Marian Hossa

Why Bloch’s Reasons Fall Short of Satisfaction

Ilya Kovalchuk Game 1Yesterday, I put up my initial reaction to the ruling that Ilya Kovalchuk’s 17-year, $102 million contract had been denied. The response was posted about an hour after the initial ruling, and quotes from system arbitrator Richard Bloch’s decision were scarce.

Eventually, quotes from the decision began circulate, and now, with more information, I can give a better opinion on today’s events. And, when looking at the quotes, I’ve come to find that Bloch’s evidence for his ruling doesn’t fully satisfy me. Bloch’s reasoning, while good, doesn’t provide a solid case against the Devils or the contract. After the jump, I provide my reasoning for this conclusion.

First Point of Contention – Age

One of the first quotes I read dealt with Kovalchuk’s age when the contract expired. Kovalchuk would be 44 when the contract ended, which is old for any professional athlete. That age, according to Bloch, made it unbelievable that Kovalchuk would play out his contract.

“…Kovalchuk is 27 years old, and the agreement contemplates his playing until just short of his 44th birthday,” Bloch wrote. “That is not impossible, but it is, at the least, markedly rare. Currently, only one player in the League has played past 43 and, over the past 20 years only 6 of some 3400 players have played to 42.”

Bloch is completely correct – it is quite rare for NHL players to continue their careers after 40. But we’ve seen this occur in recent seasons. Chris Chelios, the ageless wonder, played with the Atlanta Thrashers this season at age 48. Mike Modano, who turned 40 this summer, signed a one-year contract to play with Detroit this off-season. While it’s not common, it can be done.

Ilya Kovalchuk 3

One can assume that Kovalchuk may not play until he’s 44. But the left-winger has never suffered a major injury, and his style isn’t one of a power forward. There’s always a physical element in hockey, but Kovalchuk has managed to stay healthy during his career. As I said before, Kovalchuk also doesn’t play in front of the net, where players are continually cross-checked and beat up. He’s not an enforcer, and rarely does he fight. The wear and tear on Kovalchuk is significantly less than other players, and if he can continue to stay healthy then there’s no reason to assume he wouldn’t play until age 44.

Also, Bloch failed to take into account other similar deals. Marian Hossa’s contract brings him to age 42. Ditto with the contract Philadelphia gave Chris Pronger. Vancouver’s extension with Roberto Luongo brings the goalie to 43 years old. These three contracts, all front-loaded deals, were accepted despite driving the players over the 40+ plateau. What separates these players from others? One can argue that Pronger and Luongo play more physically demanding positions, lessening their chances of playing past 40. But those contracts were allowed by the league, while Bloch found age to be a reason to deny Kovalchuk’s deal.

I understand that age in this contract is a concern, but using that as a reason to disallow a contract isn’t strong evidence. With the league already approving prior deals that bring players past the age 40 plateau, age should not have been such a large determining factor in the decision.

Continue after the jump for further arguments against Bloch’s decision!

Second Point of Contention – Front Loading The Contract

Bloch pointed to the final six seasons of the contract as another reason to uphold the league’s rejection. Kovalchuk will make $98 million in the first eleven years of the contract, or 97% of the contract. He’ll then average $550,000 for the final six years of the deal. According to Bloch, this dip in salary assumes both Kovalchuk and the Devils assumed the left-winger would retire and not fulfill the obligations of his contract.

“…The dynamics of this SPC, with particular reference to its final six years, are such that there is scarce reason for either Player or Club to continue the relationship,” Bloch wrote. “One may reasonably ask, as the League does, whether a player who had been averaging some $9,000,000 a year will be satisfied to continue the rigors of an NHL season for a salary that (1) will average slightly more than $550,000 a year, (2) will represent a 95% reduction against previous average earnings and (3) will undoubtedly constitute compensation well below the then-applicable major league minimum…one may reasonably ask whether this Player would, at that point, accept such repositioning as an alternative to seeking continued employment outside the League or simply retiring.”

It’s here that Bloch makes a strong point. Those last six years are more than a bargain for Kovalchuk. That’s like buying a seven-year old Porsche for a few thousand dollars. The Devils far undersold the left-winger at the back end of the contract. As Bloch suggests, Kovalchuk would have no reason to play out those final years of the deal, and the Devils would save some four million dollars if Kovalchuk retired.

But, once again, the precedent has already been set, as the NHL has allowed several of these front-loaded deals to pass in the not-so-distant past. In the case of Luongo, the Canucks goalie makes an average of $6.7 million from the 2011-12 season until 2018-19 season, when he makes almost half that ($3.8 million). The final three years follow that drop, putting him near $1 million for those three years. In the final four years of his deal, Luongo will make close to $7 million. Most of his money, like Kovalchuk, will be made in the middle of the deal.

Hossa’s contract follows that same path. In the first seven years of his 12-year deal, Hossa will make $7.9 million. In the eighth year, that salary drops to four million. In the final four years of the deal, Hossa will make four million combined. Like Kovalchuk, Hossa’s deal is front-loaded, much like Kovalchuk’s contract.

Both of those contracts serve the same purpose – to drive down a players’ annual cap hit. Hossa’s cap hit is $5.275 million per season, and Luongo’s cap hit is $5.3 million per season. The back ends of their deals drive down their cap hit, much like the Devils’ did with Kovalchuk’s rejected contract. Each contract served to “circumvent” the cap, and for some reason the NHL allowed the two above without incident.

But I understand this point more than the first. The Devils, as I stated above, put a ridiculously low salary on the last six years of the deal. Luongo and Hossa make at least one million dollars in the final years of their deals. Even though a million dollars is minuscule amount for those players, it will probably compare to a veteran’s minimum. Kovalchuk’s base salary for those six years would fall far below that level. While you can’t assume the contract is a “retirement” deal, Kovalchuk would make far less than most veterans at that point in their career. The fact that the salary was so low was one of the reasons why Bloch disallowed this deal.

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Those two main points of contention shouldn’t have been the basis for Bloch’s decision. In the case of Modano and Chelios, it has been shown that players can play to 40 or older. Several players, including Hossa, have signed contracts that will take them past the age of 40. Yet, all of their deals were approved. Clearly, age wasn’t an issue with those deals, and Bloch’s use of it to uphold the NHL’s rejection doesn’t fit the bill.

His second point, in dealing with the back end of the contract, has more credibility. While other players have back-loaded deals, they make at least a million dollars in salary in the last few years. The last six years of the deal will pay Kovalchuk only $550,000, hundreds of thousands of dollars less than the other players mentioned above. It’s this point which brings more validity to the argument. However, with other teams manipulating cap hits using these front-loaded contracts, there should be no penalty for the Devils doing their own creative cap work.

In the end, Bloch’s reasoning behind the decision isn’t fully satisfying. As Tom Gulitti, beat reporter of the Bergen Record, said in a post yesterday:

From what I can tell, however, the NHL was able to convince Bloch to view Article 26 on “No Circumvention” in a broader sense and conclude that the though the debatable parts of Kovalchuk’s contact—17 years in length, ending at age 44, six low-pay years at the end— are legal under the CBA when taken individually, they add up to something that is not legal.”

When taking the parts individually, the deal doesn’t sound legal under the league’s current CBA. But, taken together, the deal fits within the parameters set by the NHL in previous decisions. Congrats to the NHL for setting a precedent with this case, but Bloch’s reasons behind the decision won’t satisfy me anytime soon.

Kovalchuk Photo Credits: Bruce Bennett/Getty Images and Al Bello/Getty Images

Hossa Photo Credit: The Associated Press

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