Manipulation vs. Investment: Why the Caps are Kosher
by Becca H on Jul 21, 2010 12:30 PM EDT
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PrintThere's nothing like a front-loaded, long-term deal to get tongues wagging around the NHL, and people inside the League and out have had plenty to talk about in recent years. Are they unfair? Is it legal under the current CBA? Can Chris Pronger really be expected to play until he's 42?
And yet none has raised as many eyebrows as Ilya Kovalchuk's new deal that would keep him in Newark for the next seventeen years. The complex, multi-tiered contract presented to Kovalchuk by the Devils calls for a maximum salary of $11.5 million before plummeting to below a million for each of the last six years. The cap hit for the Devils? A fiscally sound $6 million a year. Forget raised eyebrows, this behemoth of a contract raised some red flags at the NHL's front office:
The contract has been rejected by the League as a circumvention of the Collective Bargaining Agreement. 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
It's certainly not surprising that the League chose to step in, given the somewhat questionable structure of the deal and how blatantly it attempts to dodge the "spirit" of the salary cap. And it's equally unsurprising that this contract has returned our attention to those that have come before, from the Prongers to the Marian Hossas and everything in between.
What is surprising is how frequently the names Alex Ovechkin and Nicklas Backstrom are coming up in the same breath as, for example, Roberto Luongo. Whether it's ignorance or simple laziness, the recent deals inked for each of the young Caps are being lumped in with every front-loaded contract that won't expire until the player in question is rocking adult diapers - regardless of the fact that the deals are in no way related.
First and foremost there's the obvious point that neither Backstrom's deal nor Ovechkin's is front-loaded in an attempt to garner a more favorable salary cap. Quite the opposite, in fact. Backstrom will start with a salary of $6 million and see it increase gradually to a maximum of $8 million - in the final year of his contract. Ovechkin, meanwhile, will get a moderate $1 million raise (from $9 million to $10 million) in 2014-15 but will collect the same paycheck every year until the contract expires in 2021.
By contrast, if the Kovalchuk deal is allowed to stand he will collect $98.5 million of the total $102 million, or almost 97% of the total value, in the first eleven years of the contract - with six more years remaining to pick up just $3.5 million.
Yup, that's what some would call "front-loaded".
It's not just money that separates the Backstroms and Ovechkins from the Kovalchuks, of course. Also of issue is the length of term - or to put it more bluntly, how freakin' old will this guy be when his contract expires?
The seventeen year deal means that 27-year-old Ilya Kovalchuk will be under contract until he's 44. And while Chris Chelios has taught us nothing if not the fact that age is merely a number, the reality is there just aren't many guys who are able to play into their 40s - and those that do have to prove they can still play before earning a new contract. Kovalchuk could very well play until he's 44, but the contract is likely structured under the assumption that he will retire before the end of or upon completion of his deal.
Meanwhile here in Washington, Ovechkin and Backstrom are signed until they are 36 and 32, respectively. Plenty of viable playing years left, as the Boss himself pointed out:
"I did a long-term deal with Alex Ovechkin when he was 22 or 23 years old and he'll be coming off it when he's 36, and it's a straight line for his salary-cap hit. And the way this deal was structured it makes the salary cap hit different, and maybe not appropriate."
Time will tell if the Kovalchuk deal is allowed to stand. Greater minds and cooler heads (or just a pack of lawyers) will examine the CBA and determine if there's been any wrongdoing on the part of the player, the agent or the team. And this will certainly be a topic of discussion between the NHL and the NHLPA leading up to the next CBA, as well as among fans and media members alike during and after said negotiations.
But discussion of loopholes and cap-friendly deals should stop at the Potomac River's edge, because the Caps didn't lock up Ovechkin and Backstrom long-term to circumvent anything or dramatically alleviate the cap hit. They did so because the team believes they are core players and will be for the foreseeable future. They did so at or in the neighborhood of market value for comparable players, and over the course of the entire contract - unlike Kovalchuk, who if he even gets to the final six years will almost certainly be well below market value.
It wasn't a manipulation but an investment, a sign that these are their guys going forward. And it doesn't take a pack of lawyers - or a rabbi - to tell us that it was all completely kosher.
Major h/t to capgeek.com for continuing to be a resource of awe-inspiring magnitude, and for providing the details of the Kovalchuk, Ovechkin and Backstrom deals.
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Every day that goes by, the Backstrom deal makes me smile more and more.
Eat, drink, and be merry! And then drink some more.
by SmallZ827 on Jul 21, 2010 12:34 PM EDT reply actions 2 recs
Manipulation vs Investment...
Or, High School vs College.
Was it over when the Germans bombed Pearl Harbor?
Poor Wysh and his Devils:
http://sports.yahoo.com/nhl/blog/puck_daddy/post/NHL-declares-hypocritical-political-war-with-Ko?urn=nhl,257340
"It's always good to have vikings."
Proud member of the Oxford dictionary police.
And conversely, let’s stop sugar-coating what Lamarillo did. It’s not circumventing, it’s cheating. He tried to manipulate the system to get a lower cap hit knowing all the while those last few years would never be honored. Sometimes I think Lou really does believe he’s above the NHL when it comes to following the rules.
There’s no way that they can’t say this doesn’t violate the spirit of the CBA. Whether it was actually bad faith i’m sure we’ll find out, best you can do now is hope.
Otherwise we’re looking to see Semin re-signed with a 74 year deal valued at $55m. No way every other team doesn’t start gaming the system and no matter how principled Leonsis is, he’ll be forced into it too.
All the king's horses and all the king's men
Couldn't put Humpty together again
No, no, this time I’m going for gratuitous praise from GMGM :D I think he shall start a blog JUST to praise me.
by Becca H on Jul 21, 2010 12:55 PM EDT up reply actions 1 recs
The Larry Bird Exception makes sense in the NHL
Kovalchuk is a durable, productive superstar and NJ has the right retain him. The Bird exception provides a perfectly acceptable solution for re-signing him, and the NHL would be wise to include as part of the next CBA.
Discuss.
I like the idea of a Larry Bird rule, but not for NJD to be able to apply to Kovy. He’s not a part of their team so why should they get the discount? He played there for 3 months. ATL should have gotten it, but not NJD.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
If the Bird exception was in place, Kovy would still be a Thrasher. But Bird rights are traded away along with the contract, in the NBA, so if the proviso had been in place, and ATL made the trade, NJ would have his Bird rights.
I don’t like trading the Bird rights. I would make it a strict homegrown application. And Kovy would only be a Thrasher if he wanted to be, which he clearly didn’t. They offered him the money, he just didn’t want to be there. Under my formulation of the Bird Rule Kovy still has the option, the consequence would have just been that ATL would have taken less of a cap hit if Kovy stayed.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
How do you take that advantage away? Unless you set the cap and the floor at the same price, or within a very narrow band, you have that. It’s just reality. I prefer a discount for homegrown players because it rewards teams for drafting and developing. I don’t think it needs to be a large discount, maybe just 10%, but it allows teams to keep players if they legitimately have them in their plans. It amounts to a right of first refusal for your own developed talent as long as you think they are in your plans. If someone offers Mike Green 6 Million, the Caps can either match and take less of the cap hit (in which case Green decides where he wants to play) or the Caps can offer between 6 mill and 6.6 mill and suffer the same or lower cap consequences than the prospective poacher.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
You’ll never be able to take the advantage away, and to try would be an exercise in futility, but you still try to mitigate it.
I could live with a 10% discount, but a full exemption is just too much in my book. It’d give the Capitals an additional $16M+ in cap space, for example, and that just doesn’t seem fair.
Full exemption is definitely out of control. I just want to give the teams a little more ability to keep the core group that they developed together. Fans love that, and from a fairness perspective it’s tough to watch one team develop a player and then have another team poach them right when they are reaching their peak years.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
Pardon my ignorance, but what is the Larry Bird Exception. I can guess but figured I would ask anyway.
Beards are the zenith of manliness. First, they are scratchy and unpleasant to womenfolk. Second, they look awesome. Third, if you have something tasty for lunch, you can enjoy the smell all the way until dinnertime. - RMNB
The NBA allows teams to go over the cap to re-sign their own guys.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
I think there are a few other ways to get over the cap in the NBA as well. I think if you take on salary as part of a trade you can go over.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
The NBA has a Tomas Fleischmann?
Japers' Rink: Hockey blogging from the most powerful city in the world
by J.P. on Jul 21, 2010 1:13 PM EDT up reply actions 8 recs
I recommended that long before the lockout, but one practical problem with it in hindsight is that teams that for economic reasons have trouble struggling to the salary floor is that they can’t afford the exception. You still might have some teams being the functional equivalent of the KC Royals in baseball — farm teams for other clubs, who can sign a big FA from another team AND their own exception.
If you've read this far...seek help.
Whether it’s ignorance or simple laziness, the recent deals inked for each of the young Caps are being lumped in with every front-loaded contract that won’t expire until the player in question is rocking adult diapers – regardless of the fact that the deals are in no way related.
There’s a ton of ignorance on this subject, and I hate to point fingers, but it’s mostly coming from Devils fans. I really don’t think there’s a comparable contract to Kovy’s.
Nice article Becca.
Hockey Blogger at Pensburgh.com
I think a lot of Devils fans were really excited about this, and rightly so, to the point where sometimes logic takes a backseat. That I almost understand, because as a fan you so badly want to believe that your team is one of the “good guys” and didn’t just monumentally screw you over in some way or another.
But I hate when people are so single-minded – and by this I mean fans from all teams who have discussed this contract – that all they do is look at a list of long-term contracts and don’t bother to investigate further. Even putting DiPietro’s contract into the mix is wrong, isn’t it? A quick capgeek check tells me that he’ll make $4.5 million a year, every year until the end of his contract (or until the end of time, whichever comes first).
And thank you :)
Even putting DiPietro’s contract into the mix is wrong, isn’t it?
Absolutely. People think the NHL cares about the length of the contract, though it doesn’t. They only care about the salary structure. If you want to sign a guy for 15 years to $4.5M a year, there shouldn’t be any problem whatsoever. Throwing his name (or Backstrom’s for that matter) into the conversation is ignorant.
Hockey Blogger at Pensburgh.com
That’s not entirely true. For the cap purposes the issue is the salary structure, but even when NYI signed DiPietro Bettman tried to talk them out of it (twice). It wasn’t a cap manipulation issue, but he didn’t like the idea of a decade-plus contract from the start.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
I think it’s both, though the incentive for the player to not retire at a predetermined time is obviously far more powerful when you have big contractually guaranteed money on the back end. Getting rid of or nerfing the ability to have wide-ranging salary structure will help more than any other one fix, though.
Yea, but I think the NHL would be completely fine with contracts structured like DiPietro’s. I mean, I don’t see how anyone can be upset at that payment schedule.
Hockey Blogger at Pensburgh.com
I agree, unless there’s a risk that the player has agreed to retire at a certain time. More money on the back end makes it unlikely that the player will walk away, though, and probably would protect against any challenge without a true “smoking gun” (documented agreement) or a patently absurd contract (like a 25 year deal).
You don’t think a 17 year contract, that will terminate when the player is 44, and which has 6 years of term at the minimum salary tacked on to it, is ludicrous on its face?
I do. This one just doesn’t pass the sniff test.
Was it over when the Germans bombed Pearl Harbor?
I do, but I thought some of the other ones were similarly ludicrous if trying to circumvent/manipulate the cap is against the rules. As is often the case with the wheel of justice, what upsets me about the NHL’s approach is the inconsistency, not that they’re taking protective action in this instance.
I was referring here, though, to the efficacy of a hypothetical rule change requiring flat (or flatter) payment schedules to get rid of this phenomenon.
I think a lot of Devils fans were really excited about this, and rightly so, to the point where sometimes logic takes a backseat.
Yeah, like this one time there was this Penguins fan on here insisting that the ESPYs are just as important as the postseason trophy and that the votes of a bunch of ignorant ESPN fans were conclusive proof that Sidney Crosby was the NHL’s best player last year. I mean, how crazy is that?
Oh, hi there GP…
…
…
how’s the offseason treating you?
Atta dinnin stick a who!
by Gould Old Days on Jul 21, 2010 4:15 PM EDT up reply actions 7 recs
Rectacular.
On the Forecheck: preaching the Predators' gospel to the unwashed masses.
by Chris Burton on Jul 21, 2010 5:51 PM EDT up reply actions
(just to be clear GP, I was totally giving you a hard time. Yes, I know that’s not what you were saying)
Atta dinnin stick a who!
by Gould Old Days on Jul 21, 2010 6:01 PM EDT up reply actions 1 recs
Not for nothin'
But if they would have done 15/101 they would have been fine. Making it 17 years an obvious tribute to his number was a really big show of hubris.
Players, agents, and GM’s are the only ones with egos.
Further muddying the waters surrounding the rejection, a source told ESPN.com Wednesday morning that Devils president and general manager Lou 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.”
I get this weird sense that Lamoriello, who has long been against these front-loaded contracts, decided to go ahead with the whole thing to a) show his owner that he’s a moron for pushing the issue when Lou’s been so vocal in opposition and b) forcing the League to finally crack down on it.
…just one gal’s opinion.
Not just yours. I suggested the same thing in the Caps Clips. Taking off the two final years probably makes the contract ok, and doesn’t change the cap hit a huge amount. I think he knew full well that putting all those minimum salary years was going to draw scrutiny.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
I don’t know if you saw it at Behind the net, but someone brought up a really interesting point that the league minimum Kovy would be scheduled to make might not be even league minimum in 4-6 years due to inflation adjustments.
Hockey Blogger at Pensburgh.com
Yeah, I’ve had one eye on that thread. It was an interesting point and I wonder how much that was a factor.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
Are the final years on Kovy’s deal, as written now, less than the minimum as it currently sits? Or do we just “know” that the minimum will be higher by the time he gets to the tack-on years?
Was it over when the Germans bombed Pearl Harbor?
It’s that last part that gets me:
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.
He’s basically saying “yeah, these are technically legal – see why that’s stupid? See what I did?”
Owners have been shown to be morons long before this , Becca. After all, it only takes one to upset the applecart and offer stoopid terms/money.
We lost a year of hockey for this bullshit.
Oh, no doubt. And even the smartest owners can have moments of moronic behavior (see: Ted’s determination to give Jagr that huge contract) – I just think Lou had to know it could be rejected by the League and wanted it to be so his owner would back off.
And yeah, we did lose a year…and could lose another. Makes me incredibly nervous to hear any talk of contracts being overturned, the PA possibly filing grievances,etc.
Count on them filing a grievance. That’s the one thing Kelly and the Lindros-Hargrove-Penny (et al) junta seemed to agree on last year, and has presumably not changed since Kelly got forced out.
Related: The tinfoil hat on my head makes me wonder if this isn’t some way by the League to gauge how the PA will be in CBA talks by seeing how they’d mobilize on this.
And I thought Tom Soehn was a shitty coach.
by Bald Pollack on Jul 21, 2010 1:38 PM EDT up reply actions
I don’t see the tinfoil. I do see where there has been some talk like that around. If the PA files a grievance, someone needs to mobilize the peons who make realtive crap compared to the Kovalchuks of the league. Otherwise, they’re going to get exactly what they deserve and we will lose another year of hockey.
"It's always good to have vikings."
Proud member of the Oxford dictionary police.
This makes me extremely angry if true. There are a couple of words that come to mind. Insubordination. Disloyalty. As an employee, you should resign before knowingly permitting your employer to do something like this, to go through something like this. The proper response is “if you really want to go through with that, I can’t stop you, but I won’t be there.” If he really sat in a press conference welcoming Kovalchuk when he knew the league was about to quash the deal, well, that’s just terrible.
Atta dinnin stick a who!
by Gould Old Days on Jul 21, 2010 6:05 PM EDT up reply actions
Completely agree. I’m sure Lou won’t get fired for it, but this is damn close to tempting your boss to fire you. If NJD did fire him things would be in shambles, but I don’t know how you keep a working relationship after something like this (if true, obviously). Maybe the owners turn a blind eye, but Lou doesn’t come off looking very good here.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
From the Puck Daddy article:
In calling around last night, I got the sense that the NHLPA (and Donald Fehr) would welcome this chance to take on the League. The NHL’s previous approvals of contracts that clearly circumvented the cap, […]would make their case a difficult one to win.
Help a brother out, lawyers:
I thought just because a rule (or law) was enforced selectively or imperfectly does not invalidate the rule (or law)—that is, you can’t say, “officer, you can’t give me a ticket for speeding, cause other cars are speeding.”
Yes? No? Maybe?
Why does the PA think
(was going to continue) this is different?
by bilspacecadet on Jul 21, 2010 1:33 PM EDT up reply actions
The problem is there isn’t a specific statement/rule in this case. Article 26 doesn’t have a clause that lays out that this specific type of contract is circumvention. This isn’t a situation where you have a law that states the speed limit is 55 and that law is selectively enforced.
"You ever use smelling salts, every time you type a bad blog?" Brooks Laich
Really, the more accurate analogy is that a guy gets pulled over for going 65 in a 55 and he complains that people that go 60 in the 55 don’t get pulled over.
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
by Rob Parker on Jul 21, 2010 1:39 PM EDT up reply actions 3 recs
No, because then you are already admitting circumvention.
"You ever use smelling salts, every time you type a bad blog?" Brooks Laich
So you are going to argue that Hossa’s going 60 MPH wasn’t actually breaking the law, so neither is your going 65?
Lockout talk makes me want to go out and choke an old lady - Elliotte Friedman
It would be like going 80 in an area where the speed limit isn’t a number, but is simply “Reasonable”. And then complaining because those that were doing 70 haven’t been pulled over.
That analogy is more like it.
"You ever use smelling salts, every time you type a bad blog?" Brooks Laich
So then I circle back—does the PA have a leg to stand on claiming selective enforcement invalidates the rule?
by bilspacecadet on Jul 21, 2010 1:50 PM EDT up reply actions
However it works out, I think you can pretty much guarantee the 17-year deal is dead. If they move it to 13 or 14 years with the same total dollars, it will probably fly. However, if the dollars get reduced, then we’ll get to find out how much Kovy really wanted to play for NJ or whether was just about the money.
I think they would, specifically with the Hossa deal.
"You ever use smelling salts, every time you type a bad blog?" Brooks Laich
The CBA is (purposefully?) written in vague terms, which gives the NHL considerable latitude in how to enforce the circumvention provisions, if the provisions that From The Rink cited are accurate and an exhaustive list.
As the League did fire a shot across the bow of the GM’s when reviewing Hossa’s contract, and as Kovy’s contract is more extreme, I think the League has a decent case.
Was it over when the Germans bombed Pearl Harbor?
I think that is an inaccurate description of the CBA. It is plenty specific in a number of areas including certain circumvention issues such as the use of 3rd parties to augment player salaries and fines for circumvent.
Not sure how you read the article 26 provisions as giving the league “considerable” latitude. I would say that they get some in general, because they make rulings on all contracts, so they get what they want unless someone has an issue with their decision. However, anytime the NHLPA disagrees with the league on circumvention issues they can file a grievance.
"You ever use smelling salts, every time you type a bad blog?" Brooks Laich
Well, I didn’t read Article 26, for starters. I read From the Rink’s analysis of it – from what you say, they appear to redacted it considerably.
Was it over when the Germans bombed Pearl Harbor?
I just looked at the From the Rink post. I don’t have any issues with it. I just think you may be reading more into it than is there. League can certainly claim circumvention anytime they want. But they can’t unilaterally decide it happened. They have to arbitrate if the PA files a grievance.
"You ever use smelling salts, every time you type a bad blog?" Brooks Laich
That sounds a lot like the analogy I made yesterday.
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матовая Клими, Михал нуивирт ваш папа теперь
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by red army line on Jul 21, 2010 5:43 PM EDT up reply actions
I said it in the other thread, but I think the fact that the NHL made very public statements after Hossa and Pronger signed to the effect that those two contracts were about as close to the limit as they would allow really helps them here. They said “here but no further” then. NJ went further. The contract is voided. They can argue that they are being consistent.
Atta dinnin stick a who!
by Gould Old Days on Jul 21, 2010 6:15 PM EDT up reply actions
What Happens Now?
I am unfamiliar with the process that follows a rejected contract. Is there like some kind of appeal from the Devils, does he just have to sign a new contract, or does he just end up in the KHL?
The Devils have said they won’t appeal – all that can happen now is for either the PA to file a grievance and take the League to arbitration (which I don’t know a lot of details on) or he becomes a UFA again.
…and please excuse what was horrific grammar and sentence structure in that reply, wowza. The part of my brain that absorbed 8th grade English has clearly gone on vacation today.
Um, the sentence seemed fine and clear to me. Maybe I no talk good not either.
by bilspacecadet on Jul 21, 2010 1:58 PM EDT up reply actions
Eh, it’s understandable but the structure is off. Trust me, somewhere my old English teachers are cringing ;)
/anal-retentiveness
Only thing I see is the parenthetical ending in a proposition.
Which I heard somewhere you shouldn’t do.
But as Churchill famously said, “That is nonsense up with which I will not put.”
by bilspacecadet on Jul 21, 2010 2:58 PM EDT up reply actions
From what I have read the NHLPA, not the Devils, is the entity that would file a grievance per the CBA. Only recourse for the Devils is if they want to take this to court, i.e., the Devils didn’t have an option to appeal via the CBA. I haven’t re-read the relevant CBA sections today, but sounds right from what I recall reading in the past.
Devils had/have no standing to appeal in the first place. Only NHLPA can appeal.
You had me at no problem.
That’s what I thought before but then the Devils put out a statement today saying they wouldn’t appeal the League’s decision. So I’m guessing they had SOME standing (or else are just trying to look like they’re so benevolent that they would never question the all-mighty League’s decision).
I think by appeal they mean ask NHL to reconsider. It’s like appealing a fine/penalty with sports leagues. You essentially are appealing to the same entity who ruled in the first place.
sk8 is right on the grievance part. Only NHL or NHLPA can file them per CBA.
"You ever use smelling salts, every time you type a bad blog?" Brooks Laich
Well, yeah. I wasn’t saying they could file an actual grievance, I know that’s a PA thing – just wondering why the Devils would even say anything at all if there wasn’t anything they could do anyway.
But asking the NHL to reconsider makes sense…sort of…I don’t know. The whole thing is moronic, just make Kovy a UFA again and kick the Devils out of the NHL. Just for funsies.
by Becca H on Jul 21, 2010 2:19 PM EDT up reply actions 1 recs
I find the whole thing fascinating myself. I get the feeling I’m may be the only one.
"You ever use smelling salts, every time you type a bad blog?" Brooks Laich
So, front-loaded contracts are a bad thing. Fine. Tie the cap to the salary. In no single year can the salary deviate from the cap hit (plus or minus) more than 20 percent. Here is how Kovalchuk’s contract might have looked…
1 4,800,000 6,000,000
2 4,800,000 6,000,000
3 6,000,000 6,000,000
4 6,000,000 6,000,000
5 7,200,000 6,000,000
6 7,200,000 6,000,000
7 7,200,000 6,000,000
8 7,200,000 6,000,000
9 7,200,000 6,000,000
10 7,200,000 6,000,000
11 6,000,000 6,000,000
12 6,000,000 6,000,000
13 6,000,000 6,000,000
14 4,800,000 6,000,000
15 4,800,000 6,000,000
16 4,800,000 6,000,000
17 4,800,000 6,000,000
102,000,000 102,000,000
Not so attractive now in those out years…
If you've read this far...seek help.
Not to mention that there’s then no incentive for Kovalchuk to sign the deal. He can get a lot more than 4.8/4.8/6/6 over the next four years.
Eat, drink, and be merry! And then drink some more.
kills the whole notion of those outsized year terms and aligns the expected production to compensation.
If you've read this far...seek help.
And thus, kills the contract and any future thoughts on giving out ones to those like AO and Backstrom as well, thus the “chilling effect” that Kelly talked about last year comes to life.
And I thought Tom Soehn was a shitty coach.
by Bald Pollack on Jul 21, 2010 2:21 PM EDT up reply actions
Which is the object of the exercise. If you’re having guys sign ten-year deals, you’re going to get someone (Lou, for example) pushing that envelope further.
If you've read this far...seek help.
Long-term isn’t necessarily a problem by itself, is it? If the salary isn’t escalating or de-escalating significantly (See: Backstrom, Ovechkin) you have risk assumed by both parties. The team takes the risk that Ovechkin won’t be worth 10 million when he’s in his mid-thirties, Ovechkin takes the risk that the Caps might suck in ten years and he’ll be playing for a bottom-feeder.
Eat, drink, and be merry! And then drink some more.
Right, much in the same way Kovalchuk takes the risk of still playing in the league until 44. The discussion shouldn’t be about what Lou did on this contract, especially if this comes back around on CBA discussions.
And I thought Tom Soehn was a shitty coach.
by Bald Pollack on Jul 21, 2010 2:31 PM EDT up reply actions
Backstrom and Ovechkin have very different contracts than the Kovalchuk deal. The only point I’m making here is that if you are going to have long term deals, then look for ways to de-incentivize bad behavior. If you think a player is worth 12 years, then you pay him a reasonably equivlanet salary over those 12 years. Put in checks that prevent teams fromn engaging in the sort of behavior that permits wildly front loaded deals.
Lou took advantage of what the CBA permits (absent this murky idea of what is too long or too front loaded). Put in limits on what is permitted.
If you've read this far...seek help.
For sure. BP just brought up Ovi and Backstrom and I went on a tangent with it because I’m not firing on all cylinders today.
I just don’t understand why the salary needs to change over the life of a contract. If you think he’s worth $8M, pay him $8M, and take the hit to your salary cap to the tune of $8M. If you think he’ll be worth $8M for three years, sign him for three years. If you don’t think he’ll be worth $8M in ten years, don’t sign him for ten years. If the cap hit is going to be Total Salary/Total Years, why shouldn’t the salary be, too?
Eat, drink, and be merry! And then drink some more.
Time value of money on one hand, cap management on the other.
Was it over when the Germans bombed Pearl Harbor?
I just don’t like that a team can say “we can’t afford what you’re worth now, but trust us, we’ll make it up to you by overpaying later when we have more room!” Because, presumably, the reason they can’t afford what he’s worth is because of what they are paying all of their other good players, and presumably there is some team out there with fewer good players who might have some more space to pay a good player and then every team has a fighting chance. Or maybe I’m just misinterpreting the whole point of having a salary cap in the first place.
Eat, drink, and be merry! And then drink some more.
I think there are two purposes to the salary cap. One, to level the playing field between big market and small market clubs by preventing the big market clubs from just buying all the best players; two, to curb salaries overall and keep payroll expenses down.
Was it over when the Germans bombed Pearl Harbor?
Right, and allowing someone to have a salary that’s significantly greater than his cap hit doesn’t do either.
Eat, drink, and be merry! And then drink some more.
Right, which is why we’re talking about circumvention today.
Was it over when the Germans bombed Pearl Harbor?
Right, which is why I think if cap hit = actual dollars paid, you don’t get people circumventing.
Eat, drink, and be merry! And then drink some more.
As to your 1st purpose I wouldn’t say level the playing field. I’d say tilt it a little more evenly.
Yor second purpose is really two in one. The curb salary growth part is certainly true. However, I disagree on bringing payroll expenses down. The object is to bring payroll in line with revenue not bring the expenses down. If revenue goes up, so do expenses (salaries).
"You ever use smelling salts, every time you type a bad blog?" Brooks Laich
The problem is you can’t do that until the next CBA, and both sides have been enjoying the long term contract for 2+ years now. How are they going to ween themselves off it? Will they?
And I thought Tom Soehn was a shitty coach.
by Bald Pollack on Jul 21, 2010 2:49 PM EDT up reply actions
How about a simple rule. If a player retires or moves to another team, all dollars paid out that have not hit the cap get accelerated. Kovy retires after 11 years and $98.5MM in salary, with only $66MM of cap hit? The $32.5MM all hit when he retires, maybe spread over 2 years.
You had me at no problem.
That would start to mess with teams’ long-term plans (if they have any), which seems unfair…especially since an unexpected injury at any point could really derail their cap situation for years. There’s already an inherent risk to the team with taking on a long-term deal like this, I don’t think there should be extra risk on top of it.
I like the suggestion someone made earlier somewhere (might have been the Clips) that basically said that no one year of the contract could be less than 50% of the highest mark, or something like that. They set boundaries on what increments the contract has to decrease, why not make it a percentage?
I may have picked it up from somewhere else, or I was simply taking from the current rule that says any year can’t decrease by more than 50% of the highest of the first two years. Hence Kovalchuk’s contract being lower in years one and two and then jumping up.
"It's always good to have vikings."
Proud member of the Oxford dictionary police.
I’d almost rather do it on the other side… if a player is traded, he doesn’t take his cap with him, he gets it adjusted to the effective cap (average) of the years that have passed on his contract. If the Devils think they could trade Kovalchuk inm say, year ten of his deal, he wouldn’t take a $6.0M cap hit with him, he take a $9.833M cap hit with him (the effective average of years 1-9).
If you've read this far...seek help.
Haven't noticed too many Ovie/Backstrom parallels being drawn by credible sources...
… but it still makes me sad this article had to be written. Anyone who’s even done three seconds of research would know their contracts are apples and oranges compared to Kovie’s deal, contractually speaking.
Good read and great work!
"Baseball was my first love... hockey is a sultry temptress and stole my heart." - Corey Masisak
by Scoops on Jul 21, 2010 2:45 PM EDT reply actions 1 recs
I love the reminder that the Caps are such a great organization. More articles drawing contrasts between our club, which plays it clean and safe and is loved by its players, with the bad-boy clubs, which bend the rules and throw caution to the wind.
You had me at no problem.
I don’t think Lou is a bad guy in this story. I don’t think (as a matter of principle) he likes the idea of a 17-year deal or even necessarily having Kovalchuk on the club (at least at 17’s asking price). This strikes me as an ownership-driven deal. Lou happens to be as familiar with the CBA as anyone and, presumably, what it will and will not allow. He engineered a deal that would work, given what his ownership wanted done.
If you've read this far...seek help.
From a blog called The Phoenix Pub
The terms of other mega-term deals tilt in the Devils favor. Specifically, the Ovechkin and DiPietro deals give the NHLPA a position of strength, and just because the NHL didn’t think of this when they ratified the 2005 CBA, that’s not the Player’s Association’s fault. If the NHL wanted to object to it, they have had their time, and I don’t believe they will be allowed to now.
Still don’t see how you can draw a parallel between Kovy and Ovie.
by bilspacecadet on Jul 21, 2010 3:12 PM EDT up reply actions
You can when you’re stupid.
"It's always good to have vikings."
Proud member of the Oxford dictionary police.
by gfcaps fan on Jul 21, 2010 3:24 PM EDT up reply actions 1 recs
Or ignorant
I think you hit the nail on the head. Some people will bend any text, term, or datum to try and prove their pre-conceived point.
"Baseball was my first love... hockey is a sultry temptress and stole my heart." - Corey Masisak
NJ danced around the CBA
It’s all in section 50.7 here:
www.nhl.com/cba/2005-CBA.pdf
It’s page 237 of 472 pages in that file..
Basically, the contract can’t do the following:
1) From year to year, can’t increase more than the minimum of the first 2 years of the contract. So for this contract, the only time it goes up is from Year 2 to 3…$6M to $11.5. Not a violation.
2) From year to year, can’t decrease more than 50% of the first 2 years of the contract. So that 50% figure is $3M. So the closest any 2 years come to doing that is when it goes from $3.5M to $750K. But again, not a violation.
So pretty much, that’s how NJ got around the loophole…they danced around the CBA and made it their b!tch…sigh…I really hope the NHL finds some other ground to nail them on this, but not sure it’ll happen.
by OvechkinGR8 on Jul 21, 2010 3:06 PM EDT reply actions 1 recs
I see it the other way, given that the CBA prevents “circumvention”, the League investigated the Hossa contract and eventually allowed it, and Kovy’s contract pushes the envelope even further than Hossa’s deal. Now, if Kovy’s contract had the same general structure as Hossa’s, and still got rejected, I’d say the League has no case. But that’s not the way things sit. Kovy’s contract has a higher peak, a more precipitous dropoff to minimum salary, and more years of minimal salary at the end.
I think the NHL has a pretty good case to say that the Hossa deal was borderline, and Kovy’s deal crossed that border.
Was it over when the Germans bombed Pearl Harbor?
by fat_daddyo on Jul 21, 2010 3:13 PM EDT up reply actions 1 recs
The Ovechkin deal is certainly legal
There is no real deviation between his salary and his cap hit. For a few years he makes $9M, and then $10M or whatever. there are no league minimum years that would cause his cap hit to significantly fall
Reminds me of how the Redskins dealt with the salary cap in the early 2000’s (and the 49ers in the 90s), and both teams paid the price for it in the end, having dead-cap money. I’m glad to see the NHL step in, and frankly, I would think the Devils should be happy, too. Can you imagine having a $6M dead-cap hit every year for up to 7 years? That’s a fairly crippling blow.
I'm the first to admit when I'm wrong.... except when someone else beats me to it.
by Backhanded Complement on Jul 21, 2010 6:13 PM EDT reply actions
Peerless had a post that put it all in perspective about how long a time frame 17 years is.
http://peerlessprognosticator.blogspot.com/2010/07/17-years.html
It included the fact that Brodeur had had only 2 wins in his NHL career thus far.
It noted that Ovi, at age 8, was about to enroll in hockey school.
It also noted how terrible the San Jose Shark and Ottawa Senators teams were. (As in original Caps style bad).
And in my life, it was a year before either of my daughters had joined swim team. (That was to be the following year and every year since — until this year.)
Ilya himself was a 10 year old boy.
Rocking the Red since 1975
— Chris Chelios just completed his tenth season in the NHL.
That one really puts it into perspective.
by timmyv38 on Jul 21, 2010 7:59 PM EDT up reply actions 1 recs
and no Russian had yet to win the Hart trophy
#savethekittens!
Donation info for SAVES FOR KIDS 2010!! Make a difference.
And Chelios is older than Methusalah!
And speaking of old, Grandpa Slippers had just reached the legal age for consumption of alcohol and was a student at the University of Michigan.
Rocking the Red since 1975
Hail to the victors valient!!!
"Baseball was my first love... hockey is a sultry temptress and stole my heart." - Corey Masisak
So did Kovalchuk know it was going to get rejected too? If Lou was tanking it, I can’t imagine Kovy is all that amused.
by Kolzilla on Jul 21, 2010 10:15 PM EDT via mobile reply actions
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| GP | W | L | OTL | PT | |
|---|---|---|---|---|---|
Florida
|
53 | 25 | 17 | 11 | 61 |
|
Washington
|
54 | 28 | 21 | 5 | 61 |
|
Winnipeg
|
56 | 26 | 24 | 6 | 58 |
|
Tampa Bay
|
53 | 23 | 24 | 6 | 52 |
|
Carolina
|
55 | 20 | 25 | 10 | 50 |
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