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Tuesday, August 10, 2010

Fresh Off Kovalchuk Arbitration Victory, NHL Set To Challenge Other Contracts

Immediately after arbitrator Richard Bloch voided Kovalchuk's 17-year "deal with the Devils", the League seemed intent on sewing up all of it's loose end deals, some that had even been "investigated" before.

Canuck general manager Mike Gillis confirmed in an email to the Vancouver Sun Monday night that the league is indeed studying Luongo's 12-year, $64 million contract.

"We have complied with the NHL request for information and are awaiting further instructions," Gillis said. "Cannot say anything further at this point."

Luongo's deal, signed last September, begins this season and will pay him $10 million in 2010-11. In the final year, when he is 43, Luongo is scheduled to make just $1 million. The goaltender's cap hit over the 12 years is $5.33 million.
 In his ruling, Bloch made reference to the recent long-term contracts signed by Roberto Luongo, Chris Pronger, Marian Hossa and Marc Savard.

The National Hockey League Players Association noted that since these four contracts had been approved "with structures similar" to the Kovalchuk deal, then Kovalchuk's deal with the Devils should also be approved. However, Bloch wrote:

"The apparent purpose of this evidence is to suggest that the League's concern is late blooming and/or inconsistent. Several responses are in order: First, while the contracts have, in fact, been registered, their structure has not escaped League notice: those SPCs [standard player's contracts] are being investigated currently with at least the possibility of a subsequent withdrawal of the registration."...

In regards to Luongo's contract, Bloch wrote:"[Luongo] has a 12-year agreement that will end when he is 43. After averaging some $7,000,000 per year for the first 9 years of the Agreement, Luongo will receive an average of about 1.2 million during his last 3 years, amounting to some 5.7% of the total compensation during that time period."

The league had rejected Kovalchuk's 17-year deal, saying the longest deal in league history violated its salary cap.
We will say this: we were one of the few outlets that were not surprised by the ruling.  Kovalchuk's deal, while similar to other long term contracts, was a much more blatant attempt to purposely lower the cap hit.

Yet, from a PR standpoint, it just looks a little flimsy that the NHL needed the ruling to go their way in order to revisit past "loop hole" deals that they supposedly already have investigated.

This is egregious, do you hear me? Egregious!
For example, they were a bit put off by Hossa's contract last summer.  The NHL "investigated" it.  Approved it... but after Kovalchuk's arbitration, they will go back and look at it again?

These kind of actions seem to have the NHL strip away it's own authority. If they didn't approve of prior contracts, the time to reject their validity was at the time of ratification, not after the league was slapped in the face by an even more egregious deal.

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