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Added July 21st, 2010 by Chalk
NHL

NHL Rejects Kovalchuk’s Deal With Devils

Just a few hours after the New Jersey Devils and Ilya Kovalchuk threw a press conference in Newark to celebrate the forward’s new 17-year, $102 million contract, the National Hockey League called shenanigans, rejecting the pact as circumventing the league’s salary cap.

The NHLPA, Kovalchuk and/or Devils can appeal the league’s decision.  Filmmaker Kevin Smith, the only notable Devils fan ever, seemed devastated on Twitter.  “Dear @NHL, Stop being Gargamel to the @NHLDevils‘ Smurfs. #SmurfOffGary,” Smith tweeted.

Basically the league feels the extra years at the end of the contract were added only to lower the annual salary cap hit the Devils take. Under the league’s collective bargaining agreement, each year of the deal, the average annual salary would count against the cap.  So when Kovalchuk starts making $11.5 million three years from now, he’ll still only count $6 million against the cap.  And since the contract runs until Kovalchuk would be 44, the league thinks both he and the Devils think he’ll retire before his salary dips below a million per year in the final five years of the deal — which is why the contract is structured so Kovalchuk gets about 98% of his money in the first 11 years.

The union has five days to appeal the rejection, which it almost certainly will do.  After the appeal, an arbitrator will have 48 hours to make a final ruling.

While there have been many other cases of front-loaded deals recently, this is the first time the NHL has rejected a contract for salary cap circumvention.  If the deal does go through, it will be the longest contract in league history, surpassing the 15-year deal the Islanders gave to goalie Rick DiPietro and the 13-year pact that superstar Alexander Ovechkin signed with the Capitals.

 
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