Kovalchuk, Devils Get Contract "Bloch"ed



It took several weeks for Ilya Kovalchuk to finally reach a decision on a contract this summer, and it now appears as if he will need to spend a few more finding a new one. On Monday, independent arbitrator Richard Bloch handed down his ruling in the case between the NHL and the NHLPA/Kovalchuk with regard to the 17-year, $102 million contract the 27-year old Russian winger inked with the New Jersey Devils on July 20. That ruling was in favor of the NHL.

Kovalchuk’s contract is now null and void, meaning he re-enters the unrestricted free agency pool with the option of yet against exploring offers from all NHL (and KHL) teams. The possibility exists that the Devils and he may return to the drawing board and re-structure the contract to be less circumventive. The Los Angeles Kings may also get back into the mix.

To many, this was a surprise decision by Bloch considering the numerous contracts prior to Kovalchuk’s that abused the same loophole as Devils GM Lou Lamoriello to reduce salary cap hits. Marian Hossa, Roberto Luongo and others all have "lifetime" deals that pay them far more money during their prime playing days than those when they are far less likely to even be playing at all.

Bloch, however, found this type of "retirement contract" (as Nick Kypreos puts it) to be the most egregious and agreed with the NHL's agrument, according to Sports Business Journal's Liz Mullen, that the contract is unlikely to reach its conclusion. Even if playing until 44 years of age is possibe,  it is "well beyond the typical retirement age of NHL players," Bloch said, according to Kypreos.

NHL deputy commissioner Bill Daly is happy with the decision and found Bloch's ruling to be "consistent with the league's view of the manner in which the collective bargaining agreement should deal with contracts that circumvent the salary cap."

Meanhwhile, the NHLPA simply expressed it's disappointed with the ruling and is reviewing the decision, according to ESPN’s E.J. Hradek.

There is reason for joy and displeasure on both ends. Kovalchuk's contract was not the first of its kind, with very similar deals passing through the league over the past few years. Hossa's 12-year, $63.3 million contract with the Chicago Blackhawks takes him to 42 years of age and will pay him just $1 million in each of the final four years. Luongo in on Vancouver's books until he is 43 and will earn a totla of $64 million over 12 seasons. Yet, he will  (or will not) see only $7 million total in the last four years. Henrik Zetterberg has $73 million coming his way from the Detroit Red Wings over a 12-year deal. But after making $7 million or more in the first nine years of the contract, he earns only $5.35 million combined between the last three years.

But while those contracts were abusive of the CBA loophole and no doubt circumvent the salary cap in some capacity, they are far less obtrusive as the one dished out to Kovalchuk by New Jersey. Kovalchuk would earn $98.5 million over the first 11 years of that deal and only $3.5 million in the final six. In those last six years, when Kovalchuk would be 38-44 years of age, he would see salaries of $750,000 in 2021-22 and $550,000 from the 2022-23 season through the 2026-27 campaign. It is the longest and most sharply-declined deal to be offered to a single player by any team, and it's all meant to reduce his cap hit to a far more manageable $6 million per season.

And to be completely fair to the NHL, they weren't exactly thrilled with the deals offered to Hossa, Luongo, Zetterberg and the like. This is just the first one they formally challenged as opposed to giving a dirty stare and stern finger pointing by Uncle Gary Bettman.

Now Bettman has some leverage heading into the next round of collective bargaining agreement talks. Instead of just voicing some displeasure with contracts of this nature, he has a ruling on the books that state they are illegal.

As for Kovalchuk's next step, it appears as if the Devils and Kovalchuk are going to begin talks soon enough on a re-structured deal. Lamoriello released a statement via the Devils' website Monday commenting on Bloch's ruling and informing the public that contracts talks with Kovalchuk were resuming.

"We have reviewed and respect Arbitrator Bloch's ruling in the Kovalchuk matter. We also note and appreciate his finding that nothing in his opinion should be read as suggesting that either the club or Ilya Kovalchuk operated in bad faith or on the basis of any assumption other than that the Standard Player Contract was fully compliant with the CBA. That has been our consistent position throughout.


“While we do not currently have a contract with Ilya Kovalchuk, discussions have resumed and we are hopeful that a contract will be reached that meets with the principles in Arbitrator Bloch's award and the NHL's approval."

It's probable that Kovalchuk will inevitably sign a legal contract with the Devils and it may not even have to be that far off from the recently-rejected one. The league may have gotten its way on the 17-year deal with little money in the final six years. But if the Devils and Kovalchuk can ink something more along the lines of what Hossa and Zetterberg agreed to, it will be much tougher for Bettman and Co. to get the deal thrown out.