Skip to content

Dealing with the Devils: NHL reverses Kovalchuk punishment

Mar 6, 2014, 12:35 PM EDT

The NHL is set to reverse the punishment handed to New Jersey for the Ilya Kovalchuk cap circumvention incident, according to TSN’s Darren Dreger:

In September of 2010, the NHL fined the Devils $3 million and took away their third-round pick at the 2011 NHL Entry Draft — as well as a first-round draft choice in one of the next four NHL Entry Drafts.

The punishment was levied after an independent arbitrator ruled Kovalchuk’s 17-year, $102 million deal attempted to circumvent the league’s salary cap (the deal was heavily front-loaded, with Kovalchuk earning $95 million over the first 10 years.)

This summer, Kovalchuk surprised the hockey world by retiring from the NHL with 12 years and $77 million remaining on his deal with the Devils. As a result, New Jersey will have to pay a cap restructure penalty of about $300,000 until 2024-25 — when the contract was set to expire.

Regarding this year’s first-round pick…

New Jersey was set to forfeit its selection at the ’14 NHL Entry Draft after keeping its firsts in ’11, ’12 and ’13. It now looks as though the Devils will select 30th overall regardless of how they finish this year.

There will likely be more to follow on this story, most notably the league’s explanation for its decision. It’s worth noting that the Kovalchuk deal was signed under the Jeff Vanderbeek regime, and Vanderbeek — who had a tumultuous time as Devils owner — has since been replaced by Philadelphia 76ers owner Josh Harris.

UPDATE

The NHL has released the following statement…

The Devils recently applied to the League for reconsideration and relief from a portion of the original penalty, citing primarily changes in circumstances which, in the Club’s view, changed the appropriateness of the sanctions initially imposed.

After due and thorough consideration, the League has decided that a modification of the original circumvention penalty associated with the Kovalchuk contract is warranted.

The NHL also noted the Devils aren’t allowed to trade or transfer their right to the 30th overall selection at the draft.

  1. valoisvipers - Mar 6, 2014 at 12:41 PM

    The NHL should just rule on the validity of a contract and either accept it or reject it. This would avoid this type of thing from happening.

    • ibieiniid - Mar 6, 2014 at 1:00 PM

      yeah, but knowing lawyers, reviewing every contract in the league is a billion dollar a year job.

    • 950003cups - Mar 6, 2014 at 3:14 PM

      Glad they gave us the 30th pick. That’s what we were planing to pick at anyway this year. (j/k)

    • sabatimus - Mar 6, 2014 at 10:39 PM

      Look, you make a decision, you stick with it, regardless of what someone does afterward. The play by NJ was a blatant cap-circumvention and should be punished as such regardless of what Kovalchuk did.

  2. lowenni - Mar 6, 2014 at 12:41 PM

    Can understand other teams being angry, but I mostly think this is the right decision. Kovalchuk’s retirement had the potential to really hurt the franchise and if he isn’t playing on the team anyways and hurt the league in this way I don’t really see the reason to still levy the punishment on the Devils. The Devils already got punished enough with the departure of Kovy anyways.

    • c9castine - Mar 6, 2014 at 1:10 PM

      Yeah I have no problem with the easing up on the penalty. I’m mean, no need to kick a team when it’s down. Besides, why not just tell the team before the contract is signed it’s not valid. I’m not sure what the process is, but how about all contracts goth rough the league office for a check first or something then stuff like this doesn’t happen. ( I think that’s what valoisvipers is saying)

    • phillyphanatic77 - Mar 6, 2014 at 2:06 PM

      Please, Lou and Kovy worked together on that departure! The Devils would’ve had a much harder time selling the team with Kovalchuk’s albatross contract on the books. It may have been started with the players desire to go home but it was fully supported by the NJ front office. And it “coincidentally” came at a time during the agreement where the cap penalty to the team would be minimal. The team lost its best player but there’s no way the penalty should be reversed at the last minute.

  3. nickdesposito - Mar 6, 2014 at 12:42 PM

    I still don’t understand why they were the only team to be punished. Didn’t Chicago do this with Hossa? And Minny with Heatley? Tons more that I’m sure I’m missing.

    • Mike Halford - Mar 6, 2014 at 12:47 PM

      Vancouver with Luongo….

      • nickdesposito - Mar 6, 2014 at 12:51 PM

        Yeap, DiPietro too, Mike Richards, Yashin and the Islanders. I mean there are so many. It makes no sense why they just decided to enforce it with Kovalchuk and the Devils.

    • jb8383 - Mar 6, 2014 at 12:57 PM

      My guess is that Bettman wanted Kovy to sign with LA, bigger market team and not in NJ. Could be wrong but I always thought it was an unfair penalty.

    • hockeydon10 - Mar 6, 2014 at 2:14 PM

      IIRC it wasn’t so much the length, it was the expectation that he wouldn’t be playing NHL hockey when he was that old. Apparently a 44 y.o. hockey player (Kovy) isn’t as believable as a 42 y.o. player (Pronger, Hossa)

    • idonthavethebloodyoucrave - Mar 6, 2014 at 7:50 PM

      Pronger with the Flyers.

  4. ydj1120 - Mar 6, 2014 at 12:43 PM

    I bet Lou knew his plan to get that pick back if Kovy gave in to his desire to go back to Russia the whole time, and that’s why he didn’t give up the pick when the Devils went to the Finals. To all the people who say Lou is too old or he’s lost is touch…Lou is a genius. The franchise is lucky to have him; he is the best GM in all of sports.

    • bigtganks - Mar 6, 2014 at 1:16 PM

      No way. Mike Gillis is! #itsaprocess

    • c9castine - Mar 6, 2014 at 1:17 PM

      Ummm no.lets not forget that he offered that contract to kovalchuk, in the first place. He lost parise to free agency because the team was going downhill. Lost Paul Martin. Team is bad and going nowhere fast.

      • nickdesposito - Mar 6, 2014 at 1:43 PM

        Actually ownership went over his head for Kovalchuk. Which is why that owner is gone. He knew nothing about hockey (not that Kovy was bad). He lost Parise because he wanted to play for Minny….and they didn’t lose Paul Martin, they didn’t want to overpay for him. Don’t get me wrong he’s a nice player to have. But he wasn’t worth overpaying.

      • ydj1120 - Mar 6, 2014 at 1:50 PM

        Although I have no true evidence to refute your statement that “he offered that contract to [K]ovalchuk,” I think anyone who is familiar with how Lou has ran the franchise knows that he was not the one behind that contract. That had Vanderbeek all over it.

        He (Lou) also offered Parise the same contract that Minny did. Parise just wanted to go home. I can’t blame someone for wanting to follow his dream of playing where he grew up and where he was building his home with his fiance and wanting to settle down. It hurt the fans to see him go, but the truth is the vast majority of them would have made the same decision.

        Paul Martin jumped ship to go to the Penguins. Show me one GM who has never made a deal that in hindsight they wished was less money or less years. Who hits 100% of the time? It’s more about being consistent and the Devils will always be in the hunt at the end of the season. 3 times they haven’t made the playoffs since 1990, during which span they won 3 cups (and lost twice in the finals). History says the team will be OK.

      • ibieiniid - Mar 6, 2014 at 1:53 PM

        lol come on man, “[K]ovalchuk?” nobody here’s gonna criticize you if you just copy/paste his words with a missed capitalization.

      • 950003cups - Mar 6, 2014 at 1:54 PM

        #1 He didnt offer Kovalchuk the contract, Jeff Vanderbeek did. Even if he did, in 2 years he led us to the finals. Most GM’s, owners, and fans would be happy with that. I know we were.

        #2 He lost Parise to a team who offered him more money than we had at the time. Plain and simple.

        #3 Lou never made an offer to Paul Martin. Their relationship soured. Paul Martin wanted too much money for his production and he was always injured. On Paul’s side, he blamed the Devils for misdiagnosing his arm injury causing him to miss the olympics. Originally it was said he didn’t need surgery, and to let it heal. After several weeks in a cast it was determined he did need surgery.

  5. hockey412 - Mar 6, 2014 at 12:55 PM

    In this case, who is the “NHL”? Who decided to do this, I mean?

    • ibieiniid - Mar 6, 2014 at 1:16 PM

      i would assume the “NHL board of governors,” AKA, the owners. sure, they’re making a ruling on a competing team, but seeing as how that competing team has their OWN governor, I’d imagine they try to keep an impartial attitude in the room…. for karma’s sake.

      • hockey412 - Mar 6, 2014 at 1:27 PM

        That’s why I was asking – I was confused by the “NHL teams not happy with the leagues desicion…” tweet.

      • ibieiniid - Mar 6, 2014 at 1:46 PM

        well, the “league decision” is a simple majority vote, i believe. so naturally, the teams that voted against it aren’t happy.

      • ibieiniid - Mar 6, 2014 at 2:04 PM

        thumbs down, with no further effort to answer this man’s question. if i’m wrong, tell us the answer, smarta**es.

        this site never changes.

      • 950003cups - Mar 6, 2014 at 3:04 PM

        That is funny. How do you THUMBS DOWN a question?

      • ibieiniid - Mar 6, 2014 at 3:21 PM

        i never understood that. i’ve given up on that topic though. it irritates the HELL out of me when i ask a legit question and all i get is thumbs. it’s like why even click the thumb if you’re too lazy to reply with an answer. w/e

      • wingsdjy - Mar 6, 2014 at 4:04 PM

        Sorry, 950003cups. I just had to thumbs down your follow-up question.

        I’ll go sit in the corner, now.

  6. 950003cups - Mar 6, 2014 at 12:56 PM

    Love that it happened. But it’s a Bush League move. I have to admit. If I weren’t a Devils fan, I’d be fuming. But, I have a first rounder to look forward to.

    • moarjam - Mar 6, 2014 at 1:03 PM

      Nah. I hate the devils with a passion but I’m happy they got it back. It was complete BS they got it taken away. 50% of the league had players with identical contracts.

      • 950003cups - Mar 6, 2014 at 1:11 PM

        I do agree with the punishment being excessive and discriminatory. But I was under the impression that it was a non-negotiable decision. What would be if Lou gave up the 2012 pick? They’d give us 2 picks this year?

  7. esracerx46 - Mar 6, 2014 at 12:59 PM

    BS. Congrats to Lou for calling Bettman’s bluff. Bettman, you’re a pu$$y

  8. mclovinhockey - Mar 6, 2014 at 1:15 PM

    Bs

  9. pone27 - Mar 6, 2014 at 1:15 PM

    The reason why these big name guys with the same type of structured contracts arent getting punished is because those guys are still playing them out. Kovy didn’t just jump ship and retire, he left to go to another league. Different situation.

    The money talks guys.

    • jb8383 - Mar 6, 2014 at 2:04 PM

      but they were given the penalty before kovy left and no one could have predicted that

      • pone27 - Mar 6, 2014 at 2:45 PM

        Point taken.

  10. newjerseydevilsfanpuckcollection - Mar 6, 2014 at 1:22 PM

    Finally some great news for the Devils organization.

    Kovi royally screwed over this organization on so many fronts by retiring suddenly in the summer.

    No its not the leagues fault for this happening, its solely Kovi’s choice to retire.

    However, the NHL tried to make an example out of the Devils by giving them this penalty of the first round pick, and the fine. Now the Devils are still on the hook for 300K per year.

    Its ironic that many other teams have done the same thing with front loaded contracts (Luongo etc…) just not for the length that Kovi was given.

    Why was Vancouver not penalized with the front loaded deal for Luongo? Why not Detroit for the deal with Franzen?

    Not the NHL allows compliance buyouts for bad contracts, even front loaded ones. (Lecavalier, Bryz, Redden, Gomez etc…)

    Why did the NHL step into this deal initially? Because of Cap circumvention???? Because of the length?

    (As I have said before when the compliance buyouts were happening). How about the NHL forces any team that wants to do a compliance buyout is forced to dump one first round pick over the next 3 years.

    Want to see how fast the owners will give more reasonable contracts.

    This Kovi situation is not much different with many other NHL teams and what they did when contracts were on the table, excluding the length of the term.

    Now the NHL is giving a potential back door clause to any owner who wishes to drop a contract that THEY signed with the player and the LEAGUE approved.

    Yes I am a die hard Devils fan….but my rant is about the league and owners in general.

    Lets look at the facts:

    1. Long term contract
    2. Front loaded contract
    3. Working with the cap space

    Now a disgruntled player/owner wants to move along with his careers somewhere else for personal reasons or because they are not performing to the level they want to achieve.

    Which player am I talking about

    Kovalchuk?

    NOPE

    Luongo, St. Louis, Lecavalier, Bryzgalov, Gomez, Dipietro etc… This list can go on and on.

    Long term contracts don’t work (especially front loaded ones) but why were the Devils the sole organization to be penalized?

    here is my proposition to the League, NHLPA and the owners.

    The league needs to hold owners responsible for these contracts and make the owners pay dearly for burying players in the minors and for also a performing compliance buyout.

    If a players is injured, player retires or player passes away (lets hope this doesn’t happen) its a player decision or inability to perform and should not be the solely the owners fault.

    But to kill someones career such as Dipietro, Redden, Souray, Connoly etc.. just to take the numbers off the cap space is your own fault for signing the contract in the first place. Owners/GMs should NOT be allowed to bury any contract with any term deal longer than 3 years or over 3 million.

    Owners/GMs are to forfeit 1 first round pick over the next 3 years if they wish to perform a compliance buyout.

    Owners/GMs are to forfeit 1 second round choice should they waive a player who fails to be picked up with 3 yrs/3mil+ contract (refer to above)

    Players who retires (not due to injury or death) with more than 3 years left in contract will pay 100% back to the owners in which the contract term remains. And the owners will pay the 50% of that money to the NHLPA players fund and 50% to the League…plus 150% of the contract terms to remain on the CAP.(yes 150%…so 1 mil contract now becomes 1.5mil to cap)

    Owners may do front loaded contracts…where the contract can only be loaded by 10% each year (ie: 3 years deal. 1st year 1 million, 2nd year 900k, 3rd year 800k) [to all you math geeks out there I know that these would not be the actual numbers due to compounding factors...but rough idea]

    My opinions….but the owners/GMs need to take notice they the contracts they fling affect everything from ticket prices to the players lives.

    • lordfletcher - Mar 6, 2014 at 1:29 PM

      Jesus dude… Made it three words then gave up.

      Please attach cliff notes

      • newjerseydevilsfanpuckcollection - Mar 6, 2014 at 1:40 PM

        I’m just venting cause I am still pissed that the League still allows front loaded long term deals.

        And then only go after the Devils is complete BS to start with.

      • hockeydon10 - Mar 6, 2014 at 2:28 PM

        NJ, it’s not simply that they’re front loaded and it’s not that they’re long contracts. The league saw players signing contracts paying players until age 40 (Zetterberg, Franzen) or 42 (Pronger, Hossa) and decided that was believable, if stretching it a bit. Then they saw a contract paying a player until age 44 (Kovy) and called BS.

  11. canucks30 - Mar 6, 2014 at 1:32 PM

    The NHL should also reverse the cap recapture penalty against the Canucks for the Roberto Luongo contract then.

  12. kicksave1980 - Mar 6, 2014 at 2:44 PM

    I never agreed with the penalty at all. Good GM’s (and owners) are always going to find ways to game the system. If there isn’t (wasn’t) specific language prohibiting these types of contracts, how can you enforce a “non-written rule”? What is the point of a written CBA when one of the parties can use the arbitrary “violates the spirit of…” excuse? The NHL should’ve just taken note and fixed it in the next negotiation, which they did.

  13. hockeyflow33 - Mar 6, 2014 at 2:55 PM

    Good, they never should have been penalized in the first place

  14. bullwinkle88 - Mar 6, 2014 at 3:09 PM

    B.S. Why bother imposing a penalty in the first place if they never enforce it? So what if Kovy retired. That should have nothing to do with the penalty. The Devils broke the law.

    Case closed.

    This makes the NHL look like wimps.

    • ibieiniid - Mar 6, 2014 at 3:22 PM

      you seem ill-informed on this subject.

    • nj666 - Mar 6, 2014 at 9:38 PM

      what law?

  15. djshnooks - Mar 6, 2014 at 3:26 PM

    That is BS!

    Taking a higher rated player away from Buffalo to give them to New Jersey…there goes the Sabres chance at Thatcher Demko at the beginning of round 2.

    The best goalie in the draft will be taken with the #30 pick and the Devils…you heard it here first. Just watch…

    Disclaimer: I know that’s not literally what’s going on, speaking theoretically.

  16. imgoingtowichita - Mar 7, 2014 at 10:56 PM

    Charles Wang has also petitioned the BOG’s citing incompetence from his GM. Can I get my 1st back too?

  17. imgoingtowichita - Mar 7, 2014 at 10:56 PM

    Charles Wang has also petitioned the BOG’s citing incompetence from his GM. Can I get my 1st back too?

Sign up for Fantasy hockey

Top 10 NHL Player Searches
  1. J. Quick (1224)
  2. N. Horton (1026)
  3. C. Giroux (1015)
  4. A. Ovechkin (933)
  5. B. Bishop (925)