Skip to main content Blog: Kovalchuk contract could be restructured by arbitrator

The Hockey News

The Hockey News

When the NHL Players’ Association filed a grievance Monday to dispute the NHL’s rejection of Ilya Kovalchuk’s 17-year, $102 million contract with the New Jersey Devils, it ran the risk of having an arbitrator restructure the contract if he or she sides with the NHL in the matter.

One source close to the situation told that one of the possibilities would be for the system arbitrator to reform the contract instead of rejecting it and if it were reformed, it would likely be to make the cap hit and salary flat, which would mean Kovalchuk’s contract would pay him $6 million per season for each of the next 17 seasons.

The source said that when the league rejected the contract, it cited two different provisions in Article 26 of the collective bargaining agreement, which deals with circumvention. One of the provisions would call for the contract to be declared null and void if the arbitrator sided with the NHL, the other calls for the arbitrator to reform the contract.

It’s possible, the source said, that the two sides would have a proceeding prior to the arbitration hearing that would spell out which of the two alternatives will be used if the arbitrator sides with the NHL. But since the case will undoubtedly be expedited, it’s possible the two sides could go into the proceedings not knowing what the ramifications are of the outcome.

This would obviously be a bigger problem for the NHLPA than the league. Whether the arbitrator declared the Kovalchuk contract null and void or reworked it to evenly distribute the cap hit, in reality, doesn’t make a huge difference to the NHL. But it would to the NHLPA and Kovalchuk because not only would he not get any front-loaded money, he would have to play 16 years to get the same money he could get in the first 11 years of the current deal.

Under the terms of the CBA, there are several provisions under which the league can reject a standard player’s contract (SPC) or offer sheet.

Under one set of circumstances, if the arbitrator sides with the league, the contract will be, “deemed null and void ab initio (i.e. the player’s free agency and contract status shall revert to the status he held prior to signing his SPC or offer sheet).”

Under another set of circumstances, if the arbitrator sides with the league, he or she, “shall reform the SPC such that if conforms to the requirements of this agreement, in a manner such that the term of the SPC shall not be modified and the aggregate compensation to be paid to the player pursuant to the SPC shall, to the extent possible, be preserved. In such event, immediately upon the issuance of the arbitrator’s decision, the SPC shall for all purposes be deemed to be amended in accordance therewith and the player shall be eligible to play. The player and the club shall be free to agree on a different conforming SPC within three days.”

Which means that if the arbitrator sides with the league and reworks Kovalchuk’s contract, the Devils and Kovalchuk could conceivably come up with another deal that satisfies the league.



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