Thursday, September 2, 2010

Kovy and the Habs

So, little Gary Bettman shook his big...executive Donald Fehr and expected the ex-baseball union man to quake in his boots? It'll be interesting to see what happens with the revamped Ilya Kovalchuk deal, now that the NHL has apparently thrown an ultimatum at the players' association. Bettman wants the players to tweak the CBA to close the front-loaded contract "oversight," in exchange for the NHL's approval of the Kovy contract. The NHL is looking for cap hits on multi-year deals that end when a player is 40, so the hit would be an average of the years up until that age. The league also wants a cap-calculation formula that places a greater cap hit on the years with higher salary. Punishment for the players refusing to re-open the CBA early will be swift and deadly. Not only will Bettman and Co. reject the Kovalchuk deal, they'll also cancel Roberto Luongo's contract and start investigating Marian Hossa's as possible cases of cap circumvention. The deadline for a decision remains 5:00 tomorrow afternoon.

The latest monkey wrench thrown into the gears, though, is the players' association decision to delay confirming Fehr as executive director until the 30 team reps review his conditions of employment. The conditions include a $3-million a year salary, a legal consulting job for Fehr's lawyer brother and absolute autonomy to make personnel decisions within the union. The rumour is that some guys, like Calgary's Robin Regehr, may have cold feet about Fehr and/or his conditions. The upshot of that is the players approach the Friday deadline on the Kovalchuk deal with no leadership. The deadline could conceivably be extended, if there's progress in the discussion (to be read as: if the players show signs of bending to Bettman's desire.) A delay could give the players enough time to get Fehr installed and take a position on the issue. Then again, if I were Fehr, I'd have to ask whether I really want to join a group that's leaking my employment demands to Larry Brooks at the New York Post. In addition, on the timeline of the hockey season, this is all dragging on a little too close to the start of camp.

So, here we are with little Gary flexing his muscle and testing the currently-leaderless NHLPA's resistance. This will go one of two ways. It will either mean the players association caves in order to keep Bettman from nixing some of its highest-profile contracts, and agrees to changes in the CBA to prevent those types of contracts from happening in the future. Or, the players, without a leader, will refuse to grant CBA concessions and open a huge can of worms, contractually speaking.

If the players agree to the concessions in exchange for approval of the Kovalchuk deal, I'd hope they also argue to include a change or two of their own. Maybe, for example, that a player can request a renegotiation of his deal if he so chooses. I'm sure some guys, like perhaps, Cristobal Huet, would be inclined to take a pay cut in order to remain in the NHL or stay with a cap-strapped team, if they were allowed to make changes in their contracts. I don't expect the players to have their own concerns heard here, though. Again, it goes back to having no leadership, which is why Bettman is pursuing this right now.

So, assuming the players cave and agree to Bettman's demands, there are a few possible effects on the Habs. First, Kovalchuk will be allowed to play with the Devils for the foreseeable future, even though the NHL has admitted the Devils tried to circumvent the cap. The Canadiens could do without a superstar scoring forward in Jersey.

Second, the Canadiens won't get to do the same thing for Markov. I don't know if Gauthier had it in mind to try a front-loaded deal, but it would have made sense for the Habs to get their best defenceman to finish his career in Montreal with an attractive cap hit. That possibility, and the chance of doing it for future players like Cammalleri, Price or Subban will be gone. In the meantime, teams like Philly, Chicago, Vancouver, Jersey and Detroit that have already taken advantage of the loophole to stack their teams will be allowed to continue to do so. That creates an unfair competitive environment.

Third, there's no mention anywhere about grandfathering in existing contracts when it comes to applying the new cap-hit math. If that were to apply to all contracts, the Gomez deal would hurt the Habs more than it does already because he still has two years of making a higher salary than his cap hit, which is one of the things Bettman's proposed new formula would address. In the new formula, the annual cap hit would actually be closer to the real value of the salary in the player's highest-paid years, which could boost Gomez' cap hit for two years. On the other hand, his hit would be lower for the years following, when he's got a lower actual dollar value versus cap hit...but then he'd be harder to trade to a cap-floor team that wants to pay less money in exchange for a higher hit.

Worst of all, if Bettman is allowed to run roughshod over the players' association now, it doesn't look good for a peaceful CBA negotiation in two years. If the players confirm Fehr as executive director, he'll want to save face next time the association is up against Bettman. It won't be pleasant or easy, and could possibly mean another lockout or a players' strike. That's not good for any team or for hockey fans.

On the other hand, the average-joe NHLer, some of whom might be player reps for their teams and have voting power in this issue, might be glad to see the end of the big, front-loaded deal. They know only the elite players get rewarded with those. In the meantime, because the cap averages don't match up with actual money paid out by the teams...on which the players' percentage of league revenue is based...that means there's less actual money for the middle-of-the-road player. If, for example, a team makes a million bucks and the players' share is 540-thousand of that, if a team has to pay one guy 100-thousand, there's a limited amount the rest of the team can share. Even if the guy's cap hit says he's only counting for 60-thousand of that million, he's still taking more actual money out of the players' percentage. This aspect of things wouldn't affect the Habs too much, because most of the Canadiens' big contracts, with the exception of Gomez, are evenly balanced between cap hit and actual salary. League-wide, though, every player is affected when a few players get an abnormally large share of total player revenue.

If the players decide they can't or don't want to open the CBA without a leader to negotiate for them, they may have no choice but to go ahead and refuse Bettman. Consequences in the form of terminated contracts and penalties against the teams convicted in the league's court of justice will follow. If the Devils and the other teams accused of contract violations lose the players as well as draft picks or cap space, it would, of course, be good for the Canadiens competitively. It's never a bad thing for your opponent to take a hit. Then again, that will mean players like Kovalchuk, Luongo and possibly Hossa will suddenly be free agents who either renegotiate for a lot less actual money with their current teams or find new teams. It's too late for most teams to get in on that kind of UFA bounty, so only a few GMs with lots of cap space could afford them. The Canadiens really don't need to see the Isles, Thrashers, Lightning or Panthers add one of those guys.

It'll be very interesting to see what becomes of this because it will, in one way or another, affect the Canadiens. This is a show of power for Bettman. He's pushing now to see what happens, and if the players decide to push back, I don't see this ending well for hockey.

1 comment:

DB said...

Did the NHL offer the NHLPA an ultimatum or a carrot to clarify the rules surrounding front-loaded contracts? I have no idea and I'm not sure that Larry Brooks does either.

He has been guilty of sloppy reporting in the past (When the Rangers signed Ryan McDonough, Brooks reported that McDonough was the 7th overall pick in 2007 - he was 12th - and played on the US junior gold medal team - he didn't) so I wouldn't be surprised if he got things wrong this time.

I'm encouraged that the NHL and players are talking about this issue now rather than let it fester for any longer. Having specific rules makes a lot of sense as does grandfathering existing contracts and the cap rules surrounding them (There is no way only a few contracts would be grandfathered).

I guess we'll find out later today if this issue is resolved or if it will drag on with the resulting endless rumours.