Why The Kovalchuk Contract Is Unique
by GoPens! on Jul 21, 2010 12:57 AM EDT
Email
PrintThose who are upset at the NHL's dismissal of the Kovalchuk contract say it's unfair because they didn't dismiss the contracts for Chris Pronger, Henrik Zetterberg, Rick Dipietro, Marian Hossa, Johan Franzen, or Roberto Luongo. I'm going to take a look at those contracts and see how they compare to Kovy's.
Chris Pronger
In effect: Age 35
Length: 7 years
35+ Rule
Cap hit: $4.9M
MAS (max annual salary): $7.6M for two years
LAS (lowest annual salary): League minimum for two years
The big neutralizer for me is the 35+ Rule that's in place. On top of that, the difference between the cap hit and MAS is $2.7M (55% of the cap hit), and it's only for two years. The league minimum on the last two years raises some eyebrows, but it's only two years, as opposed to six.
Henrik Zetterberg
In effect: Age 28
Length: 12 years
Cap hit: $6.1M
MAS: $7.75M for three years
LAS: $1M for 2 years
This contract ends when Z is 40, which is older but not totally unrealistic. The difference between the cap hit and MAS is $1.65M (27% of the cap hit), and at least his LAS is above league minimum, and only for two years.
Johan Franzen
In effect: Age 29
Length: 11 years
Cap hit: $4M
MAS: $5.5M for for 1 year
LAS: $1M for 2 years
This contract is very similar to Zetterberg's. The difference between the MAS and the cap hit is $1.5M (38% of the cap hit), and that's only for one year.
In effect: Age 25
Length: 15 years
Cap hit: $4.5M
MAS: $4.5M
LAS: $4.5M
I don't think Dipietro is relevant to this discussion. Yea it's a long contract, but that's not what the NHL cares about. He gets the same money every year, and it's not obvious that he's going to retire or will be given incentives to do so because of the structure of the contract.
Roberto Luongo:
In effect: Age 31
Length: 12 years
Cap hit: $5.3M
MAS: $10M for 1 year
LAS: $1M for two years
This puts Luongo on the ice until he's 43. I think that's fishy, but the structure of the contract muddies the water a bit. The difference between the cap hit and the MAS is $4.7M (87% of the cap hit), but that's only for one year. Luongo gets reasonable money the next 7 or 8 years, and it's not like the Canucks put him down for $10 the first 5 years and only league minimum for the rest. He'll get no less than $1M any year, and there's only two throwaway years tacked on.
Marian Hossa:
In effect: Age 30
Length: 12 years
Cap hit: $5.3M
MAS: $7.9M for 7 years
LAS: $1M for 4 years
This contract keeps Hossa going until he's 42. It's unlikely he'll play that long, but there are some mitigating circumstances. The difference between the MAS and the cap hit is $2.6M (49% of the cap hit), and there's a lot of consistency in this contract: Hossa basically sees only two salary levels over the course of the contract. He's also getting paid above league minimum at all times, and there are only 4, at most, throwaway years on the end.
In effect: Age 27
Length: 17 years
Cap hit: $6M
MAS: $11.5M for 5 years
LAS: League minimum for six years
The length of this contract is at least five years longer than any of the other players. The difference between the cap hit and MAS is $5.5M (92% of the cap hit). Not only is that the largest proportion of the cap hit among those surveyed, but it's also the most in absolute terms, since Kovalchuk would get $57.5M over five years while Hossa gets $55.3M over 7 years. However, the most damning part of this contract has to be the end of it. No player has six throwaway years, and no one has league minimum for more than two.
Overall, the thing that separates Kovy's contract from the others is it's structure. The Devils really made no attempt to try and temper the impression of this contract, and I think that's the main reason the NHL went after this one: it's such a blatant violation.
43 comments
|
0 recs |
Do you like this story?
Comments
If there is no reasonable expectation that the player will play out the terms of the contract, then it should be voided. I think it’s something like 0.11% of NHL players retire at the age of 42, and less than 0.1% retire after that. Hossa, Luongo and Pronger should have their contracts voided.
Also, for contracts like this, the LAS should be a minimum of around $2MM. Selanne was around 38 when he signed his previous contract, and it was for $3.5MM and $2MM respectively. Players like Zetter aren’t going to be paid less than Draper at any point of their career (assuming no devastating injuries occur).
Follow me on twitter @CoolJ90 or add me to XBox Live - CoolJ90
If there is no reasonable expectation that the player will play out the terms of the contract, then it should be voided. I think it’s something like 0.11% of NHL players retire at the age of 42, and less than 0.1% retire after that. Hossa, Luongo and Pronger should have their contracts voided.
It might not be reasonable to expect those players to play out their contract in full, but the Kovalchuk contract has a ton of problems with it that no other contract has. Sure the loophole that Ken Holland made famous should be closed, but I think it’s mistake to put the Pronger, Luongo, or Hossa deals in the same category as Kovalchuk’s. I mean the front-loading on Kovy’s deal is absurd.
Hockey Blogger at Pensburgh.com
In fact, i calculated that 1.2% of skaters playing more than 500 games played when they were 42, it actually would be higher than that but i accidentally included active players in my analysis. (goalies seem to retire 1 year later or so, on average.) The real problem is that unlike a Selanne or a Lidstrom, their salaries give them no incentive to actually play at that age.
On the Mike Weber bandwagon.
Tyler Ennis: Freed from Portland!
The real problem is that unlike a Selanne or a Lidstrom, their salaries give them no incentive to actually play at that age.
Kovalchuk’s certainly doesn’t, but I think his is alone on this front. Maybe Pronger as well, but it’s not as clear.
Hockey Blogger at Pensburgh.com
So unique its void!
Blueshirt Banter - End the Sather Era
US Soccer - The Yanks Are Coming
Red Sox Fan behind Enemy lines.
So the NHL's message is:
It’s okay to try and circumvent the cap, just don’t be so blatant about it. And somehow this is an acceptable line of thinking?
Intelligent opinion does not follow the transitive property
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Jul 21, 2010 1:13 PM EDT reply actions
There are big differences between Kovalchuk’s contract and those listed above. Gabe also makes the same point in his article this morning. The line of thinking is that all of these other contracts have a reasonable structure. Sure they’re bringing the cap hit down due to the length, but there’s no egregious discrepancy in payment like there is in Kovy’s contract.
Hockey Blogger at Pensburgh.com
but there’s no egregious discrepancy in payment like there is in Kovy’s contract.
I beg to differ. Zetterberg goes from $7M to $1M in 2 years. Hossa is at 7.9M and goes to 1M for 4 years.
Intelligent opinion does not follow the transitive property
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Jul 23, 2010 1:00 AM EDT up reply actions
When I said the discrepancy in payment, I meant the difference in salary and cap hit. Kovalchuk’s is the worst.
Hockey Blogger at Pensburgh.com
true
but it’s still what I said above. It’s okay to break the rules, as long as you don’t break them too badly. Too badly being defined entirely on the whim of the NHL’s office.
Intelligent opinion does not follow the transitive property
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Jul 26, 2010 11:40 AM EDT up reply actions
I think this is just the unfortunate reality of contract law in North America (though I can’t speak for Canada too much). Sure it’d be nice to have specifics and perfect delineations between good and bad, but I don’t think that’s feasible since it eliminates the flexibility the league (or others) might want to retain to deal with problems as they arise. It’s not perfect, but I don’t think it’s the end of the world when judges or arbitrators use common sense or general reason to help interpret a contract and its intentions.
Hockey Blogger at Pensburgh.com
No one’s saying that there needs to be rules that get rid of the grey, because it’s just not possible. The US constitution is all of 2 pages long, and relies heavily on judges and juries to make those precise decisions.
But the NHL had a chance to define what the rules were with the Zetterberg contract. That was where the grey began. The rulebook can’t forsee every single situation where a team and player have a contract that tries to circumvent the cap, so they entered a clause that allows the NHL to put their foot down.
I have no problem with any of that.
They have gone well past the point of “defining the gray area” and it’s now in the “we’ve let these things spiral out of control and now we need to save face”. The Zetterberg contract was a clear attempt to circumvent cap rules. The NHL had the language in the CBA to squash this then.. they didn’t. Now they want to put the genie back in the bottle. The gray area is well before that. Just because Kovi’s contract is more egregious doesn’t mean that other contracts weren’t trying to break the rules.
That’s my biggest problem with NHL enforcement of rules. They let the genie out of the bottle and then spend way too much time trying to put him back.
Intelligent opinion does not follow the transitive property
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Jul 27, 2010 12:00 PM EDT up reply actions
I don’t think things spiraled out of control at any point during the past couple of years. Sure there were some contracts that seemed fishy, but the overwhelming majority of SPC’s are clean.
The problem I presume most people have with the contracts above is the length of the contracts. Yes those extra years are helping to bring down the cap hit, but I don’t see an egregious difference between their MAS and their cap hit; certainly not one that should cause everyone to get riled up. All of the contracts except for Kovalchuk involve players that can reasonably play until their 40, because they bring other tools to the table.
If you want a rule that says “manipulating a contract to get a lower cap hit than yearly salary is illegal,” then you’ll be voiding quite a few contracts. If you don’t want that, then it’ll have to come down to a judge or an arbitrator making a judgment call on how reasonable a contract is. I think the other contracts above were reasonable, though bordering on excessive, and I think that Kovalchuk’s contract crossed that line. If you think that the line should have been farther back, fine. But I think the genie has been in the bottle a little longer.
Hockey Blogger at Pensburgh.com
All of the contracts except for Kovalchuk involve players that can reasonably play until their 40,
This is where I disagree. Only 32 (out of countless) players have played into their 40s since 1980 since 1980. It’s not reasonable to assume anyone will play until they are 40.
Intelligent opinion does not follow the transitive property
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Jul 27, 2010 4:12 PM EDT up reply actions
Zetterberg and Hossa are elite talents in my opinion, and would fall into that small category of players that can still contribute positively at that age.
Franzen less so, but his contract is minor compared to Kovy’s. His MAS is only about $1.5M more than his cap hit, and it isn’t for that long. Even though his contract is for a long time which suppresses the cap hit, it’s not worth it for the NHL to get their panties in a bunch and go after him since the Red Wings aren’t gaining a whole lot. I mean, every team has some players that are getting paid more than their cap hit, but it’s not worth it to attack them all for it if there’s no significant gaming of the system. Kovalchuk’s cap hit would be $6M even though he gets paid $11.5M for 5 straight years. The difference is obvious, to me at least.
Hockey Blogger at Pensburgh.com
Zetterberg and Hossa are elite talents in my opinion, and would fall into that small category of players thatcanmight possibly, maybe if everything works out right, they avoid injuries and their decline is less fast than most, still contribute positively at that age
It’s more likely than Kovi contributing at 44 (or 43, 42, 41), but it’s still extremely unlikely.
Intelligent opinion does not follow the transitive property
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Jul 27, 2010 8:29 PM EDT up reply actions
Yes, but their contracts aren’t as big of a rip-off as Kovalchuk’s. That’s why the league cares.
Hockey Blogger at Pensburgh.com
DiPietro also signed his deal as an RFA, correct?
Cидни Kросби: Александр Oвечкин, он твой папа теперь
матовая Клими, Михал нуивирт ваш папа теперь
Red Line Station: for Capitals fans who can bear reading something less intelligent than a story at Japers' Rink
Follow me on Twitter!
Not sure. I don’t know how it would affect the valuation of these contracts.
Hockey Blogger at Pensburgh.com
His RFA years would theoretically come cheaper, meaning a UFA with DiPietro’s value would be paid more, I guess.
Cидни Kросби: Александр Oвечкин, он твой папа теперь
матовая Клими, Михал нуивирт ваш папа теперь
Red Line Station: for Capitals fans who can bear reading something less intelligent than a story at Japers' Rink
Follow me on Twitter!
by red army line on Jul 22, 2010 1:31 PM EDT up reply actions
Oh ok. If I understand you, that still wouldn’t change the fact that Dipietro doesn’t belong in the discussion of contracts that should have been nullified, right?
Hockey Blogger at Pensburgh.com
Yep.
Cидни Kросби: Александр Oвечкин, он твой папа теперь
матовая Клими, Михал нуивирт ваш папа теперь
Red Line Station: for Capitals fans who can bear reading something less intelligent than a story at Japers' Rink
Follow me on Twitter!
by red army line on Jul 25, 2010 2:34 AM EDT up reply actions
Wasn’t the Hossa deal also unique when it was submitted and accepted?
I fail to see how unique = unacceptable by the current rules.
Playing Devils' advocate since 1982.
I don’t think so; the Franzen and Zetterberg contracts that came before it were very similar in my opinion.
A lot of managers have structured contracts to take advantage of the CBA loophole, and there was an escalation in terms of pushing the envelope, but there are important differences in the Kovy contract that put it outside the bounds of reason imo.
Hockey Blogger at Pensburgh.com
We got here by teams pushing the limits and the league allowing new precedents. What is it about this deal that is any different than any other limit pushing deal that came before it?
Playing Devils' advocate since 1982.
I should clarify:
What is it about this deal that is any different than any other limit pushing deal that came before it at the time it was submitted and accepted by the league?
Playing Devils' advocate since 1982.
I can’t speak for the NHL, but the kicker for me is that we’re dealing with Kovalchuk. The other comparable forwards (Z, Franzen, and Hossa) are much more complete players than Kovy. Sure they might not play until the end of their contracts, but they bring tools to the table that can still be valuable when they’re in their late 30’s and early 40’s. That’s not Kovalchuk; he’s a one trick offensive pony. When he’s 34 years old, there’s no way he’s going to play another ten years, because he won’t have the skill-set to compensate for his loss of offense.
Coupled with the fact that no one’s salary has an LAS for longer than 4 years, and that it’s well above league minimum, all of these contracts were different when they were accepted. You look at them and say “at this age, these can be fourth line players making fourth line money.” That ain’t true for Kovy’s deal.
Hockey Blogger at Pensburgh.com
I meant in a contract compared to contract sense. I see how this one relates to all of the other ones in the past, but how do they compare to one another if you laid them all out in a chronological time line?
For instance, how does the Kovalchuk contract compare to the most recent contract, Hossa’s? And how does Hossa’s contract compare in a “pushing the limits” sense to the Franzen contract set just months prior. And, chronologically, how did the Franzen contract compare in a “pushing the limits” sense to the one before it?
It goes along with my sense that for all that this contract is ridiculous on its own, if one were to see the progression of how we got here, it probably wouldn’t seem so bad. Unfortunately, I have neither the time nor ability to conduct such a study.
I thought maybe in your data gathering you might have already had something close to what I was asking.
Playing Devils' advocate since 1982.
Unfortunately I haven’t. It sounds like a really good idea though, and could definitely help put things into perspective.
Hockey Blogger at Pensburgh.com
I can’t speak for the NHL, but the kicker for me is that we’re dealing with Kovalchuk.
So we have rules for each specific player instead of general rules that apply to all?
First off, we don’t have rules. As I’m sure you’ve noticed, a lot of people are upset that there aren’t any specific recommendations or guidelines that describe how this process works. Given the uncertainty that revolves around this issue, I’m speculating as to what might be acceptable arguments.
If the Devils try to say “Kovalchuk wants to play until he’s 44,” I think it would be understandable if the league turns around and says (in more politically correct terms): “Kovalchuk is a one trick pony. Unlike Hossa, Z, Franzen, and others, Kovalchuk won’t have anything to offer to his team after his goal scoring ability dwindles to average (which will likely be around 34 or 35). Factoring in that he already is a poor defensive player and a bad Corsi guy, the claim that NJ would still want Kovy to play for another ten years thus seems, on its face, unreasonable.”
Hockey Blogger at Pensburgh.com
Beyond that, if he/they truly expect him to play until he’s 44 then there should be no issue with having a more even salary distribution through the tail end of the contract (even something like 4m/year as opposed to league minimum).
by SmellOfVictory on Jul 27, 2010 12:02 PM EDT up reply actions
"Kovalchuk is a one trick pony. Unlike Hossa, Z, Franzen, and others, Kovalchuk won’t have anything to offer to his team after his goal scoring ability dwindles to average (which will likely be around 34 or 35).
I don’t think it would be unreasonable to argue that Hossa wouldn’t be expected to contribute much at 42, 41, or 40. Or that Franzen (a power forward who has a history of injury problems, including knee problems) is expected to contribute anything, at all, past his 37th birthday at all, and that’s being generous. And really, expecting any player in his 20s to contribute much at 37+ is a pretty unreasonable assumption. Not that it’s impossible, but it’s pretty improbable.
That’s why the “extreme” argument for Kovi’s contract is so bad. Because other contracts
Intelligent opinion does not follow the transitive property
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Jul 27, 2010 12:35 PM EDT up reply actions
Franzen and Hossa are better defensive and Corsi players than Kovalchuk. By my estimation, that means they’ll have more to offer in their late 30’s and early 40’s than Kovy.
We can quibble forever (and lament our inability to predict the future perfectly) but that’s where I stand at this point.
Hockey Blogger at Pensburgh.com
Yes
I’m not sure, but I don’t think ti would be hard to prove that power forwards that have had major knee surgery are not likely to play past their 37th birthday. Can you break that down adn give a % on Kovi contributing past 40 and Franzen past 37.. i bet both would be close (and both would be < 1%). I mean Kovi’s might be .0001% and Franzen’s .001%, so Franzen might be 10x more likely to contribute. But it’s still awful
I mean only 14 wingers have played into their 40s since 1980. Any contract that gives a winger money into his 40s (like Franzen and Hossa’s) is suspicious.
Intelligent opinion does not follow the transitive property
Jibblescribbits: C'mon over and waste some time
by Jibblescribbits on Jul 27, 2010 4:00 PM EDT up reply actions
I see your Franzen point, and it makes me more suspicious of the contract. But as I mentioned above, the Red Wings really aren’t gaining a whole lot from this, and I can see why the league might not want to tie up this SPC if there’s no major difference involved.
Hockey Blogger at Pensburgh.com
Well the CBA is an attempt at “rules,” but the larger point is why is it (whatever “it” is) different for a player “like Kovalchuk.” The difference in these contracts is one of degree, not kind. They are all designed to get around the CBA as you point out below, but they are all in compliance with the CBA as it is written. No one can say with certainty what will happen over the next 17 years. Id ask though whats more likely, Luongo playing at 42 (and turning 43 near the end of the season) or Kovalchuk playing at 43 (and turning 44 near the end)? Do we really think any of these guys are going to play these contracts out? If the answer is no or probably not than the Kovalchuk contract, while extreme, is valid. Otherwise you’re setting up different "rules’ for different players/teams.
This clearly demonstrates the extremity of the contract but it still doesn’t show how the deal violates the CBA. The salary structure is in line with what is allowed in the CBA and there is no limit to contracts written into the CBA.
None of them directly violate the CBA, but it’s pretty clear that they are all designed to avoid it. The CBA put a cap in place in order to bring greater parity between large and small market teams; these front-loaded contracts that take a player into their likely years of retirement allow more financially-endowned teams to circumvent the goal of the cap to some extent, as the bulk of the salary is paid during years when the player is almost certain to be active, and they would forfeit very little salary if they were to retire during the tail end of said contract. This provides extra incentive for players who want larger sums of money to play for franchises with large budgets, partially neutering the salary cap.
@elesias: The difference between Kovalchuk’s contract and the others is in how extreme they are: that is all. It is important, however. To clarify the situation for you, pretend the extremity of the cap circumvention in a given contract is actually a wind velocity. So Zetterberg’s is a moderate wind, Hossa’s is a stiff wind – maybe it knocks a branch or two off a tree. Kovalchuk’s is a fucking hurricane, and it’s going to throw a pain of glass into someone’s grandmother and kill her. The fact that they can all be categorized as boundary-pushing is of only minor relevance; at some point, there is such a thing as going “too far”, and the Devils have apparently found that point.
by SmellOfVictory on Jul 27, 2010 12:03 AM EDT up reply actions
But that is my point, if it doesn’t violate the CBA, one can huff and puff all they want but the contract is still a valid one. Its a loophole and until its closed these contracts, while ridiculous, are not violating anything.
That is for the arbiter to decide at this point. I’m not a legal expert by any means, but at some point a contract can be considered ridiculous (e.g. what would you say if Semin, for example, was signed to a 30-year contract? To my knowledge that wouldn’t directly violate the letter of the CBA, either).
by SmellOfVictory on Jul 27, 2010 9:04 PM EDT up reply actions
“signed in good faith”
the arbiter just has to decide that it wasn’t.
Cидни Kросби: Александр Oвечкин, он твой папа теперь
матовая Клими, Михал нуивирт ваш папа теперь
Red Line Station: for Capitals fans who can bear reading something less intelligent than a story at Japers' Rink
Follow me on Twitter!
by red army line on Jul 28, 2010 4:01 AM EDT up reply actions
Comments For This Post Are Closed
Secondary Sidebar
User Tools
FanPosts
Community blog posts and discussion.
Certain photos copyright © 2012 by Associated Press or Getty Images. Any commercial use or distribution without the express written consent of Associated Press and Getty Images is strictly prohibited.
