Marian Hossa Contract in Question?

It has been pointed out, at length, on Tuesday that the NHL has continued to investigate a number of lengthy contracts written in the past couple seasons to veteran stars. This issue was brought to a head in the footnotes of the arbitrator’s ruling that confirmed the league’s rejection of Ilya Kovalchuk’s 17-year contract with the New Jersey Devils.

On the 19th page (of 20), the following footnote is included in the ruling:

It is true, as the Association observes, that the NHL has registered contracts with structures similar to the Kovalchuk SPC PA Exh. 8 reflects a list of 11 multi-year agreements, all of which involve players in their mid to late 30’s and early 40’s. Most of them reflect reasonably substantial “diveback” (salary reductions that extend over the “tails” of the Agreement). Of these, four such agreements, with players Chris Pronger, Marc Savard, Roberto Luongo, and Marian Hossa reflect provisions that are relatively more dramatic than the others. Each of these players will be 40 or over at the end of the contract term and each contract includes dramatic divebacks. Pronger’s annual salary, for example, drops from $4,000,000 to $525,000 at the point he is earning almost 97% of the total $34,450,000 salary. Roberto Luongo, with Vancouver, has a 12-year agreement that will end when he is 43. After averaging some $7,000,000 per year for the first 9 years of the Agreement, Luongo will receive an average of about 1.2 million during his last 3 years, amounting to some 5.7% of the total compensation during that time period. The apparent purpose of this evidence is to suggest that the League’s concern is late blooming and/or inconsistent. Several responses are in order: First, while the contracts have, in fact, been registered, their structure has not escaped League notice: those SPCs are being investigated currently with at least the possibility of a subsequent withdrawal of the registration. It is also the case that the figures in Kovalchuk’s case are demonstrably more dramatic, including a 17-year term length, a $102,000,000 salary total and precipitous drop that lasts for the final six years of this contract.

The Cup happened.

Clearly the name of Blackhawks’ forward Marian Hossa is included in this short list of questionable contracts; it’s in bold to help Hawks fans find it.

Reading further in the footnote, the arbitrator indicates that, even though these deals were initially registered with the league, they have remained part of an open investigation that could ultimately result in the league seeking the withdrawal of said registration. The cliff notes: if the league wants, they could pursue similar action with these contracts as they successfully used to void Kovalchuk’s contract.

However, after all of these players have already participated in a season (with two of the listed named competing for last season’s championship), what good could the league acccomplish by removing the registration of these four contracts? Are they going to list the Blackhawks Stanley Cup victory with an asterisk? No, they can’t, won’t, and wouldn’t dare.

The concern of the arbitrator in the case against Kovalchuk was two-fold: first, the size of the drop-off from the cap number to the so-called retirement seasons at the end, and secondly the length of the deal. As you can see from the footnote above, the arbitrator indicates that the grounds for supporting the termination of Kovalchuk’s deal with New Jersey is supported by his deal being so much longer than the others, with a bigger dropoff.

Here are some numbers, courtesy of CapGeek.com, that should help Blackhawks fans something to think about. Below are the ten biggest differentials between a player’s cap number and the final years in the deal.

  1. Vincent Lacavalier, Tampa Bay – $6.7M
  2. Henrik Zetterberg, Detroit – $5.0M
  3. Danny Briere, Philadelphia – $4.5M
  4. Chris Pronger, Philadelphia – $4.3M
  5. Mikka Kiprusoff, Calgary - $4.3M
  6. Roberto Luongo, Vancouver – $4.3M
  7. Marian Hossa, Chicago – $4.2M
  8. Duncan Keith, Chicago – $4.0M
  9. Daniel Alfredson, Ottawa – $3.8M
  10. Marc Savard, Boston - $3.4M

Yes, that’s right. Two of the ten biggest differentials belong to current members of the Chicago Blackhawks, and both deals were signed within the last 14 months. While Keith’s deal has not been mentioned in any reported investigations, Hossa’s deal has been in question since late last summer and appears to be an ongoing issue with the league.

Hossa should be back in Chicago.

Reality is that the NHL cannot re-write history. The Blackhawks won the 2010 Stanley Cup, and both Keith and Hossa were part of the party. That will never change. The other reality is that the league cannot void these contracts at this point.

If the NHL decides the Blackhawks contract with Hossa is void, can the Hawks bring back Kris Versteeg and Andrew Ladd as compensation? If the Hawks had the $5.4M in cap space by deleting Hossa’s deal, they likely wouldn’t have moved some of their young players this summer. But it’s now the middle of August, free agency for this offseason has nearly come to an end, and teams have made moves within their framework of their existing salary cap situation. To void a contract, or even issue a substantial fine (in this case, possibly as big as $5M against the cap), the league would be not only contradicting themselves, but acting in the worst interests of the game by handicapping franchises.

That cannot happen.

If the league is going to pursue disciplinary action against the Flyers, Canucks, Blackhawks, Lightning, Bruins or anyone else, the penalties would likely be rolled into next season. Whether it’s in the form of a monetary penalty or the loss of draft picks, anything the league did would have to look forward to the 2011-12 season because of where this action is taking place on the calendar.

And don’t think for one second that Gary Bettman wants to look a gift horse in the mouth. The Blackhawks are one of the best revenue-generating teams in the league, and will be an even bigger draw as they defend their Cup. The team can suffer through their own, self-imposed issues with respect to the cap, but for the league to throw them under the bus could turn off one of, if not the most electric fan bases in the sport just as the team has won their city back.

The other point to consider is that the current Collective Bargaining Agreement was extended for only two more years, or until after the 2011-12 season. The league will benefit from this ruling as they begin negotiating a new CBA with a players’ association that currently doesn’t have a leader. However, former MLB players’ advocate Donald Fehr has been active with the NHLPA in the last few months and could, if granted a formal leadership position, make this situation more cloudy moving forward. Hockey cannot afford another work stoppage.

This ruling gives the league ammunition to use in future negotiations with the players. If the league uses Kovalchuk alone as an example, this ruling will be nothing more than a serious bargaining chip for the league. However, if the league decides to take action against other veteran players like Hossa, Pronger and Luongo, the league could start a fight they don’t want.

Blackhawks fans should be concerned about the possibilities brought up by this ruling, but should have some sense of perspective with their fears. The league can’t afford to screw their fans again.

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One Response to Marian Hossa Contract in Question?

  1. Matt says:

    The NHL is playing with fire at this point. Getting the ruling in their favor in the Kovy case is a valuable asset to bank when re-negotiating the CBA. To extend that skepticism to Hossa is over-reaching and misguided. The Hossa contract may indeed circumvent the cap, but not anywhere near the degree the Kovy contract did. The NHL needs to realize its time to quite while they’re ahead.

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