The NHL has told the Devils to go to hell. Not literally, but they may as well have.
The NHL has slammed the New Jersey Devils after finding them to have deliberately circumvented the NHL salary cap in their original attempt to sign forward Ilya Kovalchuk by fining them, and stripping them of draft picks.
The punishment was announced by the league Monday to be a $3 million fine, forfeiture of their 2011 3rd round NHL Entry Draft selection, followed by the forfeiture of a 1st round NHL Entry Draft selection sometime within the next four years. The Devils will have to advise the NHL following the conclusion of the Stanley Cup Final in the calendar year in which the pick will be forfeited. The cut-throat decision has been handed down by the NHL after a long battle between themselves, the NHLPA, Lou Lamoriello, and Kovalchuk.
Arbitrator Richard Bloch ruled that the original 17 year, $102 million contract that the Devils and Kovalchuk agreed to in July attempted to circumvent the NHL salary cap. The deal was heavily front-loaded with Kovalchuk earning $95 million over the first 10 years of the deal, but only $7 million over the final seven seasons, reducing the cost against the salary cap to $6 million per year. Should the deal have been allowed, Kovalchuk would be 44-years old when the contract expired.
This wasn’t the only deal to be structured in this fashion, though, as names like Marc Savard, Roberto Luongo, and Marian Hossa (just to name a few) all have very long-term contracts that are heavily loaded at the front end.
These contracts, too, took heat from the NHL and were apparently being “investigated.” The worries grew large and fast that another dispute between the NHL and NHLPA was rampant and another lockout could be looming.
With the (Kovalchuk) deal denied, the Devils management pumped out another re-worked contract (many times over) that calls for Kovalchuk to collect a reported $100 million over 15 years, with an annual cap hit of close to $6.66 million. The deal is thought to pay out $90 million in the first ten years and $10 million over the last five. This one was finally approved by the NHL as a legitimate contract. In accordance with the approval, amendments were made to the rules in the structuring of long-term (5 years or more) contracts. The amendments and explanation of the NHL’s acceptance can be found on my post previous; Kovalchuk: A Deal With the Devils.
The end result was in the NHL accepting the re-worked deal and placing their stamp of approval on it. Why, then, is there such a steep penalty to be paid?
"We were today advised of the ruling by the commissioner with respect to the Kovalchuk matter. We disagree with the decision. We acted in good faith and did nothing wrong. We will have no further comment." said general manager Lou Lamoriello in response to the penalty.
The NHL’s decision is final, apparently, as they consider the matter closed, and according to their statement will have no further comment on the situation.
The Devils have the right to appeal to the board of governors Tuesday in New York, but it is not yet known if they will challenge the NHL’s penalty.
It was a hard road for the Devils to obtain and sign Ilya Kovalchuk. The original deal sent Kovalchuk, Salmela, and a 2010 2nd round draft pick to the Devils in exchange for Niclas Bergfors, Johnny Oduya, Patrice Cormier, a first and second round draft pick in 2010, and now ultimately a 3rd round 2010 draft selection, and a future 1st rounder, plus $3 million worth of fines.
The Devils really have to hope Kovy produces in New Jersey.
Mr. Commissioner, I call out to you and your staff members to be sure you’re making the right decisions. You guys made the mistake by not covering your bases until after you were faced with an issue, and to punish one of the best teams in your league that has served you proudly for 27 years is not right. To deny the contract is one thing, but to punish a club for technically abiding by your rules?
I don’t like the first contract, either. In fact, I don’t like the second contract. I personally feel that a player’s take-home should be the club’s cap hit per-year, but if that logic failed I certainly wouldn’t pass the buck, and then collect the bucks.
Lou Lamoriello did not cheat you, nor did ‘his royal humbleness’ Ilya Kovalchuk, and your reaction worries me that players will once again be willing to shut it down for a season. Your reign in the NHL has had its’ lows already, and I’ve forgiven and forgotten. In fact, in recent years I think you’ve done a great job and the game couldn’t be too much better, but another lockout would have me convinced you’re not the right guy.
You watched and paid for the Coyotes’ franchise last year, have you already forgotten what it’s like?
New Jersey will survive this. The $3 million is hard for most of us to wrap our head around, but when they’re not cap dollars a club like New Jersey can pay it.
New Jersey has built from the draft and will surely take a hit from the two lost picks (primarily the 1st rounder), but will overcome with what they already have. They’ve made the playoffs 20 of the last 22 years and won 3 Stanley Cup Championships.
- Kendall Grubbs
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