Why Why Why Submit a Contract that's not Pre-Approved??

Fire & 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.


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.