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Campbell's Cuts: Kovy contract small price to pay to close CBA loophole

Ken Campbell
By: Ken Campbell
Sep 3, 2010

Ilya Kovalchuk will be back with the Devils after the league approved his 15-year contract Friday. (Getty Images) Author: The Hockey News

News

Campbell's Cuts: Kovy contract small price to pay to close CBA loophole

Ken Campbell
By: Ken Campbell
Sep 3, 2010

When the NHL finally reached a collective bargaining agreement with its players five years ago, not even in its worst nightmare did it envision teams skirting the salary cap by signing star players to front-loaded contracts with double-figure terms.

If it had, it certainly would have done something about it then. So let’s call it an unintended consequence. Not everything can be covered in a CBA - even one that is 454 pages long - and when your so-called partners are intent on circumventing the spirit of the agreement by signing ridiculous deals such as the one the league approved for Ilya Kovalchuk Friday, there’s not much you can do.

A source close to the Kovalchuk contract situation confirmed to THN.com Friday that the league and the NHLPA have agreed to implement new rules governing the parameters of long-term contracts.

In exchange for approving the Kovalchuk contract and not putting limits on the number of years a contract can run, the league will now calculate the value of long-term deals that extend past a player’s 41st birthday differently and there will be no cap benefits past 40 for any player who is signed. In other words, a low salary in the later years of a deal that extend into a player's 40s will not be calculated into the average annual salary of the contract.

If nothing else, this chapter in the NHL’s contractual history proves beyond any doubt that in order for there to actually be something resembling a level playing field, teams must be saved from themselves.

The NHL did that once again Friday, although you’re probably not going to see anyone at the league’s New York head office doing a victory jig over it. It’s the same way a homeowner isn’t exactly dancing in the streets because he plugged a leak shortly after his basement was flooded.

The fact is, even with some clarity on this issue going forward, there will still be a good number of contracts out there that circumvent the spirit of the CBA and will likely come back to haunt the teams that signed them. After all, how could the league possibly be happy when it just approved a contract in which the player receives 90 percent of the total payout in the first two-thirds of the deal?

That the league accepted this sham of a deal indicates how badly it wanted to have this issue put to bed once and for all. Does anyone really believe that Kovalchuk is going to play the last five years of this contract at an average salary of $2 million after making an average of $9 million through the first 10 years of the deal? What the Devils have done with this deal is effectively buy themselves $2.33 million in cap space, since the cap hit through the life of the deal will be $6.67 million. The fact that Kovalchuk will be making an average of 170 percent of that amount in Years 3 through 8 ($11.2 million) and less than 15 percent of it ($1 million) in 2020-21 through 2022-23 makes this whole thing a joke from the word go.

But it appears the league and the players finally have some clarity on these long-term deals and good on them for achieving that. Teams will now no longer be able to use contract years in a players 40s to tank a contracts annual average value for purposes of avoiding the salary cap. The risks of not finding a consensus with the NHL Players’ Association were simply too high. I’m guessing that’s why the NHL held its nose on this deal and will not act on others like it in exchange for coming to an agreement.

So now the Devils get an onerous contract, but if Kovalchuk walks away after the first 10 years with 90 million in his pocket, the Devils avoid having to hang onto a player who will almost certainly be in his declining years. For the present, a left side that has Zach Parise, Kovalchuk, Patrik Elias and possibly Mattias Tedenby certainly looks pretty formidable on paper.

At least now, teams will be able to file contracts knowing whether or not they will pass the smell test with the league. That is, of course, until someone else figures out a way to circumvent the rules that were put in place to help him in the first place.

Ken Campbell, author of the book Habs Heroes, is a senior writer for The Hockey News and a regular contributor to THN.com. His blog appears regularly and his column, Campbell's Cuts, appears Mondays.

For more great profiles, news and views from the world of hockey, subscribe to The Hockey News magazine.

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Campbell's Cuts: Kovy contract small price to pay to close CBA loophole