The cost of signing Ilya Kovalchuk ended up being far more than the New Jersey Devils could ever have imagined.
A saga that dragged through the summer had one final twist Monday night as the NHL came down hard on the Devils for trying to circumvent the salary cap. The league handed the team a US$3-million fine and docked it two high draft choices.
The punishment stems from the Kovalchuk contract that was submitted to the league in July.
Arbitrator Richard Bloch ruled the $102-million, 17-year deal was an attempt to get around the salary cap. The contract was to last until Kovalchuk's 44th birthday and featured a number of years at a reduced salary towards the end.
As a result, the Devils will pay a hefty fine and forfeit their third-round draft pick in 2011 and a first-round selection in one of the next four drafts. New Jersey has the option to choose which draft.
The team has maintained it never intentionally tried to get around the salary cap and reiterated that stance in the wake of Monday's announcement. The Devils have the right to appeal the punishment to the NHL's board of governors—who meet Tuesday in New York—but it wasn't immediately clear if they intended to do so.
"We were today advised of the ruling by the commissioner with respect to the Kovalchuk matter," Devils general manager Lou Lamoriello said in a statement. "We disagree with the decision. We acted in good faith and did nothing wrong. We will have no further comment."
In issuing its ruling, the NHL said it considers the matter closed.
The Devils and Kovalchuk ultimately had a revamped $100-million, 15-year contract approved earlier this month. That came after the NHL and NHL Players' Association agreed to amend the collective bargaining agreement with changes governing future long-term deals.
The Russian winger is one of the league's premier scorers, but he's come at a massive price for the Devils. In addition to handing him a big contract and enduring the NHL's heavy punishment, New Jersey still needs to make some personnel decisions to get under the $59.4-million cap—likely having to unload a player or two before the season begins next month.
The Devils also gave up a big package to acquire Kovalchuk from Atlanta in February. They sent a 2010 first-round pick, forward Niclas Bergfors, defenceman Johnny Oduya and prospect Patrice Cormier to the Thrashers for Kovalchuk and defenceman Anssi Salmela.
It leaves the 27-year-old with a lot to prove.
The punishment handed down on Monday is the stiffest the league has dished out since the salary cap was instituted coming out of the 2004-05 lockout. While such penalties are rare, they're not entirely unprecedented—in April 2009, the Toronto Maple Leafs were fined $500,000 and surrendered a fourth-round pick after helping defenceman Jonas Frogren buy his way out of a contract in Sweden.