NHL to Review Four More Players' Contracts With Salary Cap Implications

The National Hockey League said it is examining four more players’ contracts after an arbitrator voided a 17-year deal between the New Jersey Devils and Ilya Kovalchuk.

Agreements in place for Chicago Blackhawks forward Marian Hossa, Philadelphia Flyers defenseman Chris Pronger, Vancouver Canucks goaltender Roberto Luongo and Boston Bruins forward Marc Savard are under review by the league.

“While the contracts have, in fact, been registered, their structure has not escaped league notice,” arbitrator Richard Bloch said in his 20-page ruling two days ago, adding that there was “the possibility of a subsequent withdrawal of the registration.”

In the event of a contract’s withdrawal, the player and the team would need to renegotiate terms in accordance with the league’s collective bargaining agreement. For all four teams, a potential renegotiation could have salary cap consequences.

“We have been asked not to comment regarding arbitrator Bloch’s decision with respect to the Kovalchuk contract and will honor that request,” the Canucks said in a statement.

Zack Hill, a spokesman for the Flyers, said he was unaware of the pending investigation. The Blackhawks and Bruins didn’t immediately return voicemails seeking comment.

Kovalchuk Ruling

Bloch ruled on Aug. 9 that the proposed 17-year, $102 million agreement between three-time All-Star Kovalchuk and the Devils circumvented the league’s salary cap rules. The contract would have paid Kovalchuk $98.5 million over his first 11 seasons and $3.5 million over the final six.

In those 17 years, the Devils were due to pay $6 million a season toward the cap. In the event that Kovalchuk retired before the contract’s completion, the Devils would cease taking the cap hit. Kovalchuk would have been 44 in the final year of the contract.

“That is not impossible, but it is, at the least, markedly rare,” Bloch said in the ruling. “Currently, only one player in the league has played past 43 and, over the past 20 years, only six of some 3,400 players have played to 42.”

Savard, 33, will be 40 when his seven-year, $28.1 million extension expires. Pronger, 35, has a seven-year, $35 million deal and Hossa, 31, signed a 12-year contract worth $62.8 million. Hossa and Pronger will be 42 at the end of their contracts.

Luongo, 31, signed a 12-year, $64 million extension in September that will keep him under contract until age 43. Of the eight players in NHL history who have played until age 44, four were goalies.

“Each of these players will be 40 or over at the end of the contract term and each contract includes dramatic divebacks,” Bloch said in his ruling.

Salary Cap Problems

Renegotiation would put teams “in a worse situation than they were planning for,” NHL agent Jerome Buckley said.

“If those contracts need to be reworked, the cap numbers will most likely go up,” Buckley said in a phone interview. “If those cap numbers go up, the teams are going to have less cap space then they presently think they do.”

According to CapGeek.com, three of the four teams are already over the $59.4 million cap ceiling. The Blackhawks are currently $3.1 million over the limit, the most of any team in the league. The Bruins are second, with a $3.09 million overage, and the Canucks are third, at $2.66 million, according to the website. The Flyers are $877,738 under the ceiling.

“If a team is up to the cap (and has to rework a deal), they are going to have to get rid of even more money,” Buckley said. “The only way to do that is to send a player to the minors or unload them to another team in the NHL that has cap space.”

Every team in the league has until the start of the season to get below the cap. Each team has a 10 percent buffer during training camp to allow for roster changes in the weeks leading up to opening day, which is Oct. 7.

According to NHL spokesman John Dellapinna, there’s no timeline for the league’s review of the four contracts in question.

To contact the reporter on this story: Eben Novy-Williams in New York enovywilliam@bloomberg.net

Press spacebar to pause and continue. Press esc to stop.

Bloomberg reserves the right to remove comments but is under no obligation to do so, or to explain individual moderation decisions.

Please enable JavaScript to view the comments powered by Disqus.