Monday, August 9, 2010

Arbitrator Richard Bloch Has Made His Decision In The Kovalchuk Case!! UPDATED!!!

Richard Bloch the arbitrator in the Ilya Kovalchuk arbitration hearing has finally announced his decision in the case. He has sided with the NHL and decided to reject the 17 year Ilya Kovalchuk contract.

The NHL Official statement from "We want to thank Arbitrator Bloch for his prompt resolution of a complex issue. His ruling is consistent with the League's view of the manner in which the Collective Bargaining Agreement should deal with contracts that circumvent the Salary Cap."

Arbitrator Bloch: "this is a retirement contract" "well beyond the typical retirement age for NHL players" per @RealKyper...

The NHLPA: “The NHLPA is disappointed with the Arbitrator’s ruling to uphold the NHL’s rejection of the contract between the New Jersey Devils and Ilya Kovalchuk.  The NHLPA is currently reviewing the decision and will have no further comment at this time.”
Lou Lamoriello “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."

Excerpts from arbitrator Richard Bloch's ruling, obtained by   "In this case, the record strongly supports the claim this contract is "intended to, or has the effect" of defeating or circumventing the Salary Cap provisions of the CBA. The overall structure of this SPC reflects not so much the hope that Mr. Kovalchuk will be playing in those advanced years, but rather the expectation that he will not. This is a long contract --17 years -- the longest in NHL history. That, in itself, poses no contractual problem, for the reasons discussed above. But Kovalchuk is 27 years old, and the agreement contemplates his playing until just short of his 44th birthday. That is not impossible, but it is, at the least, markedly rare. Currently, only one player in the League has played past 43and, over the past 20 years only 6 of some 3400 players have played to 42...."

More from the report regarding finances:  "...The dynamics of this SPC, with particular reference to its final six years, are such that there is scarce reason for either Player or Club to continue the relationship. The incentives are strongly to the contrary. By year 11, the Player will have received $98,000,000 of his $102,000,000 contract, constituting some 97% of the bargain. One may reasonably ask, as the League does, whether a player who had been averaging some $9,000,000 a year will be satisfied to continue the rigors of an NHL season for a salary that (1) will average slightly more than $550,000 a year, (2) will represent a 95% reduction against previous average earnings and (3) will undoubtedly constitute compensation well below the then-applicable major league minimum. The economic incentives are not limited to issues of the Player's preferences, alone. During the final six years, the comprehensive "No Move" restriction will have been reduced to a "No Trade" clause. This additional flexibility will allow the Club to, for example, place the Player on waivers or send him to the minors. Here again, one may reasonably ask whether this Player would, at that point, accept such repositioning as an alternative to seeking continued employment outside the League or simply retiring."

The conclusion:  "...the System Arbitrator here concludes the SPC terms themselves demonstrate this agreement 'has the effect of defeating' the provisions of the CBA, with particular reference to the Team Payroll Range language. For these reasons, the finding is that the League has sustained its burden of demonstrating its actions in rejecting the agreement were in accordance with the bargained authority under Section 11.6(a)(i). Accordingly, the grievance protesting that action will be denied."

Join me after this for more on the Kovalchuk news and my thoughts....

Kovalchuk originally agreed to a 17 year/ $102M contract with the Devils back on July 19th. Then the Devils went ahead and held a press conference the next day to announce the signing. Things turned quickly as Gary Bettman and the NHL decided to reject the 17 year deal. The main issue with the contract was cap circumvention. In the contract Kovalchuk would be making the league minimum over the last seven years after making $90M over the first ten years. Kovalchuk could retire after the first ten years and still have made over $90M. But his cap hit will not be the $9M he was making but the average of the contract which would be $6M. So the NHL considered it cap circumvention believing he would not play the final seven years and the length was just to lessen the cap hit. But on July 26th the NHLPA officially filed a grievance.
The Arbitration Hearing started last Wednesday August 4th and ended the next day. Bloch waited until today to announce his final decision. The main issues the NHL had in winning this case were, they did not have any proof the Devils were circumventing the cap and players value does drop as they get older and Mark Recchi a former all-star is 42 and currently making $1M this upcoming season. Also the NHL has let similar deals go through in the past like the Hossa and Franzen deals, which will definitely be brought up. Most are saying the NHL really had no case unless there is some underlying information they have that fans and reporters do not no about yet. Well maybe there was because Mr. Bloch denied the deal to go through.

Most expected the deal to be upheld but there was still a mystery hanging over the situation so most were still wondering what the answer would be.  And I guess with good reason as the rejection was upheld and what many were surprised as many believed the NHL had no case. With the announcement that the rejection has been upheld, the question arises, When will this end? This Kovalchuk non-sense has gone on for to long but it will continue.

To be honest I am not really sure if this is good or bad. Kovalchuk started off slow but then picked up the pace and finished with 10 goals and 27 points in 27 games and 2 goals and 6 points in 5 playoff games.  He did not play well in the playoffs and the Devils would have been stuck with his contract for 17 years unless he retired and a lot can happen in 17 years so this could have been good for the Rangers!

In the end I see him working out a deal with Devils but it could have been all over with today.  We will just have to wait and see where he goes to play to see the outcome of today's ruling.  The Kings, Rangers and probably even the Islanders are all possible locations but after this whole ordeal, he will most likely stay a Devil just with a different contract. 

I just hope Glen Sather does not do something stupid in a last ditch effort to clear cap space to go and sign Kovalchuk as I believe he is not what we need.  We need to build around Lundqvist, and our young core of players and do not need to go out and spend big money on Kovalchuk.

No matter what this will lead to a huge battle during the new CBA meetings but the NHL has a leg up now that they won this case.  Hopefully all this does not lead to another lockout....

No comments:

Post a Comment