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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was signed under the Jeff Vanderbeek regime, and Vanderbeek — who had a tumultuous time as Devils owner — has since been replaced by Philadelphia 76ers owner Josh Harris.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.

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