Thursday, July 29, 2010

A Couple of Misunderstandings on Kovalchuk Case

On the Kovalchuk case, I've been seeing two points being raised a lot that need to be clarified:

1) Not 48 Hours: The arbitrator won't have 48 hours to decide the case. As per Section 26.13 of the CBA, the arbitration hearing will last up to 7 days, and thereafter, the arbitrator will have 3 days to issue the decision. These deadlines can be extended. The decision can also be rendered in less time.

2) No Need for Smoking Gun: The NHL doesn't need a smoking gun to successfully establish that the Devils/Kovalchuk circumvented the cap. By smoking gun, I mean direct evidence (such as emails and faxes) that on its face directly demonstrates that the parties intended to artificially push down the yearly salary cap hit.

As per Paragraph 26.3 of the CBA, in order to succeed, the NHL must show that the Devils/Kovalchuk intended to circumvent the cap OR that the effect of the contract is to circumvent the cap.

Intention can be tough to show. However, the arbitrator is permitted to consider "circumstantial evidence" (or indirect evidence) in making its decision - Section 48.5(d). The NHL could argue that the surrounding circumstances (long contract, throwaway years, age of Kovalchuk at end of contract) are such that the arbitrator can infer that the parties intended to circumvent the cap.

The NHL could also argue that the effect of the contract, intention aside, is to circumvent the cap. This is the stronger of the 2 arguments (i.e., intention vs. net effect).

If you want a fuller discussion of the process and substance of these proceedings, please scroll down.

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