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The NHL’s Mistake In Reviewing Long-Term Contracts

The windfall from systems arbitrator Richard Bloch’s decision to uphold the NHL’s rejection of Ilya Kovalchuk’s 17-year, $102 million agreement with the Devils spread past the player and organization.

The NHL, fresh off the empowering decision, have decided to investigate similar deals to decide whether or not those contracts violate the terms of the collective bargaining agreement. This decision by commissioner Gary Bettman could alienate fans and, far worse, impact the credibility of those running the league.

Chris Pronger is one of four players whose contracts are under investigation for possible cap circumvention. Photo Credit: Bruce Bennett/Getty Images

In his ruling, Bloch made sure to mention four other long-term contracts that are structured similar to the rejected Kovalchuk deal. Those deals – given to Robert Luongo, Chris Pronger, Marc Savard and Marian Hossa – all were front-loaded deals that help drive down their cap hit.

Bloch noted that these deals haven’t escaped the eye of the league.

“The apparent purpose of this evidence is to suggest that the League’s concern is late blooming and/or inconsistent. Several responses are in order: First, while the contracts have, in fact, been registered, their structure has not escaped League notice: those SPCs [standard player’s contracts] are being investigated currently with at least the possibility of a subsequent withdrawal of the registration.”

There’s one key issue with that last statement – “subsequent withdrawal of the registration.” Two players, Hossa and Pronger, already played under these contracts. Denying both players the ability to play out a contract that was already approved would be ridiculous. If the NHL had an issue with this deal, then they should have rejected the deal or reviewed it closer. The league should not deny the players the ability to play under a guaranteed contracts which were already approved last season. Should the league then review the contract of Henrik Zetterberg? By reviewing this deal, the NHL is setting a bad precedent – one that will tell the players that, even if a deal was approved at one time, it can be rejected at any point.

The other two players – Luongo and Savard – begin their extensions this season. In an e-mail to the Vancouver Sun, Canucks general manager Mike Gillis confirmed that the league is investigating Luongo’s contract. Savard’s contract, according to Bruins’ G.M. Peter Chiarelli, has been under investigation since its filing in December. The key point with these contracts are that both were approved despite investigations. Bloch’s decision shouldn’t mean that the league renews its vigor on finding “cap circumvention” within any of their deals.

Read after the jump to see why I believe the league is setting a bad precedent for future contracts with these new investigations.

Overall, the league is setting a few bad precedents. If the league feels a deal circumvents the cap, they should do their due diligence before registering the contract. Instead, the league has continually approved these deals, even if they didn’t fully believe they were fine. By going back and reviewing contracts, the league is admitting a weakness in the upper ranks. They don’t believe those responsible for approving deals are correctly doing their jobs. If any of these deals are rejected, especially after being signed months ago, the league will look like it now has a personal agenda to eliminate all front-loaded, somewhat questionable contracts. If the NHL didn’t like the deals, they should have been rejected immediately, like the Kovalchuk contract.

When these deals are approved by the league, both a player and team can move on and fill other holes as needed. Teams who believe their rosters are set can now lose valuable pieces, and with recent moves, some may not have the cap space available to re-sign those players. Each of these players had their contracts approved by the league, and each deserves to play under those contracts. The league’s upheld rejection should dramatically reduce the number of teams attempting to sign players to similar contracts. They’ve now limited the possibility of these deals, and there’s no need to further the point by targeting already approved contracts. If this continues, the NHL would look something like this:

The league would look like Ari Gold, running around reviewing and possibly denying already approved contracts. And while the scene is hilarious (one of my personal favorite moments from last season), it would make the NHL look foolish and immature. There is no need to attempt to “right” the “wrongs” previous G.M.s committed. The Kovalchuk rejection already set a precedent, and this needless meddling in already approved contracts serves to make the league officials look incompetent.

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