In July 2010, the New Jersey Devils surprised the hockey world by signing left winger Ilya Kovalchuk to a 17-year, $102 million contract, later modified upon the NHL’s objections over salary cap circumvention to 15-years, $100 million.
It was the most expensive contract in Devils history and among the richest in league history. The deal broke down as an average annual salary of $6.7 million per season, but was heavily front-loaded, with five seasons near the start paying Kovalchuk more than $11 million per.
After the dust settled on the Kovalchuk signing, concern was raised over how the Devils could afford to re-sign left winger Zach Parise, who was eligible for restricted free agent status (with arbitration rights) at the end of the 2010-11 season.
Unlike Kovalchuk, who the Devils acquired via trade from the Atlanta Thrashers in early 2010, Parise was a home-grown talent, a 2003 first round selection of the team (17th overall), and long considered the heir to the face of the franchise when legendary goaltender Martin Brodeur retires.
Devils fans were hopeful Parise would be re-signed and GM Lou Lamoriello made no secret of his determination to get him under contract, while Parise publicly expressed his desire to remain with the team. This mutual willingness to get a long-term deal done appeared shaken, however, when, on July 29, the two sides agreed to a one-year, $6-million extension that would take Parise up to his eligibility year for unrestricted free agency.
Lamoriello claimed the agreement was done to avoid arbitration, while allowing both sides an additional year to negotiate a long-term extension.
Ultimately, it was advantageous for Lamoriello to delay a lengthy deal for Parise until the summer of 2012, when the Devils will have more available cap space, and not risk losing key players to make room for his new salary or significantly hamper their efforts to add more depth.
Under the rules of the current CBA, because Parise is on a one-year deal prior to his UFA eligibility, the Devils cannot open contract talks until Jan. 1.
Given the Devils willingness to keep pace with the rising salary cap in recent years, and with just less than $25 million in available cap space for 2012-13, getting Parise inked to a front-loaded, multi-year deal worth between $6.5-$7.5 million appears a formality.
Yet there are a couple of potential stumbling blocks on that path.
The first is the Devils slow decline since their Stanley Cup championship in 2003. Lamoriello, praised as a genius for building the Devils into a powerhouse that, along with Detroit and Colorado, dominated the NHL for a decade, has struggled to replace long-departed stars such as Scott Stevens, Scott Niedermayer, Brian Rafalski, Bobby Holik and Jason Arnott.
Martin Brodeur and Patrik Elias, the only two players left from their last championship, are in the twilight of their respective careers.
Since Parise joined the Devils in ‘05-‘06, they’ve advanced to the second round of the playoffs only twice. Last year, with Parise sidelined for all but 13 games to a knee injury, they missed the post-season for the first time in 13 seasons.
New Jersey is currently sixth, two points up on eighth place in the Eastern Conference and their 2.59 goals for per game ranks in the bottom half of the league.
That’s given rise to concerns Parise will depart via free agency to a team with a better chance of fulfilling his championship dreams.
The other possible wrench is questions around the Devils’ financial health.
Rumors emerged in September that the “attendance-challenged and heavily indebted Devils” were on the verge of bankruptcy. That news was quickly dismissed by Lamoriello, but the speculation has never fully dissipated.
In November, Mike Ozanian of Forbes.com wrote that the Devils appeared skating toward bankruptcy, with debts of more than $250 million: “The debt is growing because Vanderbeek, unable to make interest payments, is capitalizing the interest.”
Ozanian drew comparison to the Dallas Stars, whose owner ultimately defaulted on payments, leaving the team in the hands of its creditors and run by the league as new ownership was sought. The result was a weakened Stars team operating on payrolls just above the league’s salary floor.
If the Devils end up in a similar circumstance, it will have a serious impact upon their roster. Lamoriello could be ordered to dump salary and wind up unable to afford a new contract for Parise, losing him to free agency next July.
Even if Parise were willing to stay, the Devils might be forced to gut their lineup to make that happen, which would make their chances of winning a Stanley Cup more remote.
Not long ago, the Devils re-signing Zach Parise to a long-term deal seemed a near-certainty. That, however, is no longer the case.
As long as the Devils remain in the playoff hunt, Lamoriello won’t trade Parise even if he knows he can’t afford to retain the winger. Still, the longer Parise goes unsigned, the chance he could be playing elsewhere next season grows.
Rumor Focus appears Tuesdays and Thursdays only on thehockeynews.com. Lyle Richardson has been an NHL commentator since 1998 on his website, spectorshockey.net, and is a contributing writer for Eishockey News and Kukla’s Korner.