NHL had to deal carefully with Kovalchuk contract, more notes

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With respect to Sir Walter, I'm not going to say that anyone involved with the Ilya Kovalchuk contract mess and all its ramifications has been practicing deception. Let's just say the matter became an amazingly tangled web.

Let's start with the recent extension.

The Kovalchuk contract was supposed to be dealt with by 5 p.m. on Sept. 1 at the latest. The NHL had received the Devils' new offer to the unrestricted free agent right winger, and it was said to be a tad more in line with what the league was looking for in terms of cash ($100 million) and time (15 years) that do not amount to avoidance of the salary cap. That an arbitrator rejected the first deal (17 years at $102 million) on those grounds was a stunning disappointment for Kovalchuk, his agent, the Devils and the still-leaderless NHL Players Association.

In the process, the arbitrator handed the NHL a hammer, anvil and mighty fire pit of power that the league is using to investigate the signed and reportedly approved contracts of stars like Roberto Luongo, Chris Pronger, Marc Savard and Marian Hossa. But when the recent Kovalchuk decision time came, the league, in somewhat surprising conjunction with the PA, issued a statement that both sides had agreed to a time extension for approval of the new deal. This begat countless questions -- "Why?" is a natural starting point -- and speculation, such as when did this matter become a negotiation and who might be representing the PA in such an undertaking?

Ultimately, the NHL signed off on the new deal by the 5 p.m. on Sept. 3 extended deadline, but virtually no one was talking on or off the record.

On the surface, it appeared that Commissioner Gary Bettman could just keep forcing the Devils (or any team) to come up with a contract that meets his standards and the PA to appeal his rejections. But another appeal could have led to a world of problems for Bettman and the people he mostly represents: NHL owners.

How far was Bettman supposed to go to rein in the Devils? This respected, but financially challenged franchise was trying to make a big splash in a new building in Newark, NJ, and it certainly would benefit from having a superstar forward in its ranks, especially playing in the shadow of the New York Rangers and, to a lesser extent, the Islanders.

Bettman also couldn't ignore Russia's KHL, which was said to have a standing offer on the table that pretty much included all the cash and term that Kovalchuk wanted. The KHL has had some success luring NHL players -- Jaromir Jagr, Evgeni Nabokov, among others. Bettman has to be aware that the NHL is a better league with Kovalchuk in it, especially when he's playing in the New York market. It would have been difficult to explain to fans and owners why he was willing to let a star of that magnitude get away.

That may be why Bettman brought the PA into the agreement about a time extension. If a second contract rejection went to an appeal, Bettman risked undoing everything he'd won when arbitrator Richard Bloch handed him his hammer. It's a given that the NHLPA would have appealed in lightning-like fashion and not allowed Bloch anywhere near the table this time around. That being the case, any gains Bettman made under Bloch's ruling could have been swept away by a different arbitrator considering a third new contact. Surely Bettman realized it was better to negotiate with the PA on the second deal, perhaps giving it something it wants in return for keeping the Bloch decision intact until it's time to negotiate it into the CBA once the current agreement expires. Stay tuned.

Bettman also had to worry about the owners in Vancouver, where the prevailing rumor is that the Luongo contract could be de-registered. In terms of economic sense, that might not be a bad thing for the Canucks, given that the cost of goalie salaries has fallen faster than the perceived commitment of Ice Edge Holdings to buy the Phoenix Coyotes. Yet, should Bettman disallow that contract, the Canucks would still have negotiating rights with Luongo, but very little leverage, given that most free agent goalies have already found places of employment for the upcoming season.

The same result can be said of Ed Snider, the powerful owner of the Philadelphia Flyers, and his team's relationship with Pronger, as well as the even more powerful Bruins owner Jeremy Jacobs, one of Bettman's closest allies. Do the Bruins, looking for a bounce-back season, really want to see Savard's contract taken down with just under three weeks to go before training camp and no quality centers in the free-agent marketplace?

Do the Chicago Blackhawks need to lose Hossa after he's already played a season under an agreement that the league didn't like but approved anyway? Can they afford to lose yet another player after a summer of divestiture like none that's ever been witnessed under the current CBA?

In a word, "no." But there are GMs across the league who do want Bettman to do exactly that. They argue that long-term, high-budget contracts are pretty much the exclusive domain of the wealthiest or, at least, largest markets and they can't compete with such deals even though the CBA was supposed to put an end to such dominance. GMs may not hold the same economic power in Buffalo, Columbus, and South Florida as they do in Boston, Philadelphia or Chicago, but they do have strength in that small-to-midsize markets make up the bulk of the league, and as a group, they want Bettman to act in their best interests as well.

Then there's the PA. Bettman seems to be testing its overall resolve and trying to determine if former Major League Players Association Executive Director Donald Fehr is actually going to be its new boss with the majority of players standing behind him. Fehr is, at the moment, simply an unpaid advisor to the PA. It has been reported that he was directly involved in the Kovalchuk extension, but that's unsubstantiated rumor according to a PA spokesman.

Even if Fehr is simply working behind the scenes, will he show his cards? Will he reveal what, if any, power he might have accumulated while advising an admittedly weak union? Will he take a hardball stance?

All and all, there is a goodly amount at stake for all sides in this matter of big ticket, long-term deals. The league, more so than the PA, needs to get this issue right.

A tangled web indeed.

More proof of entanglement?

Much of the speculative aspects of this story came from the New York Post reporting that the NHL will only accept the revised Kovalchuk offer with certain clauses removed and an upgrade in the overall salary-cap hit. It will back away from invalidating the Luongo, Savard, Pronger and Hossa deals only if the NHLPA agrees to the league's vision of new rules that would put an end to this type of cap-skirting contracts.

The Post also said that if the PA doesn't sign off on what the NHL wants, the league will again reject the newly constructed Kovalchuk deal, immediately invalidate Luongo's contact and take a hard line look at Hossa's as well.

At this writing, no one has been able to verify that, and it seems unlikely anyone will. The PA would likely challenge each rejection with a separate grievance and it's unlikely the NHL wants to get tied up in that. Still, it's an indication of the kind of power play that could be at work behind the scenes. It's certainly getting credence in Vancouver.

We recently speculated in this space that it made perfect sense for the San Jose Sharks to go after Antti Niemi once the Blackhawks walked away from an arbitrator's decision to award the Stanley Cup-winning goalie $2.75 million in a one-year deal. The intriguing part is whether the Sharks intentionally made this happen with an economic power play.

Earlier this offseason, San Jose made an offer for Chicago's restricted free agent defenseman Niklas Hjalmarsson to the tune of $14 million over four seasons. The Blackhawks, already cashed-strapped and dealing off players because of salary cap problems, felt obligated to match the offer and keep the talented Hjalmarsson in the fold, but it was at far more cost than they were hoping to pay at this point in his still-brief career. It was so expensive, in fact, that the Hawks felt they had no choice but to walk away from the Niemi arbitration award and sign veteran goalie Marty Turco for a million dollars less than Niemi would have been paid.

Sharks GM Doug Wilson will no doubt deny it (he denied interest in Niemi after he signed Antero Niittymaki on the first day of free-agency), but in nixing Evgeni Nabokov's request for $6 million per season for each of four seasons, Wilson now has a quality backup in Niittymaki (who can push any starter) and a Cup-winning goalie in Niemi. He did it all without trading a player off his roster and for less than he was paying Nabokov last season. That represents a tremendous swing in the balance of power in the Western Conference and it was done not on the ice, but by prudent salary cap management and a willingness to take a risk.

Lest anyone forget, it was Niemi who stonewalled the Sharks in the Western Conference Final, a performance that carried the young Blackhawks to the Stanley Cup Final where they prevailed over a Philadelphia team that didn't have near the quality of goaltending necessary to beat them.

Nice moves.

Last week we posed this question: Why does the Kovalchuk contract offer fall under "subverting" the intent of the salary cap while Chicago's impending decision to pass goaltender Cristobal Huet's near $6 million hit off to a team in Europe falls under what Bettman calls cap "maintenance"?

A goodly number of you replied via e-mail that it was so obvious it defied my even asking the question. You said that, at the end of the day, Chicago didn't get to use Huet's services while the Devils will have Kovalchuk every day. One reader was kind enough to point out that if I couldn't see that, then I needed to get a new job and "not be the person writing for Sports Illustrated."

With all due respect to all who wrote in, I get the use-no-use argument.

Of course, the Blackhawks don't get the use of a player they have overpaid and didn't even use in the playoffs last spring, while the Devils get Kovalchuk's talent. That's not the issue. The issue is that you can make a case that both teams are circumventing the intent of the salary cap as outlined in the CBA. The Devils attempted to push the Kovalchuk deal over 17 seasons, thereby lessening the overall cap hit and allowing themselves to keep more of their already-under-contract team intact.

A great many NHL GMs would argue that the Blackhawks are attempting to do the same thing. They are willing to eat a contract they can't move and don't want by burying a player overseas. (Lou Lamoriello of the Devils actually opened this door quite a few years back when, in order to get under the cap, he sent all-star forward Alex Mogilny to the AHL in order to create space for others to stay with the NHL club.)

GMs in small and mid-size markets feel that what Chicago is doing is not maintenance, but a circumvention of a different sort that gives them an unfair advantage over smaller market clubs who couldn't have afforded Huet's free agent contract in the first place (let alone that of defenseman Brian Campbell, who set the bar even higher as a signee) and they certainly could never afford to bury that kind of contract in the minor leagues or Europe.

Their argument is that there should never be a distinction between a salary cap "dodge" and what Bettman called "maintenance" because, in essence, they both do the same thing: they reward bigger budget teams with an avenue for burying their mistakes while the smaller market teams can't do the same.

Since the original lockout fight was supposed to be about leveling the financial playing field and putting all teams on an equal competitive footing, where is the relief for smaller market teams? They can't move a bad contract, they can't afford to bury one and, under the current rules, they can't even eat some of it while moving the player to another team. That was a somewhat common practice in the past, but Bettman took that away with the current CBA.

That's what the fight is about, not whether Kovalchuk plays in the NHL and Huet doesn't.

I believe the small and midsize market GMs have a legitimate case.

Finally: It's been published in numerous outlets that Bettman, once the Kovalchuk contract gets done or at least comes to a conclusion be it in Russia or elsewhere, still has to sort out circumvention penalties for the Devils that, under the current CBA, can be extreme. We ask, why?

Arbitrator Bloch went to extraordinary lengths to make certain that, in his eyes and via the strength of his ruling, the Devils did absolutely nothing to circumvent the CBA regarding player contracts. He published whole paragraphs on this issue and noted in his overall ruling that the Devils, in constructing their initial bid, did not violate a single provision of the many rules laid out in the articles of the CBA that deal with circumvention.

In essence, Bloch said the Devils acted quite responsibly in adhering to the letter of the rules. That couldn't have been clearer if Bettman had written the language himself. He might not like what New Jersey owner Jeff Vanderbeek was attempting to do, but you can rest assured that he welcomed the power to negate the contract without having to fine or take away draft picks from one of the 30 principals who happen to pay his substantial salary.

The idea that the Devils are going to be punished is about as realistic as the chances that Bettman will ban fighting from the NHL because it is a violation of the rule book.