His critics have sometimes called him "Loophole Lou," but Devils general manager Lou Lamoriello may have lost that nickname now that the NHL has rejected the team's 17-year, $102 million contract with Ilya Kovalchuk.
Lamoriello's biggest mid-summer problems should have been his efforts to complete a trade or two in order to shed some salary, thereby enabling Kovalchuk's mega deal to fit under the team's $59.4 salary cap. Now, he has more headaches because the league believes the Devils stretched Kovalchuk's contract over 17 years solely to "circumvent the cap."
Well, they did. Lamoriello suggested as much during Tuesday's press conference at the Prudential Center. But he thought it was being done legally. Devils management was certain the NHL would offer a "tsk... tsk" and then rubber stamp the contract as it has with other long-term deals in the past.
That did not happen.
A person familiar with the review of Kovalchuk's contract who requested anonymity because he is not authorized to discuss the matter, told The Star-Ledger today the NHL "has never-- in the history of the League-- seen a 17-year deal. We've never approved (a) contract that takes (a) player to age 44. And we've never approved anything as dramatically front-loaded as this contract is."
The Devils celebrated their signing of Kovalchuk with Tuesday's gathering of management, players and others. Now it's all a little embarrassing and the whole situation is overflowing with irony.
First, like many NHL general managers, Lamoriello cannot keep track of all the legal aspects of the current collective bargaining agreement. So he hired Steve Pellegrini to serve as the club's salary cap expert. And Pellegrini is, indeed, an expert since he dealt with the cap while working for the league.
This is also a contract Lamoriello probably would not have done on his own. He surely would've offered less money for fewer years, informing the player and agent that it is a privilege to play for the Devils. But owners Jeff Vanderbeek and Mike Gilfillan have had enough of waiting for another Stanley Cup, struggling to fill the Prudential Center and being an afterthought in the metropolitan hockey market. So they told Lamoriello to spend the money and gave him a little push to do so.
Why did the league reject this contract when other deals with Roberto Luongo, Chris Pronger and Marian Hossa have been approved? They doubt Kovalchuk will fulfill the final years of the contract in which he'd be earning a paltry $550,000.
Kovalchuk would be 44 years old when the contract ends in 2026-027. Others have played at or beyond that age. Chris Chelios was 48 last season and Igor Larionov played for the Devils in 2003-04 past his 43rd birthday.
Although players are capable of playing well into their 40s because of training, diet and other factors, there is less incentive because most of them are wealthy enough to walk away. They don't need the money. By the time Kovalchuk got to the final years of this contract, he'd already have made in the neighborhood of $150 million in his NHL career.
Two more interesting aspects of the rejection:
Lamoriello's own words in which he stated he "might agree" loopholes like this are what is wrong with the CBA could be used against him if the NHL Players' Association files a grievance on behalf of Kovalchuk and an arbitrator makes a ruling.
And, finally, Lamoriello has been known to be a tiger representing the Devils in arbitration cases against players. If a grievance is indeed filed, Lamoriello and the Devils would be hoping for the NHLPA to fight for them.
At this point, the Devils could rework the contract and resubmit it to the league for approval. They might move lower annual salaries into the middle of the contract. Or, in an effort to keep this deal, the NHLPA could file a grievance within five days and put it in the hands of an arbitrator.
If the arbitrator ruled against the contract, Kovalchuk would immediately become an unrestricted free agent once again.
The current CBA expires in September of 2012. Rest assured contracts like this will be a primary topic in upcoming negotiations.
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At 6:29 a.m. today, NHL deputy commissioner Bill Daly released the following statement about the rejection of Kovalchuk's contract on the league's website:
"The contract has been rejected by the League as a circumvention of the Collective Bargaining Agreement. Under the CBA, the contract rejection triggers a number of possible next steps that may be elected by any or each of the NHLPA, the Player and/or the Club. In the interim, the player is not entitled to play under the contract, nor is he entitled to any of the rights and benefits that are provided for thereunder. The League will have no further comment on this matter pending further developments."