• Kovalchuk Not Signed

    by Tyler Dellow • August 10, 2010 • Uncategorized • 62 Comments

    Bruce Arthur came up with a pretty good question tonight: why isn’t the CBA just one paragraph that reads, “Whatever Gary says”? I’m not sure that it’s quite that bad but reading Richard Bloch’s decision in the Kovalchuk arbitration, it does seem that Bloch has decided that the NHL has an awful lot of leeway. I’ll write some more about it later this week but I’m at least wavering in my conclusion that this type of deal is permissible. I have trouble with some of Bloch’s reasoning; specifically, his conclusion that this kind of deal defeats the intent of the Team Payroll System when it’s permissible according to that but it’s a pretty compelling argument taken as a whole, I think.

    What does that mean? Well, if Bloch is right, it means that the NHLPA and the NHL have an agreement that permits the NHL to make decisions according to some vague, unspecified criteria. It also means that other contracts, like those signed by Luongo and Hossa, are open to league review and challenge. Heck, the CBA contains a provision that permits the NHL to order that games won by a team circumventing the CBA be forfeited; maybe Chicago didn’t win the Stanley Cup. Of course, Bloch names Pronger’s deal as suspect as well. So it couldn’t be Philadelphia. San Jose or Montreal might be your 2009-10 Stanley Cup Champions. I’m sure we’ll find out eventually.

    About Tyler Dellow

    62 Responses to Kovalchuk Not Signed

    1. sv
      August 10, 2010 at

      I’m sure the NHLPA is rethinking the choice of arbitrator now.

    2. dawgbone
      August 10, 2010 at

      I still don’t get why the Pronger deal is an issue. Is it not classified as a 35+ contract? If so, there are no cherry years added on to the end that can be skipped on to reduce the cap hit.

      If Pronger doesn’t play his last year, the Flyers still have the full cap hit.

    3. Triumph
      August 10, 2010 at

      dawgbone:

      assuming this loophole is not closed in the next CBA, pronger will retire as an atlanta thrasher or florida panther, and those teams will be happy to have pronger’s cap hit while he’s not playing for them.

      re: kovalchuk -

      yeah, bloch basically grants himself tons of power in his decision. he’s got one clause that allows him to interpret the intent of stuff, so he just goes nuts with it. it’s a rather dangerous ruling, and the NHLPA got absolutely smoked. i have no idea how they could’ve argued so poorly or let this guy be the arbitrator.

    4. Schitzo
      August 10, 2010 at

      Are we sure the NHLPA wanted to win? It’s been brought up before by Tyler and others that every time a superstar signs one of these deals, money comes out of the hands of the grunts making league minimum.

    5. Triumph
      August 10, 2010 at

      the NHLPA has never cared about the grunts making league minimum. that said, while it’s not impossible they took a dive, it’s unlikely. plus, with bloch’s decision, it would be like taking a dive in boxing and sustaining a life-threatening concussion when you hit the mat.

    6. roddie
      August 10, 2010 at

      Triumph–

      It appears that the NHLPA opened the door for Bloch to comment on the other deals by bringing up the fact that the NHL didn’t challenge them. Oops.

      Tyler–

      It would be fun to have a “redo” of the Finals and have San Jose play Montreal. Of course this would involve bringing Nabokov back from Russia, and Halak from St. Louis. Choke v. Choke.

    7. August 10, 2010 at

      It appears that the NHLPA opened the door for Bloch to comment on the other deals by bringing up the fact that the NHL didn’t challenge them. Oops.

      This was exactly my reaction. “Why is he going off on those contracts in a footnote? Oh…the PA put them in evidence.”

    8. dawgbone
      August 10, 2010 at

      Triumph, I’m fine with that. I have no issues with a team trading cap hit for actual $$ savings (or vice versa). At least a deal has to be made and Philly may have to pay a price to make it happen.

      With these other contracts though, there’s nothing to hurt these teams or force them to make a deal like trading said player to a team who needs to make the floor.

    9. August 10, 2010 at

      My biggest issue with Bloch’s decision is that it effectively gives the NHL via arbitration – against a severely weakened and in disarray union – what it specifically tried to and could not achieve in the CBA negotiation process itself.

      (1) The NHL tried to negotiate a limit to contract length. It could not. I think this may have been in part because the NHLPA turncoats (Linden, Saskin, Shanahan, Pronger, Iginla et al) already agreed to link salaries to revenues, which was the crux of the entire freakin’ lockout.

      (2) The NHL tried to and did negotiate a provision in which 35+ year old SPC’s would retain their cap hit beyond the point at which the player actually plays for the team, a provision specifically intended to deal with this exact phenomenon. This provision is exactly the mechanism that the NHL and Bloch have identified; by the terms of the CBA, it applies to the Teemu Selanne’s and not the Ilya Kovalchuk’s of the league, however. This was not a loophole that no one ever foresaw. If you read the CBA back in ’06, or whenever they got around to publishing it, the prospect of excessively long contracts with little tails on them was a pretty obvious consequence. The NHL had enough bargaining leverage to close this loophole with respect to old players; they were not able to do so with respect to others. That fact has to have meaning.

      (3) There already exists an extensive CBA provision on how a multi-year SPC can vary in salary value from year to year. There are numerous illustrations of how this provision it to be applied. This provision was, almost certainly, heavily negotiated. An arbitrator is now creating an addendum to this provision, in complete disregard to the CBA itself and the bargaining process that produced the document. Whether or not this provision should or should not be what it says is a completely different point than that it is, for better or worse, what the parties agreed to.

      Bloch dealt with point (1) briefly in a footnote, at least. That he didn’t address points (2) and (3) would very much concern me if I was an agent or a player.

      All that said, I think Bloch’s decision is at least defensible.

    10. August 10, 2010 at

      Well. For once, I disagree pretty completely with you. While I am 100% for all forms of Bettman-bashing, this just seems off the mark. The NHL is not getting a term limit on contracts out of this decision. In fact, if Dean Lombardi and the Kings were so inclined, I have no doubt that a 20 year contract could be given to Drew Doughty – as long as it were constructed such that it awarded realistic salaries for each of those years.

      The issue here with Kovalchuk’s contract was the tail, not so much the term itself. Long deals are still acceptable, but they can’t have the tail, which has the undeniable effect of circumventing the cap. Kovalchuk’s contract would’ve been fine if the 17 years were all at the same pay, or some other setup that did not involve that tail specifically tucked at the end. This decision does not create a term limit. This decision does not say that you can’t sign players to age 44 or later. This decision simply says that you cannot keep tagging big long tails onto contracts to lower the cap hit. Nothing else.

      Teams can hand out Ovechkin/DiPietro type contracts if they want, long on term and big on cash, without the tail, but they cannot continue to sign contracts with tails. That’s all that happened here.

    11. August 10, 2010 at

      The issue here with Kovalchuk’s contract was the tail, not so much the term itself.

      Yea, I don’t disagree with anything you’ve said, which is why I stated that the decision was defensible. I just think there are some arguably compelling arguments against circumvention that the NHLPA didn’t raise, or that Bloch didn’t address. We don’t know exactly how the CBA negotiations proceeded (presumably Batterman and McCambridge do), but it seems to me that a rule proscribing these deals could have been easily negotiated for and inserted by the league. It wasn’t. That should be at least somewhat persuasive as to what the CBA was intended to prevent or not.

      The most ironic part about the whole thing is that such a rule (a rule that formalizes whatever the Bloch opinion is supposed to stand for – that he creates no bright line standard is another huge problem) would be extremely harmful to the majority of the players, and extremely beneficial to the league as a whole (a league primarily concerned with maximizing revenues would want good teams in places like NY, CHI, TOR, and BOS, and not NSH and PHO).

      As much as I would miss watching Kovalchuk play, I think my ideal outcome would be for Kovalchuk to sign with SKA St. Petersburg now as a big middle finger to the league. As it is, SKA is probably better than a third of NHL teams now anyway.

    12. George B
      August 10, 2010 at

      Also the fact that the NMC was changed to NTC late in the deal wasn’t lost on Bloch which means the cap hit could be eliminated by stuffing him in the minors for the final 6 years.

    13. The Other John
      August 10, 2010 at

      Not quite sure why why the uproar.

      The contract in question was ridiculous. What may be hilarious is if there is some appeal or judicial review process contemplated by the NHLPA. In response to such an application, the NHL may want to seek limited document discovery (emails, faxes, etc between the parties) because I suspect that NJD, Kovalchuk ‘s agent and the NHLPA will have a paper trail that put serious question to the assertion that the tail of this contract was anything other an attempt to circumvent the CBA.Their defense to such production would be what????litigation privilege: our emails should not be produced because we fully anticipated we would be involved in litigation over this 17 year contract. Hilarious!!

      An arbitrators duty is to look at the entirety of the CBA, the contract in question and can look to a variety of tools in question in achieving that goal including other awards and decisions, and where a clause appears to be ambiguous, he can look to extrinsic evidence to assist. The most typical extrinsic evidence is past practice and previous agreements and the parties negotiating practice.

      Here undoubtedly the Union put in evidence….. this contract, and that contract and that contract and argued: see these contracts are all good and valid contracts under the CBA.

      The worse part is the NHLPA will now have a very difficult time saying….wait a minute Arbitrator Bloch, you should not be looking at those contracts in the context of the wording of the CBA.

      Usually it is the other side that questions the propriety of evidence that you put before the trier of fact

    14. Vic Ferrari
      August 10, 2010 at

      I’m with the last few commenters, I’m surprised by MC’s original opinion.

      Everyone’s idea of the mythical ‘reasonable man’ is different, but surely every single one of our reasonable men would see this deal as pure bullshit. An end run around the salary cap, nothing more than that.

    15. Matt D
      August 10, 2010 at

      Tyler isn’t suggesting that the deal isn’t unreasonable, or isn’t designed to do an end run around the intention of the cap. That’s not the point. He’s suggesting that there’s nothing in the CBA that prohibits this contract. Which seems to be true.

      The question isn’t whether a ‘reasonable man’ would think that the contract is bullshit– it is bullshit. The question is whether the contract is against the rules. Which it isn’t, unless the rules are “whatever Gary says.” I’d think the PA would be surprised to learn that those were the rules.

    16. Vic Ferrari
      August 10, 2010 at

      Matt D:

      “No Club or Player shall enter into any Player Contract, Offer Sheet or other agreement that includes any terms which are designed to serve the purpose of defeating or circumventing the intention of the parties as reflected by the provisions of this Agreement”

      This is a copy and paste from Cosh’s site (which you should bookmark, if you haven’t already).

      Cosh also includes the last sentence from that paragraph:

      “However, any conduct permitted by this Agreement shall not be considered to be a violation of this provision.”

      His argument, as I understand it, is that the last sentence is the hammer. I disagree.

      The conduct in the Kovalchuk contract (and several before it, for that matter) was not permitted by this agreement, as is expressed in the first sentence.

      Now in the real world almost every contract has massive flaws. Not because people don’t want perfect contracts, but because people are willing to accept the risks of an imperfect contract, or a vague compromise of boiler plates, to avoid the costs associated with making it clean.

      If we all conducted business in the manner MC79 recommends … the economy would go in the crapper. It’s just not reasonable, nobody can afford that kind of front end cost in our world.

      Of course they regret it when things go sour, and when that happens … well 99% of the time these things go wrong because the buying party has cash flow problems. That’s a separate issue. But I digress.

    17. Tyler Dellow
      August 10, 2010 at

      Now in the real world almost every contract has massive flaws. Not because people don’t want perfect contracts, but because people are willing to accept the risks of an imperfect contract, or a vague compromise of boiler plates, to avoid the costs associated with making it clean.

      This whole thing is happening at about the worst time imaginable for me as I’m very busy tying things up at work before heading off to Europe for a few weeks. I could post on Bloch’s decision every day for a week.

      In any event, I think that there’s some merit to Vic’s position and I think that, in a lot of ways, it’s recognized in law. There are rules about interpreting contracts that take into account the circumstances in which they’re made. If you go out and buy insurance, the courts recognize that the contract isn’t really negotiated in any sense of the word – it’s presented to you by a party with disproportionate bargaining power. They interpret any ambiguity against the party drafting it.

      This isn’t the situation referred to by Vic though. In this case, one sophisticated party and one party with enough money that we’ll call it sophisticated sat down and worked out a deal. As Rajeev notes, the NHL tried and failed to get terms that would have made this contract illegal. I can’t tell, from reading this decision, what the rule is now. It’s apparently in the discretion of the commissioner and, ultimately, the arbitrator, on the basis of a smell test. He’s using phrases like “reasonably unlikely” in describing the odds that Kovalchuk finishes the contract. “Reasonably unlikely” means different things in different circumstances.

      One aside that doesn’t get mentioned enough: the CBA, as drafted, is a piece of shit with all sorts of problems. I’ll deal with this in some more length when I’ve got some more time.

    18. The Other John
      August 10, 2010 at

      Here is where I disagree with some of what has been written. Bloch was asked to arbitrate this contract in the context of the whole of the Collective Agreement. He did so. Looking at the Collective Agreement as a whole. This is not an Arbitrator upholding a strong management rights clause. There is no suggestion of that here. What you have is an Arbitrator saying there is NOTHING directly on point for either the NHL or the NHLPA and in looking at the agreement as a whole I do not believe that is what either party believed then or believes now the Agreement provided for.

      It is also why the Oiler repeated comments about the Khabbibulin contract morality clause are complete conjecture. Until you have precedent no lawyer will try to tell you a particular outcome is. Lawyers are great predictors of outcome based upon precedence. Absent precedence, you are left with Dan Tencer asking hockey operations guys what they think will happen. Next thing you know Tencer will ask movie camera men what they believe the box office revenue will be on any given movie before
      the movie has been edited.

    19. Jon K
      August 10, 2010 at

      It’s a shame about the last post’s comments being taken down. I thought I’d offer as a somewhat friendly comment relating to anyone’s thoughts on a plea bargain being reached.

      One of the criticisms of mandatory minimum sentences is that they tend to discourage plea negotiations, indirectly inflating court congestion and the cost to the government of operating the courts. There is very little incentive to voluntarily enter a guilty plea when there is a 100% chance of your client’s liberty being constrained for at least 30 days. Hence, more time-consuming trials and speedy guilty pleas. Interest in these matters is particularly important right now because of the current Federal government’s “plans” for fighting unreported crime by legislating more mandatory minimum sentences and increasing prison and penitentiary capacity.

      Long story short, it’s very unlikely that there will be a plea bargain for Khabibulin. If he’s convicted, it is also unlikely he makes it to the start of training camp because he won’t be sentenced on the day he’s convicted.

    20. Tyler Dellow
      August 10, 2010 at

      Before I respond Jon K, I just want to point out that, while I got an “A” in criminal law and won the course prize in my first year of law school, I only got a “B” in criminal procedure, although I took it in my second semester of third year, the Oilers were in the playoffs (a tournament held in April-June that they used to play in) and didn’t really put in a lot of effort. I have never practiced criminal law.

      I think that you’re talking more about the effect of mandatory minimums. If there was no mandatory minimum in this case, I would think that Khabby and the prosecutor could come to a deal, if the prosecutor was so inclined, and make a joint submission on sentence. In this case, you’re right, there’s no incentive to do that because of the minimum.

      As far as a plea bargain goes, maybe it’s inappropriate, but I usually think of a deal whereby a plea is entered to a lesser charge when I talk about that. I understand that in some rural parts of Canada, the effect of a mandatory minimum loss of license for a defined period is dealt with by way of a plea to a lesser charge that doesn’t have that provision, like driving without due care and attention.

      I don’t know whether the prosecutor would accept a plea to a lesser charge in these circumstances. There might be rules in his office preventing him from doing so. I knew I’d seen this somewhere – it’s from The Phoenix DUI Blog and it says: “…And he might not be able to get away with a plea bargain even with a skilled Arizona DUI attorney. DUIAttorney.com states that the Scottsdale Prosecutor’s Office doesn’t usually plea bargain to any kind of reduction with extreme DUIs.”

    21. August 10, 2010 at

      In this case, one sophisticated party and one party with enough money that we’ll call it sophisticated sat down and worked out a deal.

      So good.

    22. The Other John
      August 10, 2010 at

      Jon K

      I feel left out.

      Did not realize Tyler got an A in crim and a B in crime trial pro! I respected him up to that admission :-) )

      Bizarre thing is not “Question”‘s impugning of Canadian lawyers commenting on American law. It is that Khabbibulin and his counsel have followed a strategy that greatly increases the likelihood of incarceration during the hockey season. That is simply unfathomable. They bet the absolute farm on getting evidence suppressed or acquittal. By delaying case, and they have done so deliberately, they put incarceration during the hockey into the equation.

      Would recent Bloch arbitration decision cause the Oil to at least reconsider decision not to void Khabbibulin contract? You would have to think so if you could get out from under $11.25 m contract. Also Katz group just terminated Capitals manager for wildly inappropriate baiting of Golden League umpire.

      Clear argument could be made that extreme DUI is much much worse than extreme verbal abuse.

      Wonder what Rick Olcyzk will say if “early season MVP” Khabbibulin gets his contract voided………………………….Ooops!!

    23. Vic Ferrari
      August 10, 2010 at

      Tyler,

      I think you’re quoting me unfairly. I don’t think this is a case of ‘The Big Rental Car Company vs Some Schmuck’ who got off a plane, dog tired, and signed just below the finger of the girl at the desk.

      This was a contract between equally competent parties, but it was expedited. And the spirit of the agreement, on this point at least, is obvious. I think we can agree on that.

      Obviously I’m not a lawyer, and many of you are. Do some of you take cases to court regularly?

    24. Tyler Dellow
      August 11, 2010 at

      Nobody in Canada takes civil cases to court regularly. It’s too expensive and fraught with risk; a lot of other stuff is, I understand, arbitrated because it’s cheaper and quicker. It’s rare that you get a chance like the NHL had here, where it’s literally nothing but upside. The only risk that they had here was Batterman’s fees and the loss of the threat that they’d wipe out a contract, which is of diminishing value with a new CBA coming up. In any event, I don’t know that taking cases to court regularly matters in looking at this. This is an intepretive exercise.

      Whether unwittingly or not, you’ve actually described the facts in one of the leading cases in Ontario dealing with interpreting form contracts. In any event, I don’t think I quoted you unfairly – I didn’t mean to imply that you were saying that this was a case like that. However, as the parties to an agreement get more sophisticated and the contract becomes more of a truly negotiated instrument, courts generally go on the language of the contract more frequently and less on what they perceive to be the expectations of the parties to the contract. I don’t disagree with your point about the marginal costs of making your contracts perfect and bulletproof but, where the parties are of equal power, as I think we’re assuming to be the case here, you don’t generally get to dodge the language quite so easily.

      Where I think we part company is on the spirit of the thing – I don’t think that the spirit is as clear as you do. Your point about it being drafted in haste is well taken and this CBA actually has a weird little provision in it:

      This Agreement, together with the exhibits and side letters hereto, if any,
      and any existing letter agreements between the parties that are not inconsistent with this
      Agreement, constitutes the entire understanding between the parties…

      Notwithstanding the above [basically a declaration that the agreement is a complete agreement], each party may offer testimony of conversations between them which informed their respective understanding of their provisions of this Agreement (i.e., “bargaining history”) and may refer to the notes, including any notes that were marked on drafts of this Agreement (although in all such cases the actual text of the drafts will be redacted), in any grievance arbitration or other proceeding in which such testimony may be considered relevant.

      This is unusual because contracts are usually said to speak for themselves. You don’t need someone to tell you what it means; you just read it, apply the rules of contractual interpretation and determine what it means.

      I can see two plausible arguments about the spirit of the thing here: the first is that it’s intended to prevent teams from spending more or less than +/- $8MM of the mid-point. The second is that it’s intended to prevent teams from “spending” more or less than +/- $8MM of the mid-point, with “spending” being defined as “spending, as that is permitted by the letter of the CBA.”

      Where the onus is on the NHL, as it was here and both spirits are plausible (particularly because the +/- $8MM is implictly subject to contracts that are structured with payouts different than cap hits, as the CBA permits), I can see some holes here.

      I think Rajeev probably has it right – it’s defensible but there are some leaps and some troubling assumptions. I think that the PA can legitimately disagree with you on the spirit of the thing.

      It’s interesting to me, given that the parties were (unusually, and presumably as an acknowledgment of the fact that this was prepared in haste (something that shows)) permitted to lead evidence about intention, nobody apparently did. At the very least, there’s no evidence of intention referred to in the decision, just Bloch making a decision about intention from reading the Team Payroll System section in a void.

    25. YKOil
      August 11, 2010 at

      Myself, I wonder what role:

      – ‘age’ and
      – the % of players to make said age

      had to play in all of this.

      The ages 38 through 40 are not unheardof numbers for a hockey player. Would a different arbitrator rule differently if the contract ended at a time when the player could still, more probably than hypothetically, play.

      That said, Tyler and Vic both score imo.

      Tyler’s read on the rules is right… and so is Vic’s read on the extent to which the contract tries to make a mockery of the spirit of the agreement.

      Removing the NTC/NMC shenanigans and bringing the contract to a close at age 40 would have, imo, resulted in a more favorable ruling.

    26. August 11, 2010 at

      This isn’t the situation referred to by Vic though. In this case, one sophisticated party and one party with enough money that we’ll call it sophisticated sat down and worked out a deal. As Rajeev notes, the NHL tried and failed to get terms that would have made this contract illegal. I can’t tell, from reading this decision, what the rule is now. It’s apparently in the discretion of the commissioner and, ultimately, the arbitrator, on the basis of a smell test. He’s using phrases like “reasonably unlikely” in describing the odds that Kovalchuk finishes the contract. “Reasonably unlikely” means different things in different circumstances.

      At some point, the difference between a 50 year contract and a 10 year contract had to be drawn. Presumably, a 50 year contract would not be within the bounds of the CBA (and in fact, in the text Bloch’s ruling, he mentions this and that the NHLPA concedes that such a contract would be invalid), and yet a 10 year contract specifically IS within the bounds of the CBA. So somewhere between the two is a line where you stop being in compliance with the CBA. The NHLPA even indirectly agrees to this, when they say that a hypothetical 50 year contract would be invalid. So in terms of finding that term limit, that’s something the NHLPA agreed to. They just didn’t like the result.

      On top of that, the decision itself was fully within the bounds of the CBA as well. The CBA specifically stated that if the contract was made with the intention to circumvent, or had the effect of (intentional or not), then it could be rejected justly. We have no doubt that the 6 year tail existed purely to circumvent the cap, whether or not there was an unwritten deal that Kovy would retire at that point. The likelihood of Kovalchuk playing at that point is really only an issue in that it illustrates why NJD would prefer that contract structure, instead of some other. The most damning thing in this case, to my mind, is that neither party would be happy if, for example, the money was redistributed to be ~6M/yr, or the structure were reversed, or the contract otherwise altered. Why? The only answer that makes sense is that they don’t intend for him to play the end of the contract.

    27. August 11, 2010 at

      oh holy shit this asploded while i was slowly typing that while doing other things

    28. August 11, 2010 at

      Here it is, thanks to Jewels From The Crown:

      A contract term covering a Player’s NHL services to age 70, for example, is not expressly prohibited by the CBA. But the parties to that SPC may not reasonably be found to be seriously anticipating its fulfillment. The Association does not suggest that such agreement must pass muster under Article 26.

      That’s a passage from Bloch’s decision. The NHLPA admits that at some point there is presumably a limit on term length. They just want that limit to be maybe like 45 years.

    29. Vic Ferrari
      August 11, 2010 at

      Thanks Tyler, that’s terrific stuff.

      I didn’t mean to seem snarky with my last sentence above, the ‘appearing in court’ thing. It was a stream of consciousness, that’s all.

      I appreciate the insight of the people who comment here. They are obviously qualified and are generally offering commentary of real value.

      It has always struck me as a bit incongruous, though. Do the same lawyers who admonish you for using a comma instead of a semicolon (as if it was a heinous crime) handle the court task as well? I mean, as you know, juries are crazy things. It’s not like TV, more like a bad neighbourhood in hard back chairs.

    30. Tyler Dellow
      August 11, 2010 at

      The NHLPA admits that at some point there is presumably a limit on term length. They just want that limit to be maybe like 45 years.

      That’s a very strange admission for them to have made. It is seemingly contrary to their position when the hearing started. It’s not supported by anything explicit in the CBA. Once they made the concession, they were in deep water because they’d basically given away their best argument. Bloch obviously seized on it – he references it in both the body of the decision and in a footnote.

    31. Tyler Dellow
      August 11, 2010 at

      Do the same lawyers who admonish you for using a comma instead of a semicolon (as if it was a heinous crime) handle the court task as well?

      In a lot of areas of law, the answer is no. Labour law is a bit different though. It’s my understanding that many labour lawyers will do both the drafting and the litigation/arbitrations that arise out of it.

    32. August 11, 2010 at

      It’s interesting to me, given that the parties were (unusually, and presumably as an acknowledgment of the fact that this was prepared in haste (something that shows)) permitted to lead evidence about intention, nobody apparently did.

      I’m basically going to repeat myself here, but the more I think about it, the more shocked I am that the NHLPA seemingly did not raise the issue of 35+ yea old contracts counting against the cap even if the player retires during the course of the contract. This CBA provision is intended to prevent the exact type of conduct that the league is saying circumvents the cap, only they were only able to get it in the CBA as applying to 35+ year olds. The NHLPA should have been hammering away on this point as it speaks to both the intention of the parties and actual content and spirit of the CBA. Ditto re the 100% rule. There’s an argument that Bloch has basically gone back in time and given the league one of the few things it was not able to get during the negotiation.

      That’s a very strange admission for them to have made. It is seemingly contrary to their position when the hearing started.

      That raised my eyebrows when I read it too. I think, on the one hand, the NHLPA doesn’t want to be put in the ridiculous position of saying, “a 70 year contract is not against the rules, and thus it cannot circumvent the cap.” One the other hand, once you make that admission, you’re kind of giving away the house and giving Bloch a lot of leeway. I think the best response would have been to note that such a contract is not at issue and not before the arbitrator, and that there’s really only a need to consider the specific Kovalchuk contract, and not other wacky hypotheticals, in the context of the CBA. I’ve been saying it for a while, but I just think the quality of the lawyering on the NHL side seems a whole lot better in these instances, see also NHL v. Moyes and Balsille. I’ve never heard of McCambridge’s firm (it’s a pretty small lit botique in Chicago), and while the lawyers there seem fairly pedigreed and experienced, their website does not appear to work, which is kind of a bad sign.

    33. Vic Ferrari
      August 11, 2010 at

      Rajeev,

      I’m not a lawyer, so be patient with me.

      If the everyone foresaw these types of lifetime contracts on the horizon, and the NHLPA fought for their inclusion – then I think everyone would agree with you.

      From what Tyler said, this arbitration case was likely drafted by some of the NHLPA lawyers that argued this case, no? If that was their intent, wouldn’t they be allowed to bring other evidence (written communications, minutes of meetings, etc.) to support that assertion?

      Personally, I doubt the NHL was that averse to having the contracts of retired/long-term injured players removed from the cap calculation. The last thing they would want is a big market team like Detroit to struggle for years because Zetterberg and Datsyuk both signed long term deals and then got into a car accident. And I assume that in that situation, the salaries paid to Z and Datsyuk over the remainder of their contracts would not be added to the league payroll total (I’ll have to check, but I’ve always assumed that’s the way it worked).

      When I first heard of the “over 35″ rule re cap hit and retirement, I just assumed that was included so that a player like Modano – playing one last year to get a cup – couldn’t make a handshake agreement with Ilitch to play for just one year of a three year contract and then retire.

      If there was evidence that the NHL foresaw this situation, and tried unsucessfully to incorporate rules to prevent it, then I agree you. I think everyone does. And if there is evidence that suggests this was the case … why on Earth would the NHLPA lawyers choose not to present it at the arbitration hearing?

    34. kris
      August 11, 2010 at

      Question for all you Kansas city law-dogs. (5 dollars to anyone who catches that reference w/out using Google.)

      Is there a standard legal interpretation of what “circumvents” means, especially in cases where a contract deploys the word “circumvents” without an explicit definition?

      That seems to be a large part of what’s at issue here. I think the-contract-is-legit folks are taking “circumvents” to mean something like “violates the letter of the law” or perhaps even “violates the spirit of the law.” But I’m not sure that circumventing a rule is the same as breaking it or violating it. Indeed, I would imagine there are a lot of cases where a law is circumvented, but the person doing the circumventing can’t be arrested until a new harder to circumvent law is rewritten. (I believe this was the case with heroin. Heroin was made illegal so pushers found chemists to make similar chemicals and sell those. Anti-heroin laws then had to be expanded, because the sale of the heroin derivative didn’t violate the law even though it clearly circumvented it. (I suspect you can’t introduce broad “no circumvention” clauses into legislation -as oppposed to contracts- precisely because they are so, so broad. All just suspicion, IMO.)

      On the other hand, the-contract-is-not-legit-under-the-CBA side seem to have a broader definition of “circumvents.” It’s a little harder to be explicit about exactly what this broader definition is, though.

      I’d suggest a kind of deontological, Kantian definition, as follows: “A contract circumvents the CBA if and only if it were such that if everyone in the league were to sign a similar contract, it would make some provision in the CBA completely meaningless.” For example, if everyone were to start signing 70 year -or 1000 year- deals, it would make the salary cap provisions of the CBA meaningless, since any team could then sign a player for virtually any amount. (It would not violate or circumvention the 54% of revenue rule, of course.)

      Anyway, is there a definition of circumvention? Was the NHLPA giving away a world of stuff when they allowed in this stuff about circumvention? Am very interested in this but completely without knowledge about it.

    35. Triumph
      August 11, 2010 at

      I find it hard to believe that the NHL foresaw these contracts. There’s been a lot of chatter about how the NHL wanted contract term limits (supposedly 3 years maximum, which honestly makes little sense), but I’m convinced that was either A: an attempt to legislate into the CBA the inability for the owners/GM to really Redden themselves into a corner or B: a false demand that inevitably gets negotiated out with a ‘real’ demand of the other side.

      Throw in the fact that the first clear ‘tail’ didn’t appear until January 2009 when Zetterberg signed his deal – and the NHL blithely looked the other way – I’m not convinced the NHL foresaw any of this. They’re fools not to have seen it coming after that and the Franzen contract, but it’s possible that they did not.

    36. August 11, 2010 at

      That raised my eyebrows when I read it too. I think, on the one hand, the NHLPA doesn’t want to be put in the ridiculous position of saying, “a 70 year contract is not against the rules, and thus it cannot circumvent the cap.” One the other hand, once you make that admission, you’re kind of giving away the house and giving Bloch a lot of leeway. I think the best response would have been to note that such a contract is not at issue and not before the arbitrator, and that there’s really only a need to consider the specific Kovalchuk contract, and not other wacky hypotheticals, in the context of the CBA.

      But the thing is, that’s where this was going – If Kovy’s 17 year contract is permissible, then why not an 18 year contract? Or a 19 year contract? … Or a 47 year contract? At some point, for the good of both parties involved, there has to be a limit. The NHL as a sports league is already on the fringe – letting the salary structure and CBA be undermined by all star players being signed to joke contracts of 50 years would only make things worse for both the players and the league.

      That’s the reason why I don’t understand Tyler’s position of being worked up that something was essentially added into the CBA in an inappropriate manner. No one on either side should have wanted the 50 year contracts, because they hurt everyone involved. So at some point, there HAD to be a term limit, it just wasn’t clear what it was. Yes, the NHLPA probably fucked up by explicitly stating that a 50 year contract would be unacceptable, as that illustrates that a line does indeed exist. But whether they admit such or not, the fact still remains that such a contract would be (and should be) indefensible AND undesirable for both parties.

    37. August 11, 2010 at

      From what Tyler said, this arbitration case was likely drafted by some of the NHLPA lawyers that argued this case, no? If that was their intent, wouldn’t they be allowed to bring other evidence (written communications, minutes of meetings, etc.) to support that assertion?

      The arbitration was handled for the NHLPA by McCambridge and Conway. McCambridge, and not Conway I believe, was involved to a certain extent in the drafting of the CBA. To what extent is unclear, as the drafting sessions, even after the NHLPA caved on salary/revenue linkage, were fairly extensive and demanding. The NHLPA had numerous in house counsel involved, presumably McCambridge had other clients he had to service at the time, it wouldn’t surprise me if McCambridge wasn’t involved in every session and wasn’t consulted on every issue. That would have been kind of a mistake in my opinion, but the well runneth over with NHLPA mistakes since 2004. I think, and this is frankly beyond belief, that there are no in house legal people left over from the CBA negotiations, which probably explains the Bloch result as much as anything else we could talk about.

      But to answer your question, yes, in this case, all those other communications could be brought in. Normally, an agreement like this would have a merger clause that states that it is the complete agreement and no other understanding between the parties not contained herein mean anything, etc., but as Tyler pointed out, the CBA contains that unusual provision allowing for notes and testimony of conversations to come in. So, yes, all that stuff could’ve come in. It probably couldn’t have hurt the NHLPA to get Saskin to testify on the issues of 1) to what extent the NHL tried to get contract term limits, 2) how heavily the 100% rule was negotiated and what other alternatives were discussed, and 3) the purpose of the 35+ rule and what other alternatives were discussed. Perhaps, there were no discussions/negotiations re these issues, and that’s why they weren’t raised in the arbitration. I’m somewhat skeptical of that, though.

      The last thing they would want is a big market team like Detroit to struggle for years because Zetterberg and Datsyuk both signed long term deals and then got into a car accident.

      Well, the last thing I’d expect is the NHL to not want its best players in the the markets that drive revenues. Not allowing for the New Yorks and Bostons and Chicagos and Torontos and LAs to collect the best players hurts the league as a whole. Outside the context of the next CBA negotiation, which is playing a huge part, and the context of Bettman wanting to run the league with complete control, which is playing a lesser but still meaningful part, I have no idea why the league is fighting this battle. Hurting NJ to help Nash is a dumb move.

      When I first heard of the “over 35″ rule re cap hit and retirement, I just assumed that was included so that a player like Modano – playing one last year to get a cup – couldn’t make a handshake agreement with Ilitch to play for just one year of a three year contract and then retire.

      Agreed, but isn’t that all the Kovy deal is? A handshake agreement over a much longer term. They prevent the same behavior, I think. One was negotiated for in a legitimate collective bargaining process. The other was provided by a arbitrator 5 years into the agreement.

      And if there is evidence that suggests this was the case … why on Earth would the NHLPA lawyers choose not to present it at the arbitration hearing?

      Well, I think clearly there is no direct evidence on the point. But I think the fact that the NHL did get other controls on this specific issue/concern (the 100% rule and the 35+) but didn’t get a provision that explicitly disallows this SPC, I think that fact is material and persuasive. Look, I’m not crazy about this argument, I think the NHL had a good case, and I think Bloch’s decision is defensible. I am just very concerned that Bloch didn’t address this point, which makes me think the NHLPA didn’t make it. That is alarming to me.

      The no contract length point, which the NHLPA did raise, is not that persuasive to me because it’s not just the length of the SPC that creates the problem here. The comparison to other SPC’s, which the NHLPA did raise, is not that persuasive to me because those deals, evidenced by that little graph Gabe created a while ago, are different than this one. This one, as has been pointed out by everyone, takes it to the extreme.

      I find it hard to believe that the NHL foresaw these contracts.

      While I think it’s possible they didn’t foresee this kind of stuff, I find that hard to believe. The NHL guys are too smart not to have predicted it. It just seems too obvious to me that if you allow cap hits to go away once a player retires and you average salaries to get cap hit that, you have to expect these kinds of deals. I’m sure there was tons of stuff going on, lots of different considerations and provisions, but this seems to big to have missed. I think the NHL was planning on using circumvention all along to stop them, and they waited for the perfect storm of the extreme contract and headless union. Say what you will about Bettman/Daly, but they are brilliant lawyers and businessmen. I would have loved to see Paul Kelly deal with this. But I guess he was mean to some secretaries in the PA office, so thankfully they got rid of him.

    38. Triumph
      August 11, 2010 at

      Well, the last thing I’d expect is the NHL to not want its best players in the the markets that drive revenues. Not allowing for the New Yorks and Bostons and Chicagos and Torontos and LAs to collect the best players hurts the league as a whole. Outside the context of the next CBA negotiation, which is playing a huge part, and the context of Bettman wanting to run the league with complete control, which is playing a lesser but still meaningful part, I have no idea why the league is fighting this battle. Hurting NJ to help Nash is a dumb move.

      Really? How about the fact that these front-loaded contracts undermine the escrow system, as demonstrated nicely by Tyler? Escrow’s likely going to be item #1 for the NHLPA during the next collective bargaining agreement, and if you let ten more of these deals into the league, you’re reaching a point where 1-2% of player salaries actually go to these contracts. 1-2% isn’t excessive, but it’s a problem. The NHL is not going to let the escrow system go.

      While I think it’s possible they didn’t foresee this kind of stuff, I find that hard to believe. The NHL guys are too smart not to have predicted it. It just seems too obvious to me that if you allow cap hits to go away once a player retires and you average salaries to get cap hit that, you have to expect these kinds of deals

      Then how come it took 3½ years after the CBA was ratified for the first one to be signed? Sure, other contracts were front-loaded, but not with the expectation that the player would most likely not be playing the tail end.

      Say what you will about Bettman/Daly, but they are brilliant lawyers and businessmen

      I think they’re far better than most NHL fans believe. I still would hesitate to call them brilliant businessmen. Then again, I would hesitate to call the NHLPA only ‘marginally incompetent’, so it’s still not a fair fight.

    39. August 11, 2010 at

      Really? How about the fact that these front-loaded contracts undermine the escrow system, as demonstrated nicely by Tyler?

      I agree, these types of deals are terrible for the non-stars of the league. That is the most ironic part of this whole controversy – a point I completely muddled earlier in this thread – the league is arguing the position that hurts itself, and the PA is arguing the position that hurts the majority of its membership. Awesome. In a saner world, and one outside the context of upcoming CBA negotiations, the parties should be arguing the opposite sides.

      Escrow’s likely going to be item #1 for the NHLPA during the next collective bargaining agreement

      Couple points:

      If the NHLPA thinks it’s getting rid of escrow anytime soon, I’ll save them some trouble with this advice: there is no way it is happening. The NHL lost a whole year and spent a lot of goodwill capital with its fans in getting salaries linked to revenues, they will NEVER give it up as long as the Bettman is alive let alone employed by the league. The PA’s best bet is to try and get its percentage share increased a percent or two, but more likely they are going to have to settle for getting a piece of the expansion pie, playing in the Olympics, and keeping all contracts guaranteed. Another reason why firing Kelly was a mistake, I assume he realized that ship had sailed long ago. You gotta know which battles make sense to fight.

      Also, re escrow, this is another reason why the NHL shouldn’t really care about these kinds of deals. As long as the players share is fixed, why does Bettman care whether or not Kovalchuk is taking away money from Jordin Tootoo? He shouldn’t.

      Then how come it took 3½ years after the CBA was ratified for the first one to be signed?

      The UFA age wasnt reduced to 27 until 3 years in, and it makes more sense (and the optics look better) when signing that kind of player. Also, GM’s are often dumb and/or conservative. Burke said he’d never do a deal like this anyway. And only a few teams have the money to do it (see Lombardi and the Kings wrt to Kovy). The Rangers are the obvious team to do it, but Sather would rather sign players like Redden, Gomez, and Drury to deals w/o any tails on them. I can’t come up with a reason why.

      I still would hesitate to call them brilliant businessmen

      I don’t know if they’re brilliant businessmen in the technical sense of the word, but they are certainly brilliant in-house lawyers, which I view in their case as being more involved in “business” than “law.” But as far as being brilliant marketers/salesman, the jury is obv very much out.

    40. Straliamoite
      August 11, 2010 at

      “Chicago may not have won the Stanley cup”… glib… BUT:

      1) Capgeek, sanctions already in place…
      2) google Melbourne Storm.

    41. Triumph
      August 11, 2010 at

      That is the most ironic part of this whole controversy – a point I completely muddled earlier in this thread – the league is arguing the position that hurts itself, and the PA is arguing the position that hurts the majority of its membership

      If we knew what the league was up to regarding CBA negotiations, I’d agree. I don’t know if the league wants all of these contracts on its ledger in 2020. You are right that it benefits big markets and thus the league to have these contracts around – the league must have some other reason for rejecting them besides on principle.

      If the NHLPA thinks it’s getting rid of escrow anytime soon, I’ll save them some trouble with this advice: there is no way it is happening.

      I agree, but the NHLPA walked into the last round of negotiations saying no salary cap, and came out of them with a salary cap. I agree that the system isn’t going away, but the players will want some sort of alteration to the system. Whether they get it, who knows.

      Re: your point about front-loaded deals not appearing until 2009, that’s a good point about UFA age that I didn’t consider. I still think we would have seen a few had it been ‘widely known’ (e.g. the Patrik Elias and Zdeno Chara deals). I also would not call general managers conservative – they tend to operate under the principle of making the best moves for the short-term and if it doesn’t work out, they find another job.

    42. Matt D
      August 11, 2010 at

      I think the general lack of offer sheets for RFAs speaks to the conservatism of GMs. We’re STILL talking about the Penner one, and that was 3 years ago. GMs have a great tool for screwing over their and losing young talent, and they almost never take advantage of it.

    43. Tyler Dellow
      August 11, 2010 at

      Vic –

      The NHL had the onus in this case to establish that there was an intention to ban contracts of this nature. It seems to me that you’re asking the wrong question:

      If there was evidence that the NHL foresaw this situation, and tried unsucessfully to incorporate rules to prevent it, then I agree you. I think everyone does. And if there is evidence that suggests this was the case … why on Earth would the NHLPA lawyers choose not to present it at the arbitration hearing?

      The problem, I think, is that you’re asking the wrong question. The NHL and NHLPA set up what is purportedly a comprehensive agreement to cover labour relations issues. There’s an answer to the question found in the CBA – some limits are placed on contracts but nothing here.

      It’s notable, I think, that the NHL didn’t argue that the CBA simply didn’t deal with this because nobody foresaw it – they knew that that was a loser argument.

    44. Tyler Dellow
      August 11, 2010 at

      Is there a standard legal interpretation of what “circumvents” means, especially in cases where a contract deploys the word “circumvents” without an explicit definition?

      There isn’t. It’s been a bit aggravating reading the discussion of this case, in which circumvents is being used in its colloquial term.

      In this case, the term “circumvents” is defined in the CBA, although the definition does not purport to be exhaustive. If you look at s. 26, you’ll see that there’s a bunch of conduct defined as being circumvention.

      (I suspect you can’t introduce broad “no circumvention” clauses into legislation -as oppposed to contracts- precisely because they are so, so broad. All just suspicion, IMO.)

      Yeah, there are certain principles at play in that case, like the idea that you should know what sort of conduct is proscribed. Conrad Black is out of jail right now because the USSC thought that the US government was pushing a statute too broadly. One of the court’s strict constructionists (he would likely not have been impressed with the NHL’s position here), Scalia, wanted to throw the whole thing out for vagueness.

      For example, if everyone were to start signing 70 year -or 1000 year- deals, it would make the salary cap provisions of the CBA meaningless, since any team could then sign a player for virtually any amount.

      Yeah but that’s sort of the thing. There’s no way that teams are going to sign very many people to these deals. Your question is kind of meaningless because it simply wouldn’t happen.

    45. Tyler Dellow
      August 11, 2010 at

      At some point, for the good of both parties involved, there has to be a limit. The NHL as a sports league is already on the fringe – letting the salary structure and CBA be undermined by all star players being signed to joke contracts of 50 years would only make things worse for both the players and the league.

      Yeah but that’s not for the league to decide on its own. The league negotiated this specific structure. If it hadn’t pursued a cap, it wouldn’t have crated incentives for teams to enter into these types of contracts. You shouldn’t be able to negotiate 80% of what you want and then rely on an arbitrator to give you that which you couldn’t otherwise obtain.

      That’s the reason why I don’t understand Tyler’s position of being worked up that something was essentially added into the CBA in an inappropriate manner. No one on either side should have wanted the 50 year contracts, because they hurt everyone involved. So at some point, there HAD to be a term limit, it just wasn’t clear what it was. Yes, the NHLPA probably fucked up by explicitly stating that a 50 year contract would be unacceptable, as that illustrates that a line does indeed exist. But whether they admit such or not, the fact still remains that such a contract would be (and should be) indefensible AND undesirable for both parties.

      This isn’t the place for that to be obtained by the NHL. The place for that is and should be at the negotiating table. There are all sorts of ways to prevent these deals, many of which the league was clearly aware of – limits on term, making the contract count regardless of retirement, limits on the amount by which compensation can change.

    46. Tyler Dellow
      August 12, 2010 at

      Outside the context of the next CBA negotiation, which is playing a huge part, and the context of Bettman wanting to run the league with complete control, which is playing a lesser but still meaningful part, I have no idea why the league is fighting this battle. Hurting NJ to help Nash is a dumb move.

      Bettman has his own power base to maintain and Nashville has been a big part of it. I’ve got a reasonable source who tells me that there are eight owners who would love to get rid of him, 10 to 12 who are indifferent as long as he doesn’t bug them and then, presumably, 10 to 12 who are in his corner. You tell me whether those teams are likely to be the rich ones or the poor ones.

    47. Tyler Dellow
      August 12, 2010 at

      If the NHLPA thinks it’s getting rid of escrow anytime soon, I’ll save them some trouble with this advice: there is no way it is happening. The NHL lost a whole year and spent a lot of goodwill capital with its fans in getting salaries linked to revenues, they will NEVER give it up as long as the Bettman is alive let alone employed by the league.

      I don’t think that they’ll get rid of escrow but I wonder if they can’t link it. It strikes me that one of the problems with the negotiations that the PA and NHL do is that there are cleavages within each side that don’t just exist in the classic labour context.

      I’ve been reading a bit about EPL history recently. The league, as I understand it, essentially came about when the rich clubs that were generating money got tired of subsidzing the poor clubs that didn’t generate enough of it. They were tired of sharing TV revenue amongst all of the clubs in all of the divisions and they said “To hell with you.”

      At some point, I wonder if something similar happens in the NHL. There are all sorts of opportunities for a clever and well run union to rip the owners apart in the next negotiations. One way would be to propose a lot more revenue sharing. Is Nashville going to be opposed to that? Is Atlanta?

      I would have to think that some of the richer teams aren’t wild about the current setup either. The Leafs played 32 home playoff games in the five years leading up the lockout. I can’t rememeber the exact number that they’ve played since, but I don’t think it’s quite that. The savings on salary are nice, but they’re paying revenue sharing now and prevented from making big bucks in the playoffs. How wild are they about handcuffing themselves for the benefit of Nashville and Atlanta?

    48. Tyler Dellow
      August 12, 2010 at

      The Rangers are the obvious team to do it, but Sather would rather sign players like Redden, Gomez, and Drury to deals w/o any tails on them. I can’t come up with a reason why.

      He’s not a particularly sophisticated or creative guy would be my guess.

    49. kris
      August 12, 2010 at

      There isn’t [a standard legal definition]…the term “circumvents” is defined in the CBA, although the definition does not purport to be exhaustive. If you look at s. 26, you’ll see that there’s a bunch of conduct defined as being circumvention.

      I took another look at s.26. I didn’t understand all of it, but it seems to me that you’re right: the definition isn’t exhaustive: it’s an incomplete picture. But doesn’t that leave it up to the arbitrator to decide whatever he feels is reasonable according to some colloquial definition? (As, there’s no technical definition of circumvents that can be appealed to.)

      I do like that not listing income from mascot appearances is given as a pardigmatic instance of circumvention, though.

      it simply wouldn’t happen.

      I didn’t mean to say that it could or would really happen. I botched the point, which was to suggest that conduct x circumvents a law y iff it wouldn’t be possible -even as a hypothetical- for everyone to engage in x while y still has any force. It’s not an important point at all.

    50. Jon K
      August 12, 2010 at

      The Other John: I’m not sure that Khabibulin has been attempting to delay the case. Twice it’s been bumped by a busy docket, which is the reality of justice systems that are perpetually overbooked. As an aside, we’ve actually done a good job in Alberta of attempting to manage that with a new “feeder” courtroom system. Anyway, when given the chance to take an earlier date by electing Judge alone, Khabibulin took it. This was done despite statistics showing that acquittal rates on these types of offences being higher with jury trials.

      Tyler: The circumstances you’ve mentioned certainly describe a great deal of plea bargains. I was referring more to situations where the reasonable range of sentences for a given criminal offence could include incarceration at the top end or a large fine or period of probation at the low end. These are situations where mandatory minimum sentences of incarceration discourage plea bargains whereby the accused will agree to plead guilty in exchange for a joint submission from Crown counsel on the low end. The problem is that, generally, legislation imposing mandatory minimums target these situations exactly, seeking to take away prosecutor discretion to give “soft” sentences.

      Though I’m by no means an expert in American jurisprudence relating to plea bargains, I can advise that I’ve recently researched a bit of it. Their system in this area is very similar to ours, although in general I’d offer the opinion that their case law is quite a bit more refined than ours.

    51. Triumph
      August 12, 2010 at

      I would have to think that some of the richer teams aren’t wild about the current setup either. The Leafs played 32 home playoff games in the five years leading up the lockout. I can’t rememeber the exact number that they’ve played since, but I don’t think it’s quite that. The savings on salary are nice, but they’re paying revenue sharing now and prevented from making big bucks in the playoffs. How wild are they about handcuffing themselves for the benefit of Nashville and Atlanta?

      the leafs were probably the oldest team in league history in 2004 – even under a non-salary-cap, i doubt they would have done very well over the last 5 seasons.

      that said, they are still making money hand over fist without even having to make the playoffs.

    52. August 12, 2010 at

      I would have to think that some of the richer teams aren’t wild about the current setup either. The Leafs played 32 home playoff games in the five years leading up the lockout. I can’t rememeber the exact number that they’ve played since, but I don’t think it’s quite that. The savings on salary are nice, but they’re paying revenue sharing now and prevented from making big bucks in the playoffs. How wild are they about handcuffing themselves for the benefit of Nashville and Atlanta?

      You’re conflating “salary cap” with “incompetent management.”

    53. Sens Fan
      August 12, 2010 at

      Someone pointed out that in a “saner” world that the NHLPA would be arguing the NHL’s position. So I ask why is it seen as automatic that the NHLPA wanted to win this case.

      If we break down who would want what, I think a small majority of NHL clubs (say 20) would want this contract deemed void, and an overwhelming majority of the NHLPA (95+%) also wanting these contracts rejected (especially hypothetical 50 year contracts and the like). So with the interests of both parties actually somewhat aligned, why is the decision of an arbitrator in favour of those interests so surprising?

    54. The Other John
      August 12, 2010 at

      Jon

      Khabibulin and his defense counsel have elected trial by jury, brought a motion to supress evidence and after having been bumped from a docket twice, now elects to proceed by judge alone.

      Sorry ……that is the path most frequently travelled and is a viable defense strategy….
      Delay in proceeding is a very good and effective tool in a defendants arsenal. Delay, delay, delay. Witnesses can die, memories can fade, witnesses can be lost, documents go missing, etc.

      But do not suggest that Khabibulin was just a cork bobbing along the Arizona court process with no eye to disposition. Cuz if that is the case, he truly went cheap on his lawyer. The problem is that by not following the path to the quickest possible disposition, any jail time looks like it could, now, slop over into his NHL season.

      I reiterate, they bet the absolute farm on getting evidence suppressed or acquittal. That strategy may, now, turn out to be a $11.25 million gamble.

    55. Triumph
      August 12, 2010 at

      Someone pointed out that in a “saner” world that the NHLPA would be arguing the NHL’s position. So I ask why is it seen as automatic that the NHLPA wanted to win this case.

      If we break down who would want what, I think a small majority of NHL clubs (say 20) would want this contract deemed void, and an overwhelming majority of the NHLPA (95+%) also wanting these contracts rejected (especially hypothetical 50 year contracts and the like). So with the interests of both parties actually somewhat aligned, why is the decision of an arbitrator in favour of those interests so surprising?

      while the contract robs a little from escrow, there’s little doubt that to the players on those particular teams, the minimal loss of salary is compensated for by the increase in prestige and visibility that cap-saving contracts can bring; going deep in the playoffs can bring on massive pay raises, whether deserved or undeserved, for even the lowliest participant. ask adam burish.

    56. Sens Fan
      August 12, 2010 at

      while the contract robs a little from escrow, there’s little doubt that to the players on those particular teams, the minimal loss of salary is compensated for by the increase in prestige and visibility that cap-saving contracts can bring; going deep in the playoffs can bring on massive pay raises, whether deserved or undeserved, for even the lowliest participant. ask adam burish.

      Sure, maybe a few players on NJ stand to benefit, but at the cost of players on every other team. I also think that most players consider the Escrow (which they immidiately see) as far more important.

    57. August 12, 2010 at

      Someone pointed out that in a “saner” world that the NHLPA would be arguing the NHL’s position. So I ask why is it seen as automatic that the NHLPA wanted to win this case.

      That was me. The NHLPA’s performance in this whole thing certainly raises the possibility that they didn’t actually want to win this case, that appears to be more of an indication of their general incompetence rather than a sign of some hidden agenda. I think we know they wanted to win because:

      1) The PA has always cared about its stars more than its grunts, and this is probably for good reason. The stars drive the league and are the irreplaceable commodities. When a group of stars made it known they were ready to end the lockout, Linden and Saskin folded quickly and quietly.

      2) This issue is going to be used as a bargaining chip in the upcoming negotiations. An NHLPA win in this arbitration would have given them an additional bullet to try and extract some other gain in negotiations. I think both sides understood that this ambiguity – I refuse to call it a “loophole” – was going to be resolved in the next CBA. Now, the NHL has to give up less of something going forward since Bloch has apparently de facto written it into the CBA. Paul Kelly was very adamant last summer about fighting any NHL challenges to these types of deals, and I think this is why. Obviously he knew that these deals were increasing escrow. But in the context of CBA negotiations, it’s an important chip the PA could have played. Now, not as much.

    58. Jon K
      August 12, 2010 at

      The other John: With respect, I think that Khabibulin is entitled to challenge the government’s ability to prove a) the constitutionality of his arrest and b) his guilt beyond a reasonable doubt.

      Are you suggesting he should have just entered a plea of guilty in order to get to training camp on time? If that’s the case I suppose we’ll just have to agree to disagree.

    59. The Other John
      August 12, 2010 at

      Jon K

      You are absolutely right. If he is innocent he should NEVER EVER rush to plead guilty. Leaving that very quaint possibility aside, lets deal with what did happen.

      If I did what he did, and was in his position
      (most importantly I had 3 years remaining on a $3.75 million dollar contract that has a morals clause and availability requirments in it)), I would have sat down and instructed my lawyer that I, firstly, want to get off on this charge.

      That part of the equation is really really easy.

      The tough part is when that ain’t gonna happen, the second part of my instructions to my lawyer kick in. If no plea deal is possible, and you can’t think of any other constitutional arguments to advance(discrimation of Ukrainians under the Civil Rights Act) and I am going to trial…. get me to trial early in the summer of 2010 or (if your delay strategy is working superbly) 2011.

      Just do NOT get me convicted and sentenced in say………..early September of either year

      Clearly the second portion of the above discussion never took place or Khabibulin would not be at risk of a conviction, incarceratioon and his employer having potential grounds for voiding his contract due to his conviction and unavailability to fulfill the terms of his contract.

      Lastly, if I was the prosecuting attorney and Khabibulin’s attorney brought the motion to suppress the evidence on a somewhat dubious factual foundation, I would not give him the opportunity for a plea to a lesser and included offense.

      But thats just me!

    60. ikcotyck
      August 13, 2010 at

      I noticed someone mentioning something about the PA lawyers being there for the drafting of the CBA. It’s also possible they hired outside counsel for this job, which they occasionally do, as they have a relatively small legal staff. In addition, their go-to lawyer for these kind of arbitrations, as you probably all know, has been booted out (Ian Penny).

    61. Vic Ferrari
      August 13, 2010 at

      Thanks Tyler. That obviously crushes my argument.

      I don’t think I agree with Rajeev that these types of contracts were easily foreseen. Hundreds of sharp lawyers read the CBA after it was released. Bloggers and blog commenters, many of whom read and comment here. I don’t recall anyone predicting this eventuality. Perhaps I missed it.

      Some time ago I remember you saying that a constitution is not a suicide pact, perhaps this is out of context, but surely the same applies to a labour agreement.

      From the NHLPA’s point of view, with the league payroll tied directly to hockey related revenue, there isn’t much they can do to increase the total amount of dollars going to the players.

      One way is to get teams to sign bad, long term contracts. Then have the teams buy out the contracts, play the guy in the AHL, or coerce him to come down with a phantom debilitating injury and have him retire.

      But a contract with as thin a tail as Kovy’s doesn’t help their cause. Not that I can see.

      One thing that blows me away about this CBA is the complete lack of a partnership. There was plenty of talk about a partnership in he rhetoric, but none in the document. I was hoping the NHPLA would have 10 board of governor votes, or similar. 25% at least.

      I would trust the NHLPA as stewards of the game a hundred times more than the owners.

      I still have no idea why Paul Kelly was axed, either. He expressed a similar sentiment. If the current NHLPA thinks that HRR-payroll linkage will be dropped in the next CBA … they’ve been smoking the drapes.

      If you’re tied to HRR, you’d better have some input to it. And sensibly a chunk of the non-HRR needs to be on the table, otherwise profitable, revenue sharing payers like the Oilers have a much greater incentive to increase non-HRR by extorting local and regional governments. This focus comes at the expense of energy and resources being used to increase team and league HRR.

    62. August 14, 2010 at

      I remember thinking we’d see this eventuality when Briere’s deal was signed. That was I think the first one to really tail off and set the table for all the others.

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