Wednesday, July 21, 2010

NHL rejects Kovalchuk's contract... Long-term deals the new normal?

Not too long ago, the New York Islanders signed goaltender Rick DiPietro to a 15-year contract. Hockey fans and analysts throughout North America scratched their heads in wonder, some even laughed at the situation. While DiPietro’s injury problems left lingering questions about the deal, it appears that Islanders GM Garth Snow was on to something; long-term deals in the NHL now appear to be the new normal.

Since the DiPietro contract, Alex Ovechkin, Marian Hossa, Johan Franzen, Henrik Zetterberg, and Roberto Luongo have all signed 12-year contracts (in Ovechkin’s case it is a 13-year deal). What did Garth Snow know that the other NHL general managers did not? Front-loaded contracts could be a great way to circumvent the league’s salary cap. I am not saying that was the motivation behind any of these signings, but when the New Jersey Devils agreed on a 17-year deal with this year’s free agent prize, Ilya Kovalchuk, the NHL did, taking a stand and rejecting the contract, possibly making Kovalchuk a free agent once again. The next step in this situation is uncertain at this point; the NHLPA can file a grievance with the league by 5pm on Monday, with the possibility of arbitration, or the Devils and Kovalchuk can re-work the deal more to the NHL’s liking.

It is interesting to note, that the league’s general managers could be using a loophole in the CBA, which allows for these types of contracts; a CBA that the league and its owners deemed essential enough to wipe out an entire season of hockey to obtain. The general managers are not using their own money in these deals; it obviously belongs to the team owners. So, if the GM’s are using a loophole in the current CBA, negotiated by Commissioner Bettman on behalf of the owners, what can we expect when the next round of negotiations begin when the current deal ends? If the league wishes to close the door on these contracts, another costly work stoppage could be on the horizon. However, by handing out 12, 13, and 17-year contracts in the range of $100 million, it will be difficult for the owners to cry “poor” when facing the NHLPA at the bargaining table.

The current CBA was supposed to bring “cost certainty” to the league, but it appears there are more questions then answers under agreement. Teams that were losing money with a $20 million payroll before the lockout are now spending at the salary cap minimum, which is currently in the $40 million range for the upcoming season. The only cost certainty in the current CBA is that teams are spending more then before the work stoppage.

In the Kovalchuk/New Jersey situation, technically the league is in a grey area with their refusal to register the contract. As mentioned before, the contract appears to fall within a loophole and the NHL will have great difficulty in proving that Kovalchuk does not plan to honour the entire term of the deal. Today’s athletes are fitter then ever, but I believe that Gordie Howe and Chris Chelios are the only two players to play into their mid-forties. The contract has the NHL concerned because a majority of the money for Kovalchuk is in the first portion of the deal, easing the burden of the salary cap for the Devils. Other teams and general managers will certainly take advantage of this situation too before the current CBA expires.

Do you think that there are too few trades and big-name free agents these days? The July 1 "Free Agent Frenzy" is about to become a thing of the past. In a few years time, all we will be discussing on July 1, is who the Montreal Canadiens signed to wear the Youppi costume, or the fact that the Ottawa Senators have traded Spartacat to Florida.

Perhaps this is the scenario that will encourage the NHLPA to name a new boss. Heading into what could become a very contentious CBA negotiation, the NHL sees a players union without direction, without a leader; a victory in this situation will give them a strong position when they attempt to close this loophole at the bargaining table. It all becomes clearer sometime between now and 5 pm on Monday afternoon, which should make for an interesting weekend for sports columnists.

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