Per NHL.com, systems arbitrator Richard Bloch has rendered his decision on whether the 17-year $102 million contract that the New Jersey Devils gave Ilya Kovalchuk fit within the rules of the current Collective Bargaining Agreement. Bloch has sided with the NHL's claim that the contract given to Kovalchuk violated the terms of the CBA's "non-exhaustive list" of means of salary cap circumvention by artificially lowering the calculated cap hit through adding years at low pay to the end of the contract when a player is expected to retire and have his cap hit come off the team's books.
At its heart, this was an argument between the kid sitting in the principal's office claiming that the teacher's written rules say they're not allowed to chew gum but doesn't mention anything about chewing Starburst and the teacher who changes the rules on a whim and makes the other kids wonder whether there's an ulterior motive when the rules seem to apply differently to different children. Both sides are wrong here; I just think the arbitrator ruled in favor of the side that was more wrong. To be perfectly clear, yes, the Kovalchuk contract was a farce, Lou Lamoriello said so himself. In a way that other contracts arguably tiptoed around better, this contract tried ripping the face off the "Spirit of the CBA" in a way that would make Velma from Scooby Doo gasp. The contract highlighted the issue of teams with more money having more flexibility to keep players and it made it so that one player was having a larger affect on his fellow players' escrow dollars than any one person should. However, I think the fallout from the decision sets a precedent that isn't good for the game.
First, if you're wondering what the decision means to contracts already signed by Henrik Zetterberg, Johan Franzen, Roberto Luongo, Marian Hossa or others, then let me tell you this: it means nothing. While this arbitrator's decision means that teams will have to be more careful about how they structure long contracts in the next two years before a new CBA is formed, it should not endanger current contracts. The league's argument against Kovalchuk's deal is based on vague wording of the CBA. While I'm surprised at Mr. Bloch's decision in this case, I would be more dumbfounded than an Avalanche fan trying to work a broken escalator if any arbitrator in the future oversaw proceedings where the league tries to argue their way out of accepting a contract that they didn't deny when it was first signed.
The second question is about what the league will do to the parties involved. The CBA lays out a guideline for punishments for those who circumvent the cap, as is the case here. Fortunately, this is written into the CBA the same way the league's rules about suspensions are written. There's more than enough leeway to punish nobody and I believe that's what's most likely to happen (second-most likely is a ridiculously small token wrist-slap much like the league levied against Ron Wilson when the Leafs were accused of tampering with the Sedins last year). While the league has the authority to fine Kovalchuk, the Devils, Lou Lamoriello, or basically anybody else involved in this deal or to take away draft picks, I sincerely doubt that Lou Lamoriello or his club, which have been strong supporters of the league in past decisions will see any meaningful lightening of their pockets. The league isn't dumb enough to rub it in by fining Kovalchuk for this either, knowing full well that reaction to something like that would fall somewhere between a collective facepalm by everybody watching and a full-out riot the likes of which haven't been seen since Montreal won their last playoff game. If anybody's likely to end up in hot water over this, it will be Kovalchuk's agent, Jay Grossman, who seemingly would make a good whipping boy.
I worry though that the league has now been given the vague latitude that they enjoy so much when dealing with these kinds of issues. We know that they broke the rules when signing Kovy, but we have no idea by how much. If the Devils tried cutting one year off the deal, would it still be a violation? What about two years? How many years off of a deal that otherwise follows all written rules do we need to cut before it's not a retirement contract that doesn't violate the spirit of the cap, but rewards a player for his commitment to one team? Without these specific written guidelines, teams and players will now have to take a guess as to whether the league will allow it. The Hossa deal is by and large the most similar, so is that now the maximum or would the league challenge one exactly like it? Sure, a team could register a contract with confidence knowing a deal exactly like Hossa's would stand a much better chance of garnering a favorable decision by an arbitrator, but who wants to go through that kind of ordeal? The Devils have essentially been handcuffed for the last two weeks for roster decisions pending the resolution of this issue. The teams and the players should have a right to know exactly what they're allowed to do. Rest assured that this issue will be locked down tighter than Kyle Wellwood's corset when the next CBA gets hammered out. In the meantime, I feel badly for any upcoming free agent who wants to find a way to take slightly less pay to stick with a competitive team he loves by committing to them long-term.