NHL says Kovalchuk deal circumvented salary cap

[July 22, 2010]  NEWARK, N.J. (AP) -- Ilya Kovalchuk is no closer to figuring out his future than he was when NHL free agency opened three weeks ago.

Kovalchuk's landmark 17-year, $102 million contract with the New Jersey Devils was rejected by the NHL, which ruled that the longest deal in league history violated its salary cap.

Where the high-scoring forward -- the biggest prize on the free agent market -- will land now is anyone's guess.

NHL deputy commissioner Bill Daly said in a statement Wednesday that the Devils, Kovalchuk and the players' association still have several options if they choose to restructure the deal.

Until then, Daly said "the player is not entitled to play under the contract."

The union has a few days to decide if it will file a grievance to try to have this contract approved; Kovalchuk and the Devils could return to the bargaining table to work out a new deal; or the All-Star forward could go back into free agency and find a new home in the NHL or in his native Russia with the rival KHL.

Red flags were raised even before the Devils held a news conference on Tuesday to formally announce what appeared to be Kovalchuk's final NHL contract.

By tacking on years of low salary at the end of the deal when Kovalchuk would be well past his prime -- if he was even still playing -- the Devils lowered their salary-cap hit to $6 million per season.

The NHL wants to eliminate such "retirement contracts" and challenged this one after allowing others to stand.

Kovalchuk's deal was likely rejected because he was slated to earn only $550,000 in each of the last five seasons of the contract that was to run through the 2026-27 season, when he would be 44. Kovalchuk was to earn $98.5 million in the first 11 years of the deal.

"We are extremely disappointed that the NHL has decided to reject the contract of Ilya Kovalchuk," Devils president and general manager Lou Lamoriello said in a statement. "The contract complies with the terms of the collective bargaining agreement. We will have no further comment until the process outlined in the CBA is complete."

Kovalchuk's agent, Jay Grossman, also said Wednesday that he wouldn't comment until the matter is resolved.

Before the deal was prohibited, Lamoriello believed it would meet NHL approval.

"There is nothing that we have done wrong," he 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."

Based on provisions in the collective bargaining agreement between the players' association and the league, the union has five business days to file a grievance on behalf of Kovalchuk. The deal would remain voided if no grievance is filed or if an arbitrator agrees that the contract is illegal.

The arbitrator would have 48 hours to decide if the league was right to reject the contract. If the arbitrator agrees, the contract would be voided, and Kovalchuk would again be an unrestricted free agent.

"The NHLPA is currently analyzing the basis upon which the NHL rejected the contract between the New Jersey Devils and Ilya Kovalchuk," union spokesman Jonathan Weatherdon said in a statement. "We are evaluating the options available to us under the terms established in the CBA."

Such long-term deals that have become popular for star players since the salary-cap era began following the NHL lockout in 2005 could become a thing of the past when the next CBA is negotiated.

Deals given last year by Chicago to free agent forward Marian Hossa, and by Philadelphia to 35-year-old defenseman Chris Pronger were reviewed by the NHL and approved.

Pronger's seven-year extension begins next season. He will earn $7.6 million for two years, $7.2 million in 2012-13, $7 million in 2013-14 and $5.5 million over the last three seasons of the deal.

Hossa signed a 12-year, $62.8 million contract that leaves the Blackhawks an annual salary cap hit of $5.23 million. He will earn $7.9 million per year through the 2015-16 season before his salary drops. Hossa is set to be paid $4 million in 2016-17, $1 million the following two seasons, and $750,000 in each of the final two years of the deal. Hossa would be 42 when the contract expires.

Kovalchuk dismissed money as a main factor in his decision to stay with New Jersey. He instead cited long-term security for him and his family and the opportunity to win the Stanley Cup with an organization that boasts three titles in 15 seasons.

Kovalchuk's contract would have topped the 15-year deal goalie Rick DiPietro got from the New York Islanders, and two-time NHL MVP Alex Ovechkin's 13-year pact with Washington.

Kovalchuk was to earn $6 million each of the next two seasons, $11.5 million for the following five seasons, $10.5 million in the 2017-18 season, $8.5 million for the 2018-19 season, $6.5 million in 2019-20, $3.5 million in 2020-21, $750,000 the following season, and $550,000 for the final five years of the unprecedented deal.

Kovalchuk's time with the Atlanta Thrashers ended when he rejected a 12-year, $101 million extension. He totaled 41 goals and 44 assists last season when he earned $7.5 million, but posted only 10 goals and 17 assists with the Devils after being traded in February. Kovalchuk had two goals and four assists during New Jersey's five-game, first-round playoff loss to Philadelphia.

[Associated Press; By IRA PODELL]

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