Kovalchuk Decision Tommorow

All those waiting anxiously for word on whether Kovalchuk’s new deal with Devils will be accepted by the NHL should only have to wait one day longer.

On Friday, NHL deputy commissioner Bill Daly confirmed that the Devils submitted a new deal to the NHL for approval. Article 11.5(d) of the NHL CBA states the League has five days to either approve and register the deal, or to reject it.

A quick count on the calendar shows that the five days will be up tomorrow. So hopefully we should know soon whether Kovalchuk will be donning a Devils uniform next season.

Los Angeles Dodgers and the McCourt Divorce

Right now the Los Angeles Dodgers are the children caught in the middle of a very nasty divorce between owners Frank and Jamie McCourt. Both parents want sole custody of the Dodgers, but an agreement signed in 2004, shortly after the McCourts bought the Dodgers, could result in Frank being awarded the team.

This agreement, which split up the couple’s jointly owned property to attempt to protect it from foreclosure by business lenders, specified that all the assets of the Dodgers belonged to Frank separately. Frank, and his lawyers, argue that this is all that is needed to prove that the Dodgers are his.

The problem, according to Jamie, is that she was surprised to learn that she had given away her right to the Dodgers. She swore in an affidavit that “I was never told that by signing the [agreement], I was giving away the Dodgers.” She claims she was misled and trusted Frank to not take advantage of her.

Jamie’s legal team is up against serious odds. It would be hard for a housewife to successfully argue that she didn’t know what she was signing when she signed a contract with her husband. It will be almost impossible for Jamie McCourt to make this argument successfully because she is a lawyer who has handled complicated litigation for the couple’s real estate business. The suggestion that she was misled and did not know what she was signing will be hard for the court to accept.

This divorce has gotten nasty and you can be sure that both sides are racking up significant billable hours by some premier American lawyers. Jamie is even arguing that the document was fraudulently altered, a claim that Frank is denying and plans on calling forensic experts to refute it.

As is often the case, the best option may be for the parents to settle for the sake of the children: both the McCourt’s four sons, and the Dodgers. During this dispute, the Dodgers have been hamstrung in their ability to spend money on player moves. They were largely silent during the offseason and at the trade deadline and have just given away Manny Ramirez on waivers. They have been very average in a winnable division. Hopefully the McCourts can put this mess behind them and the Dodgers can return to their proud tradition of championship baseball.

For more analysis take a look at, Divorce-court drama and the Dodgers, by Lester Munson of ESPN.

Great Sports Books (Part 2 of 3)

This is the second entry in a three part series recommending great sports books. These reviews are authored by Ken Bungay, a lawyer who lives in Whitby, Ontario. He is also a big sports fan, knows everything about junior hockey, and loves reading sports books. So there was no person better to ask to write these entries than Ken. In all, Ken will recommend 6 sports books. He's already recommended 2 books and here are his next 2:

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I am a regular follower of the Team 1200 on the Internet and a friend of the Team 1200's resident sports law contributor Eric Macramalla. (Yes, I know Eric is a lawyer, but I try not to hold that against him. Plus he knows a ton of stuff about sports and the law.) So when Eric asked if I would contribute a Guest Blog on the topic of favourite sports books, I was happy to oblige.

1. Slugging it Out in Japan - 1992, Warren Cromartie, with Robert Whiting.

It's about ex-Expo Warren Cromartie's days in Japan and I'm still on an Expos' high just days after his Montreal team-mate Andre Dawson was inducted into the Baseball Hall of Fame. Cromartie, Dawson and Tim Raines were the "I-95" club from south Florida who were Expos together. This book will really appeal to Expo fans. I liked it because of the story of Cro trying to fit into Japanese baseball culture and society. When he landed in Tokyo in 1984, having signed a contract to play for the Tokyo Giants, he must have felt like he was on another planet. This was years before Ichiro Suzuki. Cromartie played for the Giants for 7 seasons, and it doesn't appear he ever got used to the Giants' training regime. Let's put it this way, Guy "Anyone Got a Light" Lafleur would never have survived Tokyo Giants' workouts.

2. A False Spring - 1973, Pat Jordan.

A great read. Jordan is now a recognized sports writer, but in 1959 he was a Connecticut high-school pitching phenom who was a bonus baby - signing a contract with the Milwaukee Braves. Three years later he quit - his fastball and pitching skills long gone. Not so much a book on baseball as a book on life, as Jordan documents his depression and downward spiral in the minor leagues. Jordan: "Professional baseball clubs, unlike most employers, believed that young prospects should be started at the top of their profession each spring and be allowed to sink to the true level of their ability."

Ken

NHL Contract Landscape: Analysing 58 Long Term NHL Player Contracts

We have conducted an in-depth review of the terms of all NHL player contracts that are 6 years or longer in length. That’s 58 contracts in all.

We looked at the age of the player at the start of the contract, the total dollar value of the contract, the duration of the contract, the yearly cap hit, the player’s age at the end of the contract and the number of throwaway years.

Why you ask?

The goal was to better understand the NHL contract landscape and just how many contracts are bad contracts. By bad contracts, we mean contracts that are designed to artificially push down the yearly cap hit (thereby constituting a circumvention of the CBA).

Reviewing these 58 contracts helped us better understand how common it is for contracts to cross the line, whether good contracts are in fact the norm and whether bad contracts are unique enough that they put other teams at a competitive disadvantage.

Our findings, to say the least, we’re pretty interesting.

Table Summary of 58 Contracts

Here’s a table summary of the results of our investigation:

Review of NHL Contracts Lasting 6 Years or More
Name	Age at Start of Contract	Contract Amt	Years	Cap Hit	Throwaway Yrs	Age at end of Ct
Marian Hossa	30	$62.5 million	12	$5 million	4	42
Marc Savard	33	$28.5 million	7	$4.007 million	3	40
Johan Franzen	29	$43.5 million	11	$3.955 million	3	40
Roberto Luongo	31	$64 million	12	$5.333 million	3	43
Henrik Zetterberg	28	$73 million	12	$6.083 million	3	40
Daniel Briere	29	$52 million	8	$6.5 million	2	37
Chris Pronger	35	$34.45 million	7	$4.921 million	2	42
Vincent Lecavalier	29	$85 million	11	$7.727 million	2	40
Mattias Ohlund	32	$25.25 million	7	$3.607 million	2	39
Duncan Keith	26	$70.51 million	12	$5.551 million	0	38
Thomas Vanek	23	$50 million	7	$7.143 million	0	30
Derek Roy	24	$24 million	6	$4 million	0	30
Eric Staal	24	$57.75 million	7	$8.25 million	0	31
Cam Ward	26	$37.8 million	6	$6.3 million	0	32
Rene Bourque	28	$20 million	6	$3.333 million	0	34
Brian Campbell	28	$57.12 million	8	$7.14 million	0	36
Rick Nash	26	$62.4 million	8	$7.8 million	0	34
Loui Eriksson	24	$25.6 million	6	$4.267 million	0	30
Pavel Datsyuk	28	$46.9 million	7	$6.7 million	0	35
Shawn Horcoff	30	$33 million	6	$5.5 million	0	36
Ales Hemsky	22	$24.6 million	6	$4.1 million	0	28
Tom Gilbert	25	$24 million	6	$4 million	0	31
Ryan Whitney	24	$24 million	6	$4 million	0	30
David Booth	24	$25.5 million	6	$4.25 million	0	30
Rostislav Olesz	22	$18.75 million	6	$3.125 million	0	28
Stephen Weiss	24	$18.6 million	6	$3.1 million	0	30
Anze Kopitar	21	$47.6 million	7	$6.8 million	0	28
Dustin Brown	23	$19.05 million	6	$3.175 million	0	29
Martin Havlat	28	$30 million	6	$5 million	0	34
Mikko Koivu (extension starting 2011)	28	$47.25 million	7	$6.75 million	0	35
Nick Schultz	25	$21 million	6	$3.5 million	0	31
Scott Gomez	27	$51.5 million	7	$7.357 million	0	34
Tomas Plekanec	27	$30 million	6	$5 million	0	33
Martin Erat	26	$31.5 million	7	$4.5 million	0	33
David Legwand	27	$27 million	6	$4.5 million	0	33
Patrik Elias	30	$42 million	7	$6 million	0	37
Danius Zubrus	29	$20.4 million	6	$3.4 million	0	35
Anton Volchenkov	28	$25.5 million	6	$4.25 million	0	34
Colin White	28	$18 million	6	$3 million	0	34
Martin Brodeur	34	$31.2 million	6	$5.2 million	0	40
Rick Dipietro	24	$67.5 million	15	$4.5 million	0	39
Wade Redden	31	$39 million	6	$6.5 million	0	37
Henrik Lundqvist	26	$41.25 million	6	$6.875 million	0	32
Jason Spezza	25	$49 million	7	$7 million	0	32
Mike Richards	23	$69 million	12	$5.75 million	0	35
Scott Hartnell	25	$25.2 million	6	$4.2 million	0	31
Kimmo Timonen	32	$38 million	6	$6.333 million	0	38
Brooks Orpik	27	$22.5 million	6	$3.75 million	0	33
Marc-Andre Fleury	23	$35 million	7	$5 million	0	30
Dany Heatley	27	$45 million	6	$7.5 million	0	33
Dan Boyle	31	$40 million	6	$6.667 million	0	37
Ryan Malone	28	$31.5 million	7	$4.5 million	0	35
Dion Phaneuf	23	$39 million	6	$6.5 million	0	29
Ryan Kesler	25	$30 million	6	$5 million	0	31
Dan Hamhuis	27	$27 million	6	$4.5 million	0	33
Keith Ballard	26	$25.2 million	6	$4.2 million	0	32
Alexander Ovechkin	22	$124 million	13	$9.538 million	0	35
Nicklas Backstrom	22	$67 million	10	$6.7 million	0	32

Standard of Review

When assessing contracts, we focused Richard Bloch's Kovalchuk decision, which in my view, clearly sets out the standard for an NHL contract.

Specifically, as per Bloch's landmark decision, the NHL will look at each contract individually and analyse their different components to asses whether the aggregate effect of these various factors equals a circumvention. No single factor will be determinative of a circumvention; rather it is the combined effect of the various factors in a contract that must be considered as a whole to determine whether a contract is a good one.

As I previously reported on this blog, in the case of Kovalchuk, the arbitrator found that his age at the end of the contract (44) together with the dramatic diveback after 11 years, the significant frontloading of the contract, the relatively minimal payout in the last 6 years and the transition from a "No Move" to a "No Trade" had the combined effect of supporting a finding of circumvention.

Since we can’t review the 58 contracts, we don’t know whether the contracts have material transitions from a No Move to a No Trade. However, as per Bloch's decision, this was only one factor supporting a finding circumvention. Bloch would have made the same finding even if the Kovlachuk contract didn’t have this transition clause.

Findings

Of the 58 contracts that were signed for 6 plus years, only 9 included throwaway years - or about 15%. It is no wonder that both leafs GM Brian Burke and Caps owner Ted Leonis complained that the Kovalchuk contract upset the competitive balance and didn’t create an even playing field (please see Burke, Leonsis Not Fans of Kovalchuk Contract).

In keeping with our standard of review, the following contracts are potentially problematic as they have throwaway years: Marian Hossa, Chris Pronger, Marc Savard, Henrik Zetterberg, Daniel Briere, Vincent Lecavalier, Roberto Luongo, Mattias Ohlund and Johan Franzen.

Of course, the Savard and Luongo contracts are under investigation.

The contract of Duncan Keith was close, but just fell short of being problematic. Close though. In the case of Ohlund, it was also a close call. The tipping point was the drop from $5 million to $2 million in just two years, which was too significant to ignore.

Some of the divebacks are quite dramatic, particularly in the cases of Hossa, Pronger and Savard. The yearly breakdown of these 10 contracts is as follows:

(a) Marian Hossa: $7.9, 7.9, 7.9, 7.9, 7.9, 7.9, 7.9, 4.0, 1.0, 1.0, 0.75, 0.75

(b) Chris Pronger: $7.6, 7.6, 7.2, 7.0, 4.0, 0.525, 0.525

(c) Marc Savard: $7.0, 7.0, 6.5, 5, 1.5, 0.525, 0.525

(d) Henrik Zetterberg: $7.4, 7.75, 7.75, 7.75, 7.5, 7.5, 7.5, 7.5, 7.0, 3.35, 1.0, 1.0

(e) Daniel Briere: $10.0, 8.0, 8.0, 7.0, 7.0, 7.0, 3.0, 2.0

(f) Vincent Lecavalier: $10.0, 10.0, 10.0, 10.0, 10.0, 10.0, 10.0, 8.5, 4.0, 1.5, 1.0

(g) Roberto Luongo:$10.0, 6.716, 6.714, 6.714, 6.714, 6.714, 6.714, 6.714, 3.382, 1.618, 1.0, 1.0

(h) Johan Franzen: $5.5, 5.0, 5.25, 5.25, 5.0, 5.0, 5.0, 3.5, 2.0, 1.0, 1.0

(i) Mattias Ohlund: $4.0, 4.0, 5.5, 5.0, 3.75, 2.0, 1.0

(j) Duncan Keith: $8.0, 8.0, 8.0, 7.66, 7.6, 7.5, 6.0, 5.0, 4.5, 3.5, 2.65, 2.1

Also interesting is that teams havelooked to reduce the cap hit by giving non-star players longer term deals. Tom Gilbert got a 6 year/$24 million deal, while Nick Schultz got 6 years at $21 million. The list goes on: Scott Hartnell, Brooks Orpik, Keith Ballard, Ryan Malone, Rene Bourque Danius Zubrus. Before the cap was in place, long term deals for these types of players was not only unusual but non-existent.

Given the length of these contracts, many teams will come to regret the signings. Expect the contractual landscape to change over the next 10 years as teams make adjustments. Which brings me to Rick Dipietro.

Dipietro Contract

The Rick Dipietro deal has not been included as a bad contract. It’s a 15 year deal that pays the Isles goalie $4.5 million every year of the deal. It has no dramatic diveback and was signed when Dipietro was 24 years old. While it’s a long deal, and a bad one at that, it wasn’t a case of circumvention since it didn’t look to artificially push the cap hit down.

Ovechkin & Competitive Balance

There are of course good deals. One is the 13 year/$124 million deal signed by Alex Ovechkin. The cap hit on the deal is $9.5 million, and the winger makes more in the last 7 years of the contract ($10.5 million/year) than in the first 6 ($9 million/year). Getting back to competitive balance, ask yourself this - is it fair that the Capitals have a yearly cap hit of $9.5 million over the 13 years of the Overchkin contract, while the Devils’ cap hit is just $6 million? Of course not.

If you have any comments or questions, use the Comments Section. We would love to hear from you.