Re: NHL is still investigating the contract of Savard, Hossa, Pronger and Luongo
posted at 8/10/2010 5:25 PM EDT
In Response to Re: NHL is still investigating the contract of Savard, Hossa, Pronger and Luongo
[QUOTE]I'm not surprised at the decision or the subsequent investigations. I wouldn't have been overly surprised to see things go the other way, either. The whole thing turns on some unsubstantiated language regarding circumventing the cap. The CBA provides no examples of what this means, and this was the basis of the NHLPA grievance as I understand it. No one knows quite what that phrase means. Block has, in effect, said that this is an example. Now the NHL is considering applying that example to the existing contracts. I think the definition of circumventing the cap should be allowing you to give more cash in player salaries than the cap and negotiated cushions allow. That's exactly what these deals allow. The Bruins are effectively deferring $3M of the cap hit on Marc Savard's salary until he's in his late 30s. If you add up the salary dollars for this Bruins roster, not including any bonuses, the total salary committed is $64.2M. If Seguin and Recchi hit their bonuses, add another $3.5M+. Add the penalties and buy outs ($2.75M+) and the Bruins could be writing payroll cheques for $70.45M, or about $11M more than the cap is supposed to allow (more like $6M with the bonus cushion, but that $5M would be carried over...). That's circumventing the intent of the cap. There's a good reason for the NHL to fight this - they've argued that X% of revenues is the mason-dixon line for a healthy league, so how can they let teams blast past that line without blinking? As for the existing contracts, I'm not sure the NHL would have won the same case with any of them as they did with Kovalchuk. The NJ deal magnifies the problem 10 fold in length, high-end pay-out, and length of the 'tail'. In other words, it's sufficiently obscene to override the vagueness of the "circumvent the cap" language. Now, though, with that precedent in hand, the NHL is in better position to reject those earlier contracts. I think it's unlikely that they do, but I can see several scenarios where it's possible. Even the Hossa deal - yes, he played a year under that deal, so not only would Chicago hve to revise his contract or lose him, they'd have to pay some kind of penalty against the cap. Finally, though, the argument would come down to two interpretations of what these contracts do: Con contract says that they seek to circumvent the cap by taking on walk-away years the team will never pay because the player will retire and therefore take a large cap hit (more than both salary and production) with him. Pro contract says look, players decline as they age, and with 35+ contract provisions, it's tricky for older but still effective veterans to get much security - and given that older vets have more established or complicated family situations, it's unfair to expect them to move year to year just to keep playing. By X age, the team and player agree that it's likely he'll be a veteran role player and not the superstar he is right now. If we were to sign 43 yr old Ilya K. for one last kick at the Cup, we probably would offer him NHL minimum and maybe some bonuses. 26 yr old Ilya accepts that on behalf of 43 yr old Ilya - that's what we agree he'll be worth. So that's what the contract will provide for. This is the same deal as escalators for emerging players, who get a raise each year because we all assume experience will make them better. So what's the big deal about doing it in reverse? We want to keep this player for 17 years. Right now, he's worth $10M, but he won't be worth that much in 17 years. We're just being realistic. In the end, I think they grandfather the existing deals and look to change the language in the CBA before next July 1 so that total salaries paid cannot exceed the cap and bonus cushion, but teams will have the flexibility to pay out different amounts in different years rather than stick with a flat average cap hit.
Posted by Bookboy007[/QUOTE]
Just got home to read you analysis, I would agree with DrCC the Lamirello-Kovy contract was deliberate at this point. I have the CBA on my desktop and failed to see that the NHL can review existing contracts. Supreme Court decision Dartmouth vs. NH established the fact contracts are legal even under differing constitutional bylaws. I am not a constitutional lawyer but I would believe the provision allowing the NHL to review existing contracts is illegal or unconstitutional. if not it would be a jurisdicational nightmare. Grandfathering the existing contracts is the only way to legally handle the matter under that thinking. As for the arbitrary 40 year old standard for Savard, well, I don't buy it. Savard's contract circumvents the intent of the cap. The age is arbitrary! I am beginning to think like DrCC that this was an attempt by the league to establish a boundary of contract lengths before the next CBA. Personally, no contract should be longer than 5 years. The amount of the contract though should also not be limited. The cap was instituted for the owners/GMs to live with a budget. If these people cannot balance their budget with the current revenue sharing system of the NHL then let Phoenix go to Hamilton!