Tuesday night REJECTION: The NHL has rejected the Kovalchuk contract for salary-cap circumvention. The Devils have declined comment, but now this gets interesting. As I outlined below Monday, the intent of this contract was clear, but it seemed to me to be legal under the laws of the CBA. There is a provision in the CBA, however, that prohibits teams from circumventing the intent of the rules.
Where does this go from here? Humorously, the league waited to make its decision well after the theater of the news conference earlier today.
The problem that I see is the league allowed numerous other contracts that were similar in intent, from Chris Pronger to Roberto Luongo. The league has warned teams that if they continued to construct contracts like this, there would be consequences. This is a clear message by the NHL, but I see a little duel on the horizon.
The New Jersey Devils are the latest team to capitalize on a loophole negotiated into the current collective bargaining agreement five years ago, you know, the one where the league's owners locked the players -- and the fans -- out.
To circumvent the salary cap, teams are able to drastically reduce the salaries late in contracts to lower the cap figure dramatically. The loophole? If the player happens to retire, he doesn't get his money AND the team isn't penalized, so the assumption is players are taking significant pay decreases during years they have no intention of playing anyway to help their team get a cap-friendly figure.
In other words, bogus contracts.
Take Ilya Kovalchuk's contract: He signed a deal today with New Jersey for $102 million over 17 years for an annual cap hit of $6 million. He's allegedly going to play until he's 44, averaging $583,000 a year the final SIX years of his contract.
Here's the breakdown, according to Star Tribune sources:
