24 hours have passed since the Ilya Kovalchuk decision was released and a number of details have come to light that we openly wondered about last night. News has started to leak out that confirms our previous report that the league will be entertaining the idea of investigating other long-term deals following the Kovalchuk rejection being upheld.
Most media outlets will focus on the ‘four horsemen’ of front-loaded deals that were singled out by name in Bloch’s decision (which can be read in it’s entirety here): Marian Hossa, Chris Pronger, Marc Savard, and Roberto Luongo. However, upon further review the league may currently be investigating as many as eleven contracts for violations of the CBA.
The most important piece regarding this development is the wording and details Bloch discusses in Footnote 23 of his decision:
23 It is true, as the Association observes, that the NHL has registered contracts with structures similar to the Kovalchuk SPC PA Exh. 8 reflects a list of 11 multi-year agreements, all of which involve players in their mid to late 30’s and early 40’s. Most of them reflect reasonably substantial “diveback” (salary reductions that extend over the “tails” of the Agreement). Of these, four such agreements, with players Chris Pronger, Marc Savard, Roberto Luongo, and Marian Hossa reflect provisions that are relatively more dramatic than the others. Each of these players will be 40 or over at the end of the contract term and each contract includes dramatic divebacks. Pronger’s annual salary, for example, drops from $4,000,000 to $525,000 at the point he is earning almost 97% of the total $34,450,000 salary. Roberto Luongo, with Vancouver, has a 12- year agreement that will end when he is 43. After averaging some $7,000,000 per year for the first 9 years of the Agreement, Luongo will receive an average of about 1.2 million during his last 3 years, amounting to some 5.7% of the total compensation during that time period. 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 are being investigated currently with at least the possibility of a subsequent withdrawal of the registration. It is also the case that the figures in Kovalchuk’s case are demonstrably more dramatic, including a 17-year term length, a $102,000,000 salary total and precipitous drop that lasts for the final six years of this contract.
Bloch reveals that “those SPCs” are being investigated currently by the league. At first glance, most would attribute that phrase to mean the four examples specifically identified in the footnote. But read the entire note again. In the first part, Bloch seems to be acknowledging the NHLPA’s Exhibit 8 (11 multi-year contracts with varying degrees of diveback’s have been approved) was presented as evidence “to suggest that the League’s concern is late blooming and/or inconsistent.”
He then proceeds to give “several responses” referring to “contracts” that could very well mean that same list of 11 included in Exhibit 8. THW was unable to obtain a copy of the referenced Exhibit 8, but TheCheckingLine.com identified 17 front-loaded contracts currently in place:
BOS – Marc Savard – $22.5M over the first four seasons, $2.55M over his final three.
CGY – Miikka Kiprusoff – $33.5M in his first five seasons, $1.5M in his fiinal year.
CHI – Marian Hossa – $59.3M over his first eight seasons, $3.5M over his final four.
CHI – Duncan Keith – $65.76M over his first ten seasons, $6.24M over his final three.
DET – Henrik Zetterberg – $60.15M over his first nine seasons, $5.25M over his final three.
DET – Johan Franzen – $36M over his first seven seasons, $7.5M over his final four.
MTL – Scott Gomez – $41.5M over his first five seasons, $10M over his final two.
NYR – Chris Drury – $30.25M over his first four seasons, $5M on his final year.
NYR – Wade Redden – $29M over his first four years, $10M over his final two.
OTT – Jason Spezza – $40M over his first five seasons, $9M over his final two.
PHI – Danny Briere – $47M over his first six seasons, $5M over his final two.
PHI – Kimmo Timonen – $30M over his first four seasons, $8M over his final two.
PHI – Chris Pronger – $33.2M over his first five seasons, $1.5M over his final two.
TBL – Vincent Lecavalier – $92.5M over his first nine seasons, $2.5M over his final two.
TBL – Ryan Malone – $23.5M over his first four seasons, $8M over his final three.
TBL – Mattias Ohlund – $18.5 over his first four seasons, $6.75M over his final three.
VAN – Roberto Luongo – $57M over his first eight seasons, $7M over his final four.
The league may be investigating four, eleven, or any number of contracts in between, but keep in mind that the investigation(s) could be simply a front. The NHL needed to open the door on these contracts in order to discredit the NHLPA’s chief argument that the league is suddenly coming down hard on Kovalchuk after allowing countless others. Whether Gary Bettman and the powers-that-be seek to have any of these contracts de-registered remains an enormous question.
THW legal analyst Joseph Romano echoed similar thoughts when he was reached for comment on this story:
“Footnote 23 represents the most important part of Arbitrator Bloch’s 20-page opinion. It’s importance is two-fold; first, it represents the only section directly focusing on the strongest of the NHLPA’s arguments, while quickly dismissing the argument without truly reaching its merits. Second, it demonstrates that the NHL has no intention of stopping with Kovalchuk’s deal. The wording in footnote 23 is slightly ambiguous, but it is safe to read the footnote as stating the NHL is investigating all 11 of the referenced deals. While Gary Bettman has alluded to such an intention, it remains to be seen if this was posturing solely aimed at dismissing the NHLPA’s argument, or if the NHL will truly investigate and take action on the contracts already in place.”