Wednesday, July 21, 2010
NHL rejects Kovalchuk deal
ESPN.com news services
The NHL rejected Ilya Kovalchuk's 17-year, $102 million contract with the New Jersey Devils because it circumvents the league's salary cap, the league announced Wednesday.
"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," NHL deputy commissioner Bill Daly said in a statement. "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."
The contract was rejected because years of low salary at the end of the contract were added for the sole purpose of lowering the cap hit, a person familiar with the issues raised told The Associated Press. The person added that no side believes Kovalchuk will play the final years of the deal at those terms.
The star forward was slated to earn only $550,000 in each of the last five seasons of the contract, which was to run through the 2026-27 season -- when Kovalchuk would be 44.
Kovalchuk was to earn $98.5 million of the $102 million in the first 11 years of the deal.
"We are extremely disappointed that the NHL has decided to reject the contract of Ilya
Kovalchuk," Devils president and general manager Lou Lamoriello said in a statement. "The contract complies with the terms of the Collective Bargaining Agreement. We will have no further comment until the process outlined in the CBA is complete."
Kovalchuk's agent, Jay Grossman, did not comment after the contract was rejected.
Further muddying the waters surrounding the rejection, a source told ESPN.com on Wednesday morning that Lamoriello was aware of the league's plans to deny the deal prior to Tuesday afternoon's news conference in Newark announcing the signing.
The news conference, attended by Lamoriello, Kovalchuk, coach John MacLean and a number of Devils players, went ahead without any suggestion the deal was in jeopardy.
"There is nothing that we have done wrong," Lamoriello said Tuesday. "This is within the rules. This is in the CBA. There are precedents that have been set. But I would agree we shouldn't have these. I'm also saying that because it's legal and this is something that ownership felt comfortable doing for the right reasons."
The NHLPA will have five days from Wednesday to file a grievance on the matter. If it does, an arbitrator who is familiar with the collective bargaining agreement and agreed upon by both the league and the players' union will determine whether the league's rejection of the contract was valid.
The arbitrator would have 48 hours to decide whether the league was right to reject the contract. If the arbitrator agrees, the contract would be voided, and Kovalchuk again would be an unrestricted free agent.
Kovalchuk would also become an unrestricted free agent should the NHLPA decide not to file a grievance and if he and the Devils aren't able to rework a deal to the NHL's satisfaction.
"The NHLPA is currently analyzing the basis upon which the NHL rejected the contract between the New Jersey Devils and Ilya Kovalchuk," union spokesman Jonathan Weatherdon said in a statement. "We are evaluating the options available to us under the terms established in the CBA."
Kovalchuk's contract would have topped the 15-year deal goalie Rick DiPietro got from the New York Islanders and two-time NHL MVP Alex Ovechkin's 13-year pact with the Washington Capitals.
Kovalchuk was to earn $6 million each of the next two seasons; $11.5 million for the following five seasons; $10.5 million in the 2017-18 season; $8.5 million for the 2018-19 season; $6.5 million in 2019-20; $3.5 million in 2020-21; $750,000 the following season; and $550,000 for the final five years of the unprecedented deal.
The Devils would have absorbed an annual salary cap hit of $6 million -- the average amount per season. That number was brought down because of the extended years with low salary at the end of the deal.
Whether he and the Devils can get together on a new deal remains to be seen. The Los Angeles Kings and Russia's KHL also were interested in signing Kovalchuk before he reached agreement with the Devils two weeks into the free-agent shopping season.
Few expected that New Jersey would break from tradition of not handing out long-term contracts that have become popular in the NHL since the lockout ended in 2005 and the salary cap era began. Now that the Devils did that, their efforts quickly failed.
Kovalchuk's time with the Thrashers (more than seven seasons) ended once he rejected a 12-year, $101 million extension with Atlanta, which traded him in early February to the Devils in a five-player deal.
He totaled 41 goals and 44 assists last season when he earned $7.5 million, but posted only 10 goals and 17 assists with the Devils.
Kovalchuk had two goals and four assists during New Jersey's five-game, first-round playoff loss to the Philadelphia Flyers.
Information from ESPN.com's Scott Burnside and The Associated Press contributed to this report.