CBA - Article 26.13 (c)
In the event that the System Arbitrator finds that a Circumvention has been committed by a Club or a Club Actor, the Commissioner may impose any or all of the following penalties and/or remedies set forth below:
(i) Impose a fine of up to $5 million in the case of a Circumvention by a Club or Club Actor, but in no circumstances shall such fine be less than $1 million against any Club or Club Actor if such party is found to have violated Article 50 of this Agreement. If such a fine is assessed against a Club (except in the case of a financial reporting violation), that Club's Payroll Room shall also be reduced by such amount.
And yet, here's the New York Post:
NHL has window to penalize Devils for Kovalchuk signing - NYPOST.com
The NHL has been given Players Association approval until Sept. 17 to confiscate Devils draft picks and fine the team up to $3 million for its first signing of Ilya Kovalchuk, The Post has learned. The league, however, will not lower the Devils’ $59.4 million salary cap upper limit, one of the possible punishments for cap circumvention.
But see "shall" above. Am I to understand that the league and the NHLPA agreed to ignore that part of the CBA? Sounds like it:
[...] In agreeing early this morning with the league to amend the CBA in exchange for ratifying Kovalchuk’s 15-year, $100 million second contract with the Devils, the Players Association signed off on an agreement letter that grants the NHL the unilateral right to fine the Devils and confiscate picks. The PA agreed not to appeal the league’s decision.
Since the league, by virtue of the first arbitration, could already assess the Article 26 penalties at its own discretion without a peep from the NHLPA, I think it's interesting that the Post is characterizing this "agreement" as something the NHLPA is "granting." If the Post is correct, what the agreement does is limit what the league could already do, not grant new powers. Possibly the league had to agree -- in their negotiation -- to no cap hit penalty.
That makes sense, actually.
The NHL’s power to fine up to $5 million, confiscate picks and reduce cap space in cases of circumvention are listed in the CBA, but this agreement letter eliminates the need for the league to prove circumvention to the PA.
Especially since the league already proved circumvention. Remember that whole hearing thing? I know it seems like years ago (seriously).
[...] The letter gives NHL commissioner Gary Bettman sole discretion as to the size of the fine, and the number, placement and year of seized draft picks.
Brooks already said the fine can be up to $3MM. The CBA gives the league the right to fine up to $5MM.
[...A]gent Jay Grossman [is] excluded from punishment.
Assuming the Post is accurate, it sounds like what happened is, in order to arrive at an agreement with the NHLPA, the league had to take certain penalties off the table. This is kind of remarkable, since that development mostly benefits the Devils, i.e. ownership, i.e. the league. At least, it used to be that Bettman was aligned with the owners and the NHLPA was on the side of the players. But given the way this thing played out, it's not surprising that the Summer of Kovalchuk has turned that upside-down.
- The league agrees to approve the second Kovalchuk contract.
- The league agrees not to assess cap penalties against the Devils for the first contract.
- The league agrees to cap any cash fines at $3MM.
- The league agrees not to discipline Grossman or Kovalchuk.
- The league agrees to close its investigations into the other contracts.
- The NHLPA agrees to amend the CBA language to (in theory) close everyone's favorite loop-hole.
I actually think that something punitive in Grossman's direction would have gone a long way toward curbing future unforeseen b.s.; but I never really expected it to happen, so I'm not especially disappointed. The cap penalty thing has a silver lining for the league, in the sense that they are now much more likely to levy a stiff fine; the CBA (which they have agreed to ignore) says the fine and penalty must be the same, and the result of that would likely have been no fine and no penalty (since a cap penalty would have been especially devastating to the Devils, given their already precarious cap position, and I think Bettman would have stopped short of that fairly nuclear option). The other investigations were only bargaining chips anyway, which Bettman just spent. And that leaves only the approval of the second contract, which (I believe) would have been approved in arbitration if the league rejected it.
So I guess the league didn't give up much of anything, and the union maybe saved the Devils a couple million, maybe saved one player from being traded away, and maybe made a handful of superstars (with contracts expiring next summer) slightly more expensive cap-wise for teams to sign.
And what about Kovalchuk? Well, for his part he had to give up...um...I forget...I guess that $5MM that got pushed to the end of the deal? Of course, that's not much of a sacrifice since he intends to play to the end of his contract. Not to mention the fact that he doesn't care about the money.