Tom Gulitti operates the Devils blog, Fire And Ice located at http://blogs.northjersey.com/blogs/fireice/. This is the top Devils blog and includes a great deal of original content and insight. He was kind enough to let me know that the NHLPA and NHL have agreed to certain guidelines for deciding the possible penalties for the Devils on the first Kovalchuk contract. This agreement replaces the stiffer penalties that can be imposed as per Article 26.13 of the CBA.
According to Tom, the new guidelines are as follows:
1. A deadline of 5 p.m. on Sept. 17 for the league to make a decision
So we should know by Friday and put this behind us.
2. No loss of salary space
The CBA provides for a loss of cap space equal to the fine. This is no longer the case. This is very big.
3. Maximum fine of $3 million
The CBA provides for a max fine of $5 million so this has been reduced. Again, however, the key is that the fine won't count against the cap.
4. Kovalchuk cannot be penalized
The CBA provides for penalties against a player if they are found to have circumvented the cap, and these sanctions are imposed by the arbitrator and not Bettman.
5. League has unilateral power to penalize the Devils and the NHLPA cannot appeal
The CBA's appeal clause is a privative clause which means that it allows a party to appeal but unless the decision is really off the wall, a judge won't interfere. In this case, whatever the sanction imposed, it's likely that a judge wouldn't interfere as I can't see the NHL going nuts. They've been steady throughout. This negotiated term is likely in place to ensure that after the NHL rules, the matter will be disposed of permanently with no hope of further distraction.
6. The NHL can still require the Devils to forfeit draft picks
The CBA provides for forfeiture of draft picks. This is a big penalty given the importance of draft picks in a salary cap world.
As noted in my previous blog entry, the arbitrator Bloch went out of his way in his decision to find that the Devils did not intend to circumvent the cap, and rather made his finding of circumvention based on the net effect of the contract (intention aside). At law, if a finding of intention was made it would have suggested that the Devils operated in bad faith - which is pretty serious. That didn't happen.
So that should reduce any possible sanctions. However, given that a fine won't count against the cap, it would not be a surprise to see the NHL impose a monetary fine - but stop at that (no forfeiture of draft picks). The fine would be nothing more than window dressing, and while not welcomed by the Devils, it wouldn't be a cap game changer. Again, no finding of bad faith may well temper any possible sanctions.
Once again thanks to Tom of Fire and Ice for the heads up.