Ilya Kovalchuk

The Contract That Changed It All

By: Joshua Imbierowicz

 One of the worst things to ever happen to professional hockey was the lockout during the

2004-2005 season. That year there was not a single National Hockey League game, basically

over a dispute between the owners, represented by the NHL, and the players, represented by the

National Hockey League Players Association, regarding a salary cap system that allotted a

minimum and maximum amount of money that teams could spend on players. The NHL wanted

this system in place in order to bring parody amongst the teams in the league as well as make

player contracts more “economically friendly.” Obviously the NHLPA did not want a salary cap

system because they felt the dollar amounts the players were making was fair to the team owners

and the league. Finally, after an entire year of no NHL hockey, an agreement was reached as the

NHLPA agreed to the salary cap system and the NHL resumed play for the 2005-2006 season.

Things went smoothly when it came to contract negotiations for the first couple years, and then

all of a sudden there was an outburst of long-term contracts. Players such as Chris Pronger,

Roberto Luongo, Marc Savard, Marian Hossa, and probably the contract that caught the most

attention, Ilya Kovalchuk. During the course of this paper we will go over who is Ilya

Kovalchuk, what led to this controversial contract, and what the consequences of this contract

were. There is no question that the contract of Ilya Kovalchuk changed the landscape of long-

term NHL contracts forever.

So who is Ilya Kovalchuk? Ilya Kovalchuk was born on April 15th, 1983 in Tver, Russia

and plays forward, left wing to be exact, in the sport of processional ice hockey. Then came the

2001 NHL Entry Draft in Sunrise Florida where the Atlanta Thrashers made Ilya the number one

overall selection. He certainly did not disappoint. During his time with Atlanta he was selected to

the NHL All-Rookie Team in 2002, NHL Second All-Star Team in 2004, won Maurice "Rocket"

Richard Trophy in 2004 (tied with Jerome Iginla and Rick Nash), and played in the NHL All-
Star Game in 2004 and 2008. He was also named the captain of the Thrashers during the 2008-

2009 season. During his career with the Thrashers Ilya totaled 529 games played, 328 goals, 287

assists, 615 points, 429 penalty minutes, and a plus/minus of -84 in the regular season. Atlanta

went to the Stanley Cup Playoffs once in the 2006-2007 season where Ilya totaled 4 games

played, 1 goal, 1 assist, 2 points, 19 penalty minutes and a plus/minus of -1. (NHL Player Profile:

Ilya Kovalchuk)

All of these accomplishments beg the question, what could have possibly happened that

would lead to Atlanta trading this perennial all-star. During the 2009-2010 season, Ilya

Kovalchuk and the Atlanta Thrashers worked toward signing a contract extension that would

keep Ilya in Atlanta. The general manager of the Thrashers, Don Waddell, publicly stated that he

made two final offers to Ilya and once they were turned down, Waddell decided to fax every

NHL team to alert them that Ilya Kovalchuk was officially available. According to reports,

Waddell offered Ilya a 12-year, $101 million deal as well as a 7-year, $70 million deal. Both of

these contracts were turned down by Ilya and his agent representative Jay Grossman, despite the

fact that one contract offered long-term security and the other would have made him the highest

paid player in the league. The decision was made by Waddell to trade Ilya during the season

rather then take the chance of losing him for nothing in the offseason as he was set to become an

Unrestricted Free Agent, meaning he would be able to sign with any team who offered him a

contract, once the season was complete. Ilya Kovalchuk was then traded on February 4, 2010, to

the New Jersey Devils, along with defenseman Anssi Salmela. In return, Atlanta received

defenseman Johnny Oduya, forward Niklas Bergfors, prospect Patrice Cormier, and a first round

pick in the 2010 NHL Entry Draft as well as exchanged second round picks in the 2010 NHL

Entry Draft.
 Now the saga makes its way to New Jersey. This was a move that was actually

questioned by many of those in the media stating that this was not typical of New Jersey Devils

general manager, Lou Lamoriello. Bobby Holik, former player of the New jersey Devils while

Lou was general manager and also a former Atlanta Thrasher where he was a teammate of Ilya

Kovalchuk stated, "I don't know if it was all Lou's doing, times (are) changing ... he may have a

little less say about what direction the organization is going," "And obviously they are trying ...

they are still in the process of going in a different direction.” (Bobby Holik: Kovalchuk Deal at

Root of Devils Disaster) So while Kovalchuk was an elite player many people felt he did not

really fit into the style of hockey that the New Jersey Devils were notorious for playing. Despite

the accusations, Ilya went on to have some solid statistics including: 27 games played, 10 goals,

17 assists, 8 penalty minutes, and a plus/minus of +9. The Devils were able to make it to the

2010 Stanley Cup Playoffs, but were eliminated by the Philadelphia Flyers in 5 games. During

that series Ilya was able to post 5 games played, 2 goals, 4 assists, 6 points, 6 penalty minutes

and a plus/minus of 0. So while these statistics show that Ilya scored on a point per game pace,

many still questioned the move as this was supposed to turn the Devils into instant Stanley Cup

contenders but were instead eliminated in the first round.

Then July 1st, 2010 rolled around and officially marked that date that Ilya Kovalchuk

became an Unrestricted Free Agent. He was considered by most to be the price of the free agent

crop for 2010 as he had the most potential to make a big impact for whatever team he elected to

join. According to reports, the Los Angeles Kings and the New Jersey Devils were the two teams

battling it out for his services. Obviously the New Jersey Devils had intentions to resign him all

along, especially after everything they gave up in order to acquire him in the first place. They did

not want to have lost the players and draft picks in the trade as well as the main piece they traded
for. The Los Angeles Kings were looking to make a big slash in order to prove to their fans they

were ready to make the next step into turning themselves into Stanley Cup contenders. After a

successful 2009-2010 campaign, ownership and management of the Kings made an assessment

of their team and felt that by adding Kovalchuk they would add the dynamic sniper to their

forwards that would fit right into their system. Ilya would visit both cities as each team “rolled

out the red carpet” so to speak in trying to lure Ilya into signing with them. There were even false

reports that contracts had been reached including a 15-year, $80 million deal with the Kings

when in fact this was not the case at all, and these twists and turns continued for nearly three

weeks. Finally on July 19th, 2010 a contract agreement had been reached. The New Jersey

Devils and Ilya Kovalchuk agreed upon a 17-year, $102 million deal that was the longest

contract in NHL history, topping the 15-year, $67.5 million deal previously signed by goaltender

Rick DiPietro of the New York Islanders. The deal broke down like this: 2010-11: $6 million,

2011-12: $6 million, 2012-13: $11.5 million, 2013-14: $11.5 million, 2014-15: $11.5 million,

2015-16: $11.5 million, 2016-17: $11.5 million, 2017-18: $10.5 million, 2018-19: $8.5 million,

2019-20: $6.5 million, 2020-21: $3.5 Million, 2021-22: $750,000, 2022-23: $550,000, 2023-24:

$550,000, 2024-25: $550,000, 2025-26: $550,000, 2026-27: $550,000. The deal represented a $6

million annual salary cap hit which was well below what many thought it would take to be able

to sign this star winger. Other terms of the deal include “a no movement clause through the

2016-17 season and a no trade clause from 2018-19 through the deal's completion. Kovalchuk

can be traded between July 1, 2017, and June 30, 2018.” (Rich Chere) The thing that was most

curious about the deal when looking at its entirety is the fact that Ilya will only be paid $550,000

from years 2022-2023 until the end of the contract in 2026-2027. That also meant that Ilya would

be 44 years old upon the completion of the contract which is well past the average retirement age
for NHL players which is “roughly 28” however most skill players play into their mid thirties

and should Ilya retire before the completion of the contract, it would come off the books for the

Devils salary cap numbers. (NHL Average Retirement Age)

All seemed well for Devil Nation. They had their prized left-winger and were already

taking pictures of Ilya to post around the stadium. Then news was delivered to the Devils front

office that they would have never expected, the NHL had rejected 17-year, $102 million deal.

The statement released by NHL Deputy Commissioner Bill Daley stated, "The contract has been

rejected by the League as a circumvention of the Collective Bargaining Agreement. Under the

CBA, the contract rejection triggers a number of possible next steps that may be elected by any

or each of the NHLPA, the Player and/or the Club. In the interim, the player is not entitled to

play under the contract, nor is he entitled to any of the rights and benefits that are provided for

thereunder. The League will have no further comment on this matter pending further

developments." (NHL Deputy Commissioner Daly Statement Regarding Kovalchuk’s Free

Agent Signing with the Devils)

Obviously the Devils were extremely upset about the decision by the NHL. Lou

Lamoriello released a statement, "We are extremely disappointed that the NHL has decided to

reject the contract of Ilya Kovalchuk. The contract complies with the terms of the Collective

Bargaining Agreement. We will have no further comment until the process outlined in the CBA

is complete." Ilya was also very disappointed as well, and he decided to take his case to the

National Hockey League Players Association. They talked things out and decided to file a

grievance against the NHL. The NHLPA stated, “The NHLPA has filed a grievance disputing the

NHL's rejection of the Standard Player Contract between the New Jersey Devils and Ilya

Kovalchuk.", “"Under the terms of the CBA, the NHLPA and Mr. Kovalchuk are entitled to an
expedited resolution of this matter. The NHLPA will have no further comment until this matter

has been resolved by an Arbitrator." (NHLPA Files grievance on Kovy Contract)

With a grievance being filed, an arbitrator was then hired as a third party to help resolve

the issue. The arbitrator chosen was Richard Bloch who has worked other cases for the NHL as

well as cases for Major League Baseball and the National Football League and he realized the

impact his decision would have. Should he rule in favor of Ilya Kovalchuk then the NHL’s

attempt to draw the line when it came to these long term contracts would fail and Ilya would be

aloud to play for the Devils under the 17-year, $102 million deal. Should he rule in favor of the

NHL then Ilya’s contract would be null and void and hence would become an Unrestricted Free

Agent and again aloud to sign with any team that offers him a contract. It also will have aloud

the NHL to set the standard on what would and would not be accepted in terms of long-term

contracts. (Report: Bloch Named Kovalchuk Arbitrator)

The same day that an arbitrator had been chosen, league took other actions as well in

regards to salary cap circumvention. According to multiple sources the NHL decided to

investigate many other long-term contracts previously negotiated such as the long-term contracts

of Philadelphia Flyer Chris Pronger and Chicago Blackhawk Marian Hossa. “Because of

growing concerns over the manner in which teams are locking up top players to front-loaded,

long-term contracts, the National Hockey League has launched an investigation into the recent

signings of Marian Hossa and Chris Pronger.” (Scott Burnside) A later report by Scott Burnside

also revealed that the contracts of Vancouver Canuck Roberto Luongo and Boston Bruin Marc

Savard. On August 18th 2010 it was finally stated by the league that they were in fact probing

these contracts. “NHL Deputy Commissioner Bill Daly confirmed Wednesday that the contracts

of Marian Hossa, Chris Pronger, Roberto Luongo and Marc Savard remain under investigation
by the League and are subject to penalties that could include de-registration if the findings

determine there was a violation of the circumvention provision written into the Collective

Bargaining Agreement.” (NHL Still Checking Other Contracts)

While the NHL continued to probe other long-term contracts, Bloch was able to reach a

decision. After listening to both sides of the case the arbitrator decided to rule in favor of the

NHL. Obviously each side had their take. Bill Daily stated, “We want to thank Arbitrator Bloch

for his prompt resolution of a complex issue," Daly said in a statement. "His ruling is consistent

with the League's view of the manner in which the Collective Bargaining Agreement should deal

with contracts that circumvent the Salary Cap." The NHLPA obviously was not as pleased,

stating, "The NHLPA is disappointed with the Arbitrator's ruling to uphold the NHL's rejection

of the contract between the New Jersey Devils and Ilya Kovalchuk," "The NHLPA is currently

reviewing the decision and will have no further comment at this time."

After the hearing the NHL and the New Jersey Devils decided they would work together

in order to come up with a solution. This was done in order for the New Jersey Devils to have a

complete understanding of what would be acceptable. The Devils then sent a revised contract to

the NHL, and it was reportedly around 15-years, $100 million. On September 4th 2010 the deal

was finally approved the Kovalchuk saga had some to an end. The new contract was as reported,

a 15-year, $100 million deal with $90 million in the first 10 years and $10 million over the last

five years and an average salary of $6.67 million toward the cap. The new deal will also end

when Kovalchuk is 42 as opposed to 44 for the previous contract. The NHL announced “We're

pleased to be able to establish bright line rules for these contracts going forward and are happy

we can turn the page on existing contracts so we're looking forward, not backward," NHL

Deputy Commissioner Bill Daly told NHL.com. "From start to finish of the process the Players'
Association was responsive, interested and shared our objective to create certainty in this area.”

Another big part of this settlement was changes to the current CBA in which the NHL and

NHLPA currently operate. The changes were put into effect as soon as the settlement was

reached up until the CBA’s expiration date of September 15th 2012. The first change stated, “1.

While players and clubs can continue to negotiate long-term contracts (five years or longer) that

include contract years in a player's 40s, for purposes of salary-cap calculation the contract will

effectively be cut off in the year of the contract in which the player turns 41.” The second change

stated, “2. In any long-term contract that averages more than $5.75 million for the three highest-

compensation seasons, the cap charge will be a minimum of $1 million for every season in which

the player is 36-39 years of age. That $1 million value will then be used to determine the salary

cap hit for the entire contract. If the contract takes the player into his 40s, the previous rule goes

into effect.” (Kovy Deal Registered as NHL, NHLPA Reach Settlement) This is exactly why the

current Kovalchuk contract was so important as not only did the league set a new precedent on

long-term contracts but even made revisions to the Collective Bargaining Agreement to put this

precedent into writing.

While the NHL and the New Jersey Devils worked together to come up with a new

contract, the NHL did not let the Devils go unpunished after having ruled they intentionally

attempted to circumvent the NHL Salary Cap included in the Collective Bargaining Agreement,

citing Article 26. On September 13th, 2010 the NHL announced “The Devils will sacrifice a first-

round draft pick in one of the next four Entry Drafts as well as their third-round draft pick in

2011. The Devils will determine in which year between 2011 and 2014 they will surrender their

first-round pick, and they are to advise the NHL the day after the Stanley Cup Final ends in that

calendar year.” “The NHL has also issued the Devils a fine of $3 million, but per the terms of the
global settlement reached between the NHL and NHLPA earlier this month the Devils will not

have to sacrifice any salary cap money.” (NHL, Devils Resolve Kovy Contract Dispute)

So after all that has gone on between the NHL, the New Jersey Devils, the NHLPA, and

Ilya Kovalchuk, how has the 2010-2011 season gone? To date the New Jersey Devils line

includes: 21 games played, 6 wins, 13 losses, 2 shootout losses for a total of 14 points which

ranks 4th out of 5 teams in their division, 14th out of 15 teams in their conference, and 29th out of

30 teams in the league. As far as Kovalchuk is concerned, his current stat line reads: 20 games

played, 4 goals, 6 assists, 10 points, 11 penalty minutes and a plus/minus rating of -9. Obviously,

this season has not gone as the Devils had planned and while it its still early, the results so far

have shown disaster.

There is no question that the contract of Ilya Kovalchuk changed the landscape of long-

term NHL contracts forever. Ilya was a talented Russian forward and after a successful career in

Atlanta saw himself land in New Jersey, which ultimately became the place where he would be a

“Devil for Life” (Kovalchuk Happy to be ‘Devil for Life’) His agent representative Jay

Grossman and Devils General Manager Lou Lamoriello changed forever how teams would be

able to negotiate long-term NHL player contracts with their attempt to get Kovalchuk the money

he wanted on terms that were salary cap friendly to the Devils. While the league did investigate

other deals with no penalties given, they essentially put their foot down when this contract

attempted to “cross the line.”

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