-Loathing GMs

It was difficult for the Devils to defend their position on Kovalchuk when Lamoriello said on the day of his signing that the 17-year deal was ownership's idea and a bit of a joke. From Tom Gulitti:

I asked Lamoriello what he would think if someone brought up Kovalchuk's contract in the next round of CBA negotiations (in two years) and pointed to it as a flaw.

"I might agree," he said. "But there is nothing that we have done wrong. This is within the rules. This is in the CBA. There are precedents that have been set. But I would agree we shouldn't have these. But I'm also saying that because it's legal and this is something that ownership felt comfortable doing for the right reasons."

It was clear that ownership—headed by Jeff Vanderbeek—was behind this particular contract. Not that Lamoriello didn't endorse bringing Kovalchuk back. Still, Lamoriello said he "absolutely" rolled his eyes when the Islanders signed Rick DiPietro to a 15-year contract in 2006 and when Washington signed Alex Ovechkin(notes) to a 13-year contract in 2008. He also said he "absolutely" rolled his eyes when Kovalchuk's contract was completed.

If there was public eye-rolling by Darcy Regier, Glen Sather, Stan Bowman or Paul Holmgren on their long-term contract offers, we didn't see it.

When It Comes To Enforcing the CBA, The NHL Is Only Interested In Slam Dunks

Lamoriello was accused in some circles as having supported the contract with the knowledge that it would get rejected, thus giving the NHL an opportunity to set a legal precedent on long-term deals and potentially drag the NHLPA to the bargaining table before the CBA was set to expire in order to change the bylaws.

Now, that's tin-foil hat territory … but there's no question the Kovalchuk case was a slam-dunk circumvention for the NHL, despite their having allowed other cases of circumvention go with a cursory investigation but no legal recourse.

Could the NHL have stepped in to fight an Ilya Bryzgalov(notes) deal that drops in value from $5.5 million at age 38 to $2.5 million at age 39? Sure, but it's difficult when Tomas Vokoun(notes) just signed for $1.5 million.

Could the NHL step in and claim that the Ehrhoff deal was a sham, too? Sure, but it's a deal that fits into the current bylaws and isn't as egregious as Kovalchuk's was.

They waited in the weeds on long-term deals until they found some easy prey. And then they pounced.

• • •

Is the NHL better off after this contract rejection and subsequent deal with the NHLPA?

That depends on whether you consider long-term deals with phony projected years of salary tacked on at the end to bring down the cap hit as being good for hockey.

Yes, it's good that this fiasco resulted in contracts that run to age 44 and pay out the NHL equivalent of a dishwasher as Wendy's being prohibited (in theory). But we still have varying degrees of cap circumvention that violates the same "spirit of the CBA" that Kovalchuk's 17-year deal did, only to a lesser degree.

Is a little cheating still cheating, or do we view one as a misdemeanor and one as a felony?

The biggest change is that the war on long-term deals is being waged by all sides: The NHLPA's members who want to sign them and its members that see them as a threat to escrow; the NHL's owners and GMs who dabble in them and their peers who see them as the devil.

This four-way dance will be held during the next CBA negotiation; it was Kovalchuk's contract, one year ago, that started the music.

(Ed. Note: Originally had Duncan Keith's(notes) contract listed as post-Kovalchuk, but it was signed before the fiasco.)

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