What Will You Be Doing in 17 Years?

Well if you are current NHL and now formerly New Jersey Devils’ winger Ilya Kovalchuk, you thought it was going to be playing hockey for the New Jersey Devils still. The only problem is that the NHL back on July 20 ruled that the deal was invalid and voided it. The contract was initially supposed to be for 17 years and worth a whopping $102 million. No that is not a misprint, it really was for 17 years. That means that Kovalchuk, now 27, would have been 44 when his contract expired.

Ilya Kovalchuk

The NHL however quickly voided that contract, claiming that it violated the league’s salary cap under its current collective bargaining agreement. The NHL Players’ Association responded immediately by filing a grievance against the league. The hearing on the matter was held last week when arbiter Richard Bloch was assigned to hear the issue. His ruling came out this week, and he sided with the NHL, stating that the contract clearly was a retirement contract designed to try and circumvent the NHL’s current collective bargaining agreement. The league has a current salary cap in place; however, by extending Kovalchuk’s deal over the absolutely absurd 17 years, the Devils had hoped to get around that issue by extending his payments over an extended amount of time that would allow him to collect more money than the team normally would be allowed to pay under the league’s current cap. The deal though was front loaded so that Kovalchuk would make most of his money up front and only earn an average of $500,000 over the last five years of the contract. These sorts of retirement deals have been tried in the past, and some have even succeeded; however, none have so blatantly flown in the face of not only the NHL’s collective bargaining agreement, but also common sense. This decision puts Kovalchuk back on the market for the time being, and the New Jersey Devils scrambling to try and put another deal together that will comply with the rules but also keep their superstar in New Jersey.

The significance of this decision though goes beyond just New Jersey and professional hockey. Given the state of other professional sports leagues, most notably the NBA and the NFL, both of whom are in serious danger of having lockouts in the near future if new collective bargaining agreements cannot be negotiated and decided upon, this decision gives at least some glimpse into what the law thinks is reasonable in terms of players’ contracts and how teams’ managements are allowed to structure deals with their star players. It should be interesting to watch the future unfold not just for Ilya Kovalchuk and the NHL, but also for the rest of professional sports over the next couple of years.

–Richard Jacques

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