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Kovalchuk decision helps league curtail salary-cap circumvention

by | CBSSports.com Staff Writer

Maybe Ilya Kovalchuk will get a chance to do his own live television announcement after all.

Ilya Kovalchuk's deal with the Devils would have lasted until he turned 44. (Getty Images)  
Ilya Kovalchuk's deal with the Devils would have lasted until he turned 44. (Getty Images)  
There's not much to watch anyway in August and hey, it's only fair right?

Kovalchuk was the NHL's marquee free agent this summer. And he was arguably the most desirable ever to be available at this stage of his career. Should have been show time for a rare talent, but instead, Kovalchuk got drowned out by the noise LeBron and Co. made when the market opened last month. By the time he signed an unprecedented 17-year, $102 million deal with the New Jersey Devils two weeks ago, there was hardly any fanfare.

Now Kovalchuk gets a new chance to have the spotlight all to himself once again -- a free man thanks to the arbitrator who ruled the league was justified in rejecting the contract on the grounds that it was, well, ridiculous.

Arbitrator Richard Bloch sided with the league's assertion that this was a blatant attempt at circumventing the salary cap by astutely noting that the vast majority of players are long retired by the time they are 44 years old. By some strange coincidence, that's the age Kovalchuk would be if he finished this contract.

Of course Kovalchuk wouldn't really have to hang around that long since nearly $99 million of the money would be paid in the first 11 seasons. And if he left after that, the Devils would owe him so little in real terms that the separation would be painless for both sides.

In the meantime though, the average salary would conveniently fit into the salary cap as an annual $6.5 million hit, following a strategy for paying big bucks to star players that have been devised by several other teams in recent seasons. It's a legitimate accounting trick to heavily front-load deals, although the NHL hasn't been thrilled with those given to the likes of Marian Hossa, Roberta Luongo and Chris Pronger in recent years. Yet those were ultimately approved after some nose-pinching because they didn't push the envelope to such an embarrassing extreme.

Kovalchuk's deal did, and Bloch didn't necessarily surprise anyone when he said as much. Still in his post-ruling statement New Jersey GM Lou Lamoriello said both sides believed they were complying with the collective bargaining agreement. And Lamoriello made a point of noting that "nothing in [Bloch's] opinion should be read as suggesting that either the club or Ilya Kovalchuk operated in bad faith."

More on Kovalchuk

Even so it was inevitable that the deal would force the league to take a stand. And probably not a moment too soon.

The real problem, one that that figures to be contentious when negotiations begin next year for a new collective bargaining agreement, is that the loopholes for these kinds of contracts do exist in the current CBA. You fit the money under the gap and that's all that's supposed to matter.

The Detroit Red Wings figured that out a couple of years back with new deals for Henrik Zetterberg and Johan Franzen, blazing a new path that other teams have eagerly followed. But from the league's perspective, the method could endanger the system of parity the league fought for by locking out a season to get a hard salary cap because rich or big-market teams can still outspend more frugal ones.

Creative contract structures have clearly made it more feasible to make deals like the one Lamoriello said he "shouldn't have" the day Kovalchuk's signing was announced. And Lamoriello, a hardliner during the lockout, has been around long enough to know if Kovalchuk was allowed to sign for 17 years at age 27, a team like the Los Angeles Kings could lock up a much younger Drew Doughty, or Tampa Bay a Steven Stamkos for 20 years or more and then everything gets out of whack.

Meanwhile things are unsettled for both the Devils and Kovalchuk. The Russian star is back on the open market and can either try to work out a new deal with the Devils or look someplace else to work, although that won't get any easier with most teams filling up their cap space.

The Los Angeles Kings, a strong suitor early in free agency could get back in the picture, although their $3 million free-agent signing recently of Alexei Ponikarovsky might preclude that now. Then there's always the KHL, where they would pay mega money to bring a big star like Kovalchuk home.

It could turn out the NHL will actually have to battle for the services of one of the world's top players. But the bigger battle for the league will come when this issue gets hashed out in CBA bargaining.


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