Devils Get Whacked For Kovy Contract

While the headlines across read that the Ilya Kovalchuk situation is “RESOLVED,” it doesn’t seem to be the end of the Kovalchuk saga…yet.

For circumventing the Collective Bargaining Agreement (the “CBA”), the Devils were fined $3 million.  They will also have to sacrifice a third-round pick in the 2011 draft, and a first-round draft pick in one of the next four Entry Drafts (between 2011 and 2014).  They must advise the NHL the day after the Stanley Cup Final ends in that calendar year.

While Richard Bloch’s ruling said that the Devils acted in good faith, these fines do not make sense or uphold what Bloch issued in his ruling.

“We were today advised of the ruling by the Commissioner with respect to the Kovalchuk matter,” Lou Lamoriello said in a statement.  “We disagree with the decision.  We acted in good faith and did nothing wrong.  We will have no further comment.”

The Bloch ruling was confusing.  In his ruling, he says: “Nothing in this Opinion should be read as suggesting that either the Club or Mr. Kovalchuk operated in bad faith or on the basis of any assumption other than that the [standard player's contract ("SPC")] was fully compliant with the CBA. While intent is specifically listed as a potentially relevant factor in a proceeding such as this, the System Arbitrator here concludes the SPC terms themselves demonstrate this agreement “has the effect of defeating” the provisions of the CBA, with particular reference to the Team Payroll Range language.”

Here, Bloch made sure to note that the Devils and Kovalchuk did not act in bad faith.  This language looked deliberate, as if it was meant to save the Club and Kovalchuk from being fined.

But according to various sources, the amendment to the CBA which allowed Kovalchuk’s contract as well as grandfathered in Roberto Luongo, Marc Savard, Marian Hossa and Chris Pronger’s contracts, allowed the NHL to retain their rights to punish the Devils for circumventing the CBA. The amendment also did away with the rule stating that the $3 million fine would count against the salary cap.

But the saga of Kovalchuk may not be done after these fines.

Section 26.8(c) of the CBA says “In order to retain his status as a General Manager or CFO or Club President, each General Manager or CFO or Club President shall annually certify to the NHL that during the prior year he has not violated this Article 26…”

Since the NHL has vehemently ruled that the first Kovalchuk contract was a circumvention of the CBA, and the Club has been punished for said circumvention, when Lou Lamoriello submits Exhibit 32 by July 10, 2011, he will have to say that he circumvented the CBA (based on the NHL’s findings).  Ergo, Lamoriello will not be able to retain his status as GM and Club President.

Granted, Lamoriello has a better chance of taking this situation to Court and making the NHL prove that he did in fact circumvent the CBA.  Based on what Bloch said in his ruling, there is reasonable doubt.  There was no intent to circumvent.  They acted in good faith.  Bloch is on record saying as much, but therein lies the confusion.

This isn’t a matter for the NHL to decide whether Lamoriello circumvented the CBA.  He’ll need to have an unbiased judge with no affiliation to the NHL rule that he did not, in fact, circumvent the CBA.

Devils Charity Golf Tournament

The Devils, Coaches and Alumni are hitting up the golf course at the Upper Montclair County Club in Clifton, NJ for their annual Charity Golf Classic on Wednesday, September 15th.  Proceeds from the fundraiser go to benefit various charitable endeavors by the Devils alumni association.


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