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A Possible Long-Term Effect from the NHL's Ilya Kovalchuk Contract Rejection

I wonder if anyone told Ilya who was represented the PA in this arbitration and how he failed in previous negotiations to the <em>same person</em> arguing the NHL's case. (Photo by Bruce Bennett/Getty Images)
I wonder if anyone told Ilya who was represented the PA in this arbitration and how he failed in previous negotiations to the same person arguing the NHL's case. (Photo by Bruce Bennett/Getty Images)
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I know some of you may be sick and tired of reading about Ilya Kovalchuk, the league's rejection of his contract, and arbitrator Richard Bloch's sustaining of that rejection. However, there's a very important angle regarding this entire issue that's going to have a long-term effect on what the NHL will want to do with respect to the salary cap and standard player contracts.  Don't worry, I'll keep this short and there will be more discussion about what the people really want: Colin White and why he's not a bad #3 defenseman.

On Friday, I asked NHL deputy commissioner and chief legal officer Bill Daly for some clarification on what the "line in the sand" is for future SPCs. While Daly didn't definitely state what that line is, he did point out plenty: what the league will consider in evaluating future deals, that all 30 NHL teams are informed of what will and will not be allowed, and this interesting answer.    For the purposes of this post, keep this in mind:

John Fischer: Excellent, thank you.  Before I put anything up; I just want to make sure I have this right: There won't be any public statement of what the limits are; but all the clubs know what they are.  Moreover, they consult the league if there is a concern in advance of offering or registering a SPC.  Is this correct, or is there something wrong or missing?

Bill Daly: Yes, with one caveat.  At this point I wouldn't rule out the possibility that we may further discuss with the Union to see if "bright lines" can be established.  Absent those "bright lines," it will be on a case-by-case, with existing guideposts established, the GMs understanding our concerns and sensitivities, and always with the ability of the Clubs to reach out to us to dicuss [sic].

Again, I thank Mr. Daly for taking the time to read my questions and actually answer them with some detail.  Now, read this New York Post article by Larry Brooks. It's a must-read, so please check that out and then come back here.  Puck Daddy highlighted it today, focusing on how the NHLPA hired a re-tread to represent the union in arbitration - who lost again to the same lawyer representing the NHL.  That the PA couldn't get  or  wouldn't pay more for someone else for a rather important and high-profile (in the world of hockey) arbitration case is disappointing and/or infuriating, depending on your view.   Or hilarious, if you supported the NHL all the way through, though I don't think you should laugh about this in the future.

If you haven't connected the dots yet, there here it is in this crucial point made by Brooks, emphasis mine:

Slap Shots has been told by several sources that the NHL likely is to present a new version of the hard cap next time around where what has been the midpoint will actually become the ceiling and in which the band between high and low will be as narrow as the low-revenue, floor-hovering teams will permit.


But wait, it would be significantly lower than that, even, because the league is believed prepared to demand that the players' percentage of the gross be reduced from 57 percent to 50-52 percent, with all one-way contracts within an organization counting against the cap.

This in addition to strict term limits on contracts, controls relating to front-loading; and changes in the manner cap charges are calculated on multi-year deals. Plus, who knows what other give-backs?

Given what Daly told me on Friday, let me be bold and suggest that the NHL can do both to some degree right now.

I don't believe the NHL has to even wait until 2012 for the next CBA to essentially establish a term limit on contracts.   They can simply reject a SPC on the grounds they deem as "intent to circumvent," thanks to the precedent from the arbitration hearing.  Sure, many teams probably won't offer an extremely long contract now - but that's still a limit of some kind in practical effect.  The same can be said for front-loading.  If it crosses what the NHL has implicitly defined, then it's not going to be allowed.  Neither may be fully eliminated right now, but again, the NHL told all the teams what is and isn't acceptable and they'll review each SPC individually.

Still, the NHL can go to a fractured, headless, and seemingly lackadaisical PA right now to establish some "bright lines" that will drive their desires home.  They already got beaten in arbitration, I can't imagine they'll do better in a straight-up negotiation. Should the NHL get what they want; then when 2012 arrives, they can point to the union agreeing to these "bright lines" back in 2010 or 2011, and simply codify them in the next CBA.  There's your limits, right there.  Or they can take it a step further in negotiation.  Either way, the NHL's got the inside track on adding limits on contract structure and SPC length right now.  You can be confident they'll build on that in other negotiations.

Now, we don't know what the limits are and we may even agree that they are sensible once they are revealed.  But it's not our earning power being limited, we're just the fans.  I would think that most players would not really be supportive of such a move.  If not for themselves, then for their teammates.   Of course, I'd thought the players would collectively get their act together within the NHLPA and get an executive director for a high-profile, precedent-setting arbitration hearing, and, well, they didn't.  They still don't have a clue or a leader from my point of view.

No, I don't believe this contract rejection is going to cause any labor strife.  But I can't believe that this is a simple case of the NHL rejecting a "bad contract."  There can and could easily be a long-term effect, and that could make the CBA talks in 2012 even more harrowing.

Thanks for reading and please let me know your thoughts in the comments.  I don't think this is a far-fetched conclusion given what Daly told me and what Brooks wrote yesterday.  But perhaps you feel differently? As an aside, unless there's something big happening tomorrow, I'm once again defending Colin White (again? Read here and here).  So get pumped for that in the meantime.