The ethics of NHL cap circumvention

September 15th, 2010 § 0 comments

On July 19, 2010, the NJ Devils announced the re-signing of Ilya Kovalchuk to a monstrous $102 million, 17-year deal, and thus the Kovalchuk Saga began.

Now, I am no expert on the collective bargaining agreement (CBA) and only quickly educated myself about cap circumvention for the purposes of this post.

Ilya Kovalchuk

During my TOK course in the IB program in high school, we defined ethical issues as basically violating a legal or established set of rules. In this case, the ethical issue was the length of the contract, but more importantly, how the length affected the average cap hit of Kovalchuk. The contract was “front-loaded” with the first few years paying Kovie $11.5m, $10.5m, $8.5m and so on, and only $505,000 in the last 5 years of the contract, for an average cap hit of $6m over the 17 years (which would put him at age 44). Obviously Kovie would not play to that age, so many (including the league) saw the final 5 years as “tacked on” solely to lower the average cap hit, which is known as cap circumvention (the main ethical issue).

As we know, the league rejected the contract and renegotiated a new one with the NHLPA/NJ, and a new “Kovalchuk Amendment” was added that stated players’ cap hits must be $1m from ages 36-40 if their average hit is $5.75m+ (like Kovalchuk). The NJ Devils were also fined $3m and 2 draft picks for the attempted circumvention. In this day where lifetime contracts are seemingly becoming the norm, I think it was good of the league to actually set precedent and enforce their CBA with the initial rejection, but the fine seems a bit overboard.

I’m just glad they didn’t reassess Luongo’s contract in the end – I don’t think we could handle another 1.5-month long saga.

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