Big contracts could take hit in new CBA
Let’s start with the suggestion the New Jersey Devils, not exactly an NHL squad flush with cash these days, might yet be penalized more for the controversial Ilya Kovalchuk contract.
Huh? Weren’t they already fined $3 million (all figures U.S.) and stripped of a first-round pick and a third-rounder for trying to circumvent the NHL’s salary cap system with a 17-year, $102 million contract offer to Kovalchuk back in 2010?
And didn’t the NHL eventually approve an altered $100 million deal over 15 years? Correct on both counts. But commissioner Gary Bettman has warned teams over and over in recent years that they might eventually find themselves painted into a painful corner by the LTBD (Long Term Backsliding Deals) that a minority of NHL clubs have used to get players under contract while playing with the numbers to achieve an advantageous salary cap hit.
And based on what the owners have offered the NHL Players’ Association, that may yet happen.
It’s believed that in their last offer the owners included an intriguing clause under which teams would carry the full hit of the salary cap hit from these LTBD contracts for the entire length of the agreement.
So retirement would not get teams off the hook, and many GMs believe many of these fishy deals have come with a wink-wink deal that the player will retire in the final years when the pay decreases.
At this point, the NHL wants to slam that door shut.
In Kovalchuk’s case, then, in the next five years he will draw a salary of $11 million, then $11.3 million for two seasons, then $11.6 million and then $11.8 million.
With a cap hit of only $6.67 million, this is helpful math for the Devils.
In the final five years, Kovalchuk nets a total of only $10 million, and he’ll be 42 when the contract expires. So the whispers have always been that rather than suffer the indignity of playing for $1 million in 2020-21, he’ll pack it in and the Devils will happily say buh-bye to the $6.67 million cap hit for the final five years of the contract and spend it on other players.
Not so fast, the NHL is now saying. Under the current proposal, that full $6.67 million cap hit would continue to the end of the deal even if Kovalchuk doesn’t play.
So the math gets less helpful in a hurry.
It’s not just Kovalchuk, of course. All the long-term deals that conclude with much smaller salaries would theoretically be impacted. Like Marian Hossa’s with Chicago, which has a $5.25 million cap hit but pays out only $1 million in each of the final four years.
Or Henrik Zetterberg’s deal with Detroit, which pays out a total of $5.25 million in the final three years. Or Roberto Luongo’s arrangement with Vancouver, which pays a total of $7 million for the final four years when Luongo is between the ages of 39 and 43.
If there’s no takers for Luongo’s contract now, imagine how the market will freeze up if teams know that they’ll also be liable for the full $5.33 million cap hit even after Luongo is almost certainly retired.
Some teams are pushing hard for changes that would affect these types of contracts retroactively, one area of the CBA talks in which the owners aren’t in unanimous agreement. Most of the teams that have signed LTBD contracts are the rich ones, so maybe they’ll insist the rules stay the same and when a final deal is signed this proposal will be off the table. Or maybe not. Or maybe other punitive rules could be in place.
For example, there’s a suggestion that these kinds of contracts should come with a direct relationship between salary and cap hit.
So Kovalchuk’s cap hit would be $11 million this season, rather than the more convenient $6.67 million. Hossa’s would be $7.9 million rather than the current $5.25 million. Luongo’s would be $6.716 million rather than $5.33 million.
Or, perhaps there would be blended cap hit for certain kinds of long-term deals. Perhaps an average of the five highest-salaried years. Anything is possible. Until now, the belief has been the NHL only wanted to limit term for future contracts, perhaps to six years or something fixed. That belief spurred the blizzard of longterm deals signed before the lockout began.
But it now seems, with hard negotiations with the union yet to come, the league hasn’t forgotten the deals like Kovalchuk’s, and still wants to tell those teams it warned that they should have listened.
The players won’t like it. Some teams surely won’t.
But the Bettman administration has a long, long memory and has shown in the past it has no compunction about making new CBA rules affect old contracts.
Even contracts owned by the biggest stars in the sport.