Why Why Why Submit a Contract that's not Pre-Approved??
by Quisp on Aug 28, 2010 1:58 AM PDT
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PrintFire & Ice: Fate of Kovalchuk’s future with Devils in NHL’s hands
[...] [T]he Devils submitted a signed contract with Ilya Kovalchuk to the NHL earlier today. According to a source, the approximate terms are 15 years for $100 million [...] The NHL did not pre-approve the concepts in this contract, though, and there is still a review that must take place.[...] From conversations I had today, this is far from a slam dunk for this contract to be approved and the review is more than a formality.Although the Devils and Kovalchuk’s camp apparently feel they have addressed the NHL’s concerns about previous contract structures they submitted over the last two and half weeks, the length of the contract—and because it would end when Kovalchuk is 42 years old—remains a potential sticking point. I was told if it was for fewer than 15 years it would have been more likely to be approved.
Here's what I don't get:
If there's any ambiguity or uncertainty whatsoever about whether a potential contract might be rejected by the league, they can pick up the phone and ask the league. So there's literally no reason on this earth (and no excuse) for a club to -- willingly and consciously -- submit a contract that they're not sure is allowed. The process of signing SPCs and submitting them to the league is not one of trial and error, just throwing shit against the wall to see what sticks. That's why there are penalties even for accidental circumvention. Yet, the consensus of everything I've seen today (which could of course turn out to be 100% wrong) is that the league did not pre-approve the structure/framework of this deal.
So the club and the agent have had several discussions over the last two or three weeks about different possible "frameworks," with the league telling everyone what it will allow, with the club suggesting frameworks that the league would not pre-approve...and yet they somehow skipped the step of getting pre-approval on this deal. The actual signed deal.
Seems kind of fool-hardy, doesn't it?
It would make sense if Lamoriello and Grossman knew (because they were told) that the individual elements of SPC 2.0 were all okay with the league. But that's the same thing as pre-approval, right? It makes no sense if the league specifically said -- as was reported -- that they would not pre-approve a 15 year deal and were "looking" more in the range of 13 years.
Maybe it's a 14 year deal. That's within the margin of error for Twitter reporting. But again, with 14 years, they would certainly have asked the league first. In all these conversations, they had to have gotten the league's opinion about what kind of term they would allow.
So, again, why not pre-approve? Under any circumstances?
I can only think of a few possibilities. I'm sure there are more, but these are the ones off the top of my head.
- All the reports are wrong. Lamoriello did in fact get pre-approval on the term of this contract; alternatively, the deal is not for 15 years.
- New Jersey's ownership is insane and, panicking in the face of Kovalchuk's completely unpersuasive ultimatum, ordered Lamoriello to submit this contract over Lamoriello's protest. (I also like to imagine that Lamoriello did the rejected deal against his own will, but that's just because this whole episode has seemed un-Lou-like to a surreal degree.)
- It's a power play with effects and ramifications we're (I'm) not considering. Maybe they think by submitting the contract officially, it boxes the league into a corner. Maybe they think the league doesn't have the stomach to go through another arbitration. Maybe they think the league has a different standard when you ask them off the record than when you submit officially. Certainly, it's true that it's easier for the league to say no in a pre-approval setting than in an official one, because once it's official, the only recourse is the nuclear option -- rejection, which carries with it all the b.s. we've seen over the last two months. (I find this option extremely unpersuasive as I'm typing it -- a dangerous gamble with just about 100% likelihood of bringing the full wrath of the league down upon them. People thought SPC 1.0 made the league look foolish. How will they respond to another public challenge? Not well, I'm thinking.)
- The club (etc.) doesn't care if the league rejects the contract, because they believe that they will prevail in any arbitration. This also seemed ill-advised, until I remembered that many people reported that Bloch was appointed the arbitrator for that contract only. If that's true -- if he's not the official system arbitrator -- then Lamoriello might well reason that another arbitrator will be much more likely to rule in their favor. Especially since SPC 2.0 (in this hypothetical) will have erased all of the objections of the arbitrator in the 1.0 ruling, with the exeption of the term issue. Maybe they feel good about their chances arguing on the term issue alone.
That actually makes sense to me. Strategically. Force a rejection, get a different arbitrator and hope for a favorable decision. If the odds were 50/50 last time, with a less offensive contract and only term being at issue, the odds have to be at least better than a coin flip.
The reward for such a gamble is high: they get Kovalchuk.
The risk is (most likely) just the same risk they have if they don't do a 15 year contract: they don't get Kovalchuk. Because they can't afford him with a 13 year deal, unless Kovalchuk compromises, which he doesn't appear to be willing to do (maybe he did, though; we don't know the actual terms of the deal yet). But the point is, 15 years is very likely the only way they can land IK if IK won't come down in his price, so they may as well just go for it.
Again.
This is only a rational strategy if you assume the league won't go batshit crazy with rage and go for maximum penalties to punish the Devils for attempting to publicly emasculate them.
Yeah, I think of all the scenarios I outlined, this one is probably the most likely. Well, second-most likely; first being that everything that was reported was wrong somehow. And if it is true that they have defied the league's "suggestions" in seeking to force a second arbitration, I would handicap the outcome as follows:
- 70% - arbitrator rules in their favor. They get Kovalchuk at a great price.
- 5% - contract rejected, league seeks minimal penalties or no penalty at all. Which means of course there's nothing stopping New Jersey from just reloading and trying again.
- 25% - contract rejected, league goes f***ing nuts and assesses maximum cap penalties and fines, suspensions, loss of picks, the works. Maybe not all of those things. But something horrible and painful. New Jersey has a reduced cap AND no Kovalchuk.
Now, if I'm Lou...do I take that chance? Probably not. But if I'm the owners...yeah, I probably would roll the dice.
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You haven’t answered the big question. What is the downside for the league to reject the contract? Other than losing some PR, I don’t see any.
It makes sense for the league to really put an end to these contract by winning another arbitation. If they lose, it’s not a big loss, everyone would know that the “line” is 42.
Isn’t that the answer to everything? :)
They lose one of the game best players / biggest stars, who is currently in the prime of his career, to the KHL.
Also, if they reject a Hossa-like contract, they embarrass themselves because: (1) They then pretty much have to go after the Hossa contract, thereby putting a black mark next to the Hawks name on the cup (less than half a year from one of the biggest NHL markets ending a 49 year drought with a headliner Stanley Cup victory) or (2) They don’t go after Hossa’s contract to avoid said embarrassment, and come out looking like morons for enforcing a double standard.
No contract is the same. Each contract is it's own entitiy.
The difference with Kovalchuk and NJ is that they already had a 17 year contract voided for circumvention. Now the same parties have submitted a 15 year contract. Unless the structure is $6.66 million per season, then it should be rejected. There is already precedence with this player and team.
Players, epecially UFAs, will always be allowed to play for the highest bidder, if that is their desire. The fact that the KHL, an inferior league, needs to throw insane money at players to get them to play says a lot about the league. No reason for the NHL to allow cheating to keep the “starts” in the NHL versus the KHL. When players start signing with the KHL for less money, then the NHL will have a problem.
To your first point, I don’t see where you disagree with me. I specified “If the league rejects a Hossa like contract,” then went on to list the negatives that I think would come from doing so (which you may or may not agree with).
To the second point, Hossa already turned down a more lucrative deal from Atlanta than either the KHL or Devils/Kings have offered (if one beleives the 10yrs $100million reports). The NHL does have a problem; the salary cap is not having the desired effect of creating parity between the have and have-nots.
I don't see where IK settled for less
The first contract from the Devils was worth $102 mil total. Even if you argue that IK would have made less money over all in the sense that he would have forsaken the 4-year tail worth $2,2 mil total (i.e., $98 mil v. $100 mil) by retiring, it seems like a petty difference.
Just because the league doesn't want Kovalchuk to play in the KHL doesn't mean they should approve any ridiculous contract he thinks he deserves if it violates the CBA
As far as your Hossa logic, it’s self-validating. Obviously, if the league rejects the contract because it’s “Hossa-like,” then they will also “go after” the Hossa contract. But it’s also obvious that if they think the Hossa and Kovalchuk contracts are different, they may (should) treat them differently. Your assumption appears to be that the league has some kind of grudge against Kovalchuk and/or the Devils. I don’t see that at all.
The way I see it is: if the league thinks the new contract is a circumvention, and they know that by rejecting it Kovalchuk will bolt to the KHL, they still have to reject it.
Wait till this year.
Your assumption appears to be that the league has some kind of grudge against Kovalchuk and/or the Devils
I didn’t mean this at all. I think there was a misunderstanding a few posts back. So let me try to explain.
Sydor asked “What does the league have to lose by rejecting the contract?” I answered that (1) Right off the bat, they lose one of the games biggest stars. This is fact. However, I never meant to imply that Bettman will fold because of this.
(2) If the contract is like Marian Hossa’sand the NHL rejects it, than they have a whole hell of a lot to lose, and I went on to list the reasons.
But it’s also obvious that if they think the Hossa and Kovalchuk contracts are different, they may (should) treat them differently
I never said anything that goes against this. Or I never meant to, because I agree with this statement.
The League can't be happy about IK's 'ultimatum'
As I said in my comments to an earlier post, Team Kovy made it out like their man is bigger than the NHL. You don’t give ultimatums unless you think you have the bigger swinging dick. And if you’re the NHL (or any sports league) you can’t let the impression sink in that one player is bigger than the whole, no matter how talented he is.
So, I would say two things in resposne: 1) Yes, the NHL can afford to lose Kovalchuk to the KHL. Especially if it’s only for a short-term deal; he may come back to the NHL chastened about the wisdom of using the KHL as a bargaining chip. 2) Team Kovy has put the League in a position where they can’t afford to appear to cave in to them.
Maybe the semantics are just misleading.
Could be that the League did not “pre-approve” the contract fully, because they simply can’t be bound by the announced results of a relatively incomplete review. All these reports of the back and forth in discussing previous contract versions have seemed more like a three party negotiation, between the League and the Devs and Team Kovi, than have they seemed like an actual process of formal submission and objective appraisal. The Devils work the league office to get as much as they can, and use that dialogue to leverage Kovalchuk. Same thing as the car salesman, when he has to “go ask his boss” if he can make the deal you demand, when all the time he knows the answer already and just wants to make you sit for strategic reasons.
With all the talk, I am sure the Devils know exactly what the “line” is now and whether the deal will be allowed. Also, the League probably knows roughly whether the newest deal will be allowed, but to grant “pre-approval” would be to circumvent the required formal process. I think you are right that the true questions is mainly whether Team Kovi is willing to compromise to the necessary degree; they seem the least likely to act in a rational, fact-based and reasonable manner.
End Corporate Personhood.
What is the point of telling a team that the contract needs to be 13 years and then accept a 15 year deal?
TGfireandice Lamoriello would not comment on contract terms, but I’m told now that 15 years, $100 million are the exact numbers, so $6.66 mil is cap hit.
I’m sorry, but the NHL is a joke if they allow a $100/15 contract after the same player and team were found to circumvent the CBA with a $102/17 contract. Are we really led to believe that they were just kidding with the 17 year deal, but 15 is okay? The league needs to make a real stand against these contracts.
If it front-loaded at all, the contract should be rejected. If it is $6.66 million every season, then accept it.
I disagree that the difference between 15 and 17 years is insignificant.
It’s a difference of 666K in cap hit, without Kovalchuk so much as budging an inch. Front-loading is not prohibited by the CBA. However, if it’s true that the league said they wouldn’t approve anything over 13 years, and then they approve something over 13 years, I agree that’s kind of a problem.
Wait till this year.
Kovalchuk's ultimatum
Quispy:
You have confirmed reports of Kovalchuk’s ultimatum and a timeline of 24-48 hours. You then have a contract submitted within 24 hours. That is the most likely answer.
Devils mistake
It seems like the Devils are trying to back the NHL into a corner with a Hossafied deal. So they are either trying to get Kovalchuck or force the NHL to de-register the other contracts that circumvented the cap.
Here is where the Devils screwed up. They force the NHL to accept the deal because the NHL doesn’t want the headache of de-registering the other contracts. So they get Kovalchuck at 15/100mil, then the NHL applies the penalties for the last contract since there is no time limit on them to do so. Since the NHL is pissed they go with the full five million penalty and the Devils have to dump more players to get under the cap plus probably lose a draft pick or two as well.
I hope the numbers are reported wrong and we can stop dealing with this crap and start looking forward to the new season.
The league has already said that the Hossa contact is not the line...
…but if they accept $100/15, then they just proved that they have no conviction and the other GMs will go crazy next off season.
BTW, I wonder why the structure hasn’t been released. The $102/17 structure was released rather quickly, before the league rejected it. I would love to see the structure of the new $100/15 contract.
So far the league has not shown a lack of conviction in this matter
as far as the GMs going crazy next off-season, even if they decided anything was possible, there really aren’t that many contracts this situation would apply to. a small handful at most.
but, really, i think if the league said they wouldn’t do 15, then they will reject 15.
Wait till this year.
Fehr would love for the $100/15 year contract to be approved without a fight.
The NHL probably told NJ that they would advise against going over 13 years, but they can’t say that they would reject anything over 13 years.
There are some prime RFAs and UFAs next year and even if only 2 or 3 of them get signed to these BS contracts, what is the point of the salary cap?
Fehr would have a field day with the league in the negotiations for the new CBA since he would be able to show that the salary cap isn’t doing any good. Fehr hates any kind of cap system and if the league allows circumvention every off season, then the NHL doesn’t have much negotiating power to keep the cap system in place. Since you would have 5+ GMs that are cheating to avoid the “hard” salary cap, it isn’t serving the purpose that it was designed for.
I think the NHL needs to roll the dice on another arbitration.
Since there wasn’t any punishment given to NJ for the first contract (no conviction), I would say that the odds of them rejecting another contract is very low, maybe 10% (e4). :)
I don't really know very much about how the CBA negotiations work
and I especially don’t know whether what one side argues matters (vis-a-vis whether the cap is working). My guess is that the only two things that matter are what each side wants and what each side is willing to give up. If the league wants the cap, they’re entitled to cling to it like grim death, even if it’s not working. The NHLPA is not going to be able to argue them out of it. All they can do is threaten them with a strike. I don’t really even know if the NHLPA wants to eliminate the cap. I mean, I can see why they would want to (no limit on salaries, better for players). But there’s also an argument that eternally escalating salaries aren’t really helping anyone either.
But like I said I don’t really know how those negotiations work. You may well be right.
However, I don’t see the logic of your last sentence. I don’t think the fact that they have not assessed penalties for the first contract means that they are less likely to reject the second one. I think it’s just as a likely that they haven’t pursued penalties in the first case because they are hoping that the rejection is disincentive enough.
If it turns out not to be, I would expect stiffer punishment the next time.
Wait till this year.
I don't really know about how the CBA negotitaions work either,
but if the NHL wants the cap and the NHLPA doesn’t want the cap, would the NHL really want to risk another lost season for a system that has serious flaws and is being exploited by more GMs every year?
It will depend on how quickly Fehr can unite the NHLPA. Right now the cap system only really benefits the top 6 forwards and top 3 or 4 defenseman. The days of the role players making $2+ million per season is gone. If they are lucky to have signed a “big” contract, they are starting to be buried in the AHL or Europe. Not exactly a great position for over half of the union membership.
I sure hope both sides know how terrible it would be to have a work stoppage and truly work together to get a CBA put together in time for 2012-13. I hope neither side digs in to a position before negotiations even start.
However, I don’t see the logic of your last sentence. I don’t think the fact that they have not assessed penalties for the first contract means that they are less likely to reject the second one. I think it’s just as a likely that they haven’t pursued penalties in the first case because they are hoping that the rejection is disincentive enough.
I just meant that the fact they didn’t asses any penalties to the Devils for the first circumvention means that they aren’t terribly serious about stopping these long term retirement contracts. The league will probably call the minimal increase in the cap hit as a victory.
……
If the NHL does register the contract, they should just close all investigations and admit that 42 is the line. This way everyone knows what can be done with long term contacts. It would at least “level” the playing field for the free spending owners.
I agree with Syd...
… in that I don’t think you have to have an intimate knowledge of how these negotiations work to understand that the NHL and the NHLPA will basically be playing chicken with each other. The NHL is lucky to have survived the lockout, and I agree that another labor stoppage would court disaster, whether it’s a lockout or a player’s strike. If Fehr wants to get rid of the cap, he’ll look Bettman right into those beady little eyes of his and say, “The salary cap goes out, or my boys walk.”
Maybe Bettman looks right back into Fehr’s beady little eyes (they both have beady little eyes, which is one reason why both are so hard to like), and says, “Go ahead, make my day.” But like I said, does he want to risk another labor stoppage?
I know that DVLEsq has said that Fehr isn’t as bad as his rep. But my impression of players unions in general is that they don’t give a damn about their members; they care about their institutional power. I’ll bet that Fehr will risk destroying the NHL because he can just chivvy his members into line with fine talk about union solidarity. He doesn’t care about letting them rot. First of all, he thinks he can win if he keeps his members in line; and second, he doesn’t care if he denies his members the chance to do the thing they love for NHL-level money because it’s more important to him to preserve the NHLPA as a credible institution.
Jerking Off
This is lke a bad movie. You keep wathcing it thinking it is going to be better, and it just gets worse. This “new” contract, 2.0, seems to have really relatively minor tweeks. Gotta figure the league will reject it really for the same reason as the first time—term is untenable given the average age that NHL players retire.
I don’t think the league is concerned about losing face.
It sounds like Lou is getting jerked around by his owner. Lou is a smart man and knows bullshit when he sees it.
This boils down to the same issue for this greedy prick—what he is “demanding” in terms of salary is not feasible for a competitive team in a salary cap environment.
If Kovalchuk and his asshole agent (now that I think about maybe both of them are assholes) want to roll the dice again with an arbitrator, then so be it. If they eat shit again, great. Hope they choke on it, greedy sons a bitches…
I'd Flip
The 5% and 25%
I don’t think Bettman wants Kovy going to Russia, and realizes that the Devils are about it for Kovy playing in the NHL. If another Deal gets rejected, I still don’t think Bettman will handicap the Devils in trying to sign him.
Dominik signed me for 20 years, and all I got was a press conference and a voided contract...
Contributor to Lighthouse Hockey not sure if I'm the Sniper or the Enforcer.
I would agree with you (and thought about splitting that 30% down the middle) except that I find it hard to believe that
the league would respond to direct defiance with a smile and a shrug. They already rejected one contract and (somewhat compassionately) didn’t go for penalties. That was an olive branch. If the devils ignore the olive branch, i don’t think the league is going to offer it a second time.
Wait till this year.
Isn't this the same thing Vancouver did with Luongo's contract?
Obviously the situations aren’t exactly the same, but didn’t the league ask Vancouver to knock a couple years off the end of Luongo’s contract before submitting it? Then the Canucks just submitted it anyways and it was approved even though the league didn’t really like it. I could see this situation being similar to that although the previous rejection and greater media attention obviously changes things.
by GoKings09 on Aug 28, 2010 10:21 AM PDT via mobile reply actions
The league is the parent and the SPCs are siblings
saying, in effect, you let my brother get away with this exact thing, but now you’re punishing me. The first kid (Luongo SPC) is politely asked not to do x, and he does x anyway and is not punished, even though the parent is quietly pissed off. Then the second kid does the same thing, and the parent says don’t do it and the kid does it anyway and the parent snaps and says you’re grounded and the kid says but you didn’t ground Luongo and the parent says well I’m THINKING about grounding him still and the kid senses some weakness in that position so he just goes and defies the parent again and the parent has to decide how to discipline this child who is now repeatedly publicly challenging his authority, in front of the 600+ other siblings. Yeah, Luongo did something that would probably have gotten a different reaction if he hadn’t done it before the parents’ buttons were all pushed, but in the end the one who gets busted is usually the sibling who insists on pushing all the buttons at exactly the wrong time, when the parent has already been pushed to the edge by the others kids. Fair? Not exactly. Predictable and avoidable? Absolutely.
Wait till this year.
Excellent analogy. My folks were a lot better at dealing with me than they were with my older sister.
This is an excellent time to forget the past and draw the line. Sadly, it is likely that line will most likely be one of semantics.
None the less its well past the time for this sport to take itself seriously and properly deal with disruptive and abusive practices.
Additionally while I have never taken a line on Bettman I must condemn the man for allowing these situations to spiral out of control and adversely effect both the team and the game I love.
I agree with you
My point was more what could have been going through New Jersey’s mind on why they submitted it anyways. If the league told Vancouver to fix Luongo’s contract and they pretty much ignored them and left it the same way and got away with it why not try doing the same thing now. Obviously it is far more foolish now that the league has already rejected the first contract and everything but still could be why they tried their luck.
I think NJ is daring the NHL to reject the contract. It sounds like the battle between a TV show’s writers and the censors. First they submit a script theyknow is edgy, maybe too far out there and hope it will pass, but aren’t too bothered if it gets vetoed, cuz they then just submit a script that baaaaarely toes the line. In this case, NJ benefits cause it uses the league against Kovalchuk, forcing him to lower his demands.
That works only until the league gets so pissed off they decide to use punishments and take away draft picks and give NJ a fine that counts against cap as well and all other things they can do.
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