Let’s Make Fun Of Stupid Objections To The 17-Year Kovalchuk Deal

[UPDATE 7/21: The NHL has tentatively rejected this contract, bringing up a whole new mess of issues. Regardless, here’s what I wrote before we learned the NHL was able to do that]

After a lengthy negotiating process, Ilya Kovalchuk has indeed signed a 17-year, $102 million contract with the New Jersey Devils. The length appears striking at first, but the last five years of the deal are all worth $550,000, and $750,000 in the year before that, so in essence, Lou Lamoriello has jumped on the Marian Hossa / Chris Pronger / Henrik Zetterberg bandwagon and taken advantage of the salary cap by dragging Kovalchuk’s average annual cap hit down to just $6 mil with dummy years at the end of the deal that he’ll almost assuredly buy out.

There may be a handful of tricky seasons in between Kovalchuk’s formative years and his inevitable buyout/retirement, but basically, Lamoriello has shrewdly taken advantage of an increasingly-exploited salary cap loophole to keep a bona fide superstar with his franchise at an exceedingly reasonable annual cap hit.

Still, that “17 years” just looks really, really crazy on paper, and it’s brought up a whole series of objections — some legitimate, but most just angrily uninformed — which Scott Burnside lays out in this somewhat-bewildering post. Let’s dissect the four oddest paragraphs:

Some will immediately draw a line between the Kovalchuk deal and the 15-year contract that made netminder Rick DiPietro and the New York Islanders the butt of jokes around the sporting world. Too much. Too long. Those were the prevailing comments in the wake of the much-anticipated signing.

They will? Then “Some” are stupid.

Burnside isn’t making this point himself, fortunately, just relaying the general implication that the Kovalchuk deal is comparable to the albatross the Islanders gave Rick DiPietro (I’m pretty sure they had him sign his name on a literal live albatross), which is completely unfounded. DiPietro’s deal earns him exactly $4.5 million in every year of his deal, for an annual cap hit of $4.5 million — the length of the deal wasn’t deliberately lengthened to drag the cap number down, the Islanders just wanted to lock up DiPietro for fifteen years.

The Kovalchuk deal, by contrast, was deliberately lengthened by the Devils so they could pad the end of the deal with $500k seasons, drag down the average annual cap hit of the contract, and pay Kovalchuk fair market value over the next decade without totally destroying their cap space, giving themselves the option to buy him out with 5-7 years left on the deal once most of the money has been paid and allow Kovalchuk to retire, sign a latter-day NHL contract, or finish his career in the KHL. It’s far more similar to the deal the Blackhawks gave Marian Hossa; the 17-year Kovalchuk deal appears oppressively long-term on paper, but it’s actually far less restrictive to the franchise than, say, a 7-year, $60 mil deal with a $9+ mil cap hit would’ve been.

The Devils will have an awkward decision to make when Kovalchuk turns 36 with 8 years remaining on the contract, about when to precisely buy out his deal — do they take a $6 mil cap hit at age 36, then buy out 7 years, or take another $6 mil hit at 37 and buy out 6 years, or wait further? — but these concerns won’t arise for nearly a decade when the cap will have increased and a new CBA may be in place, and the concerns aren’t nearly as suffocating to the Devils as a shorter-term deal with an $8-10 mil cap hit would have been.

Also, Rick DiPietro is an average goaltender (who’s constantly injured, though he wasn’t before the deal was signed), while Kovalchuk is a perennial 40-goal-superstar. These mysterious “Some” who are comparing the contracts because the number 17 is close to the number 15 are hopelessly uninformed.

Moving on…

Players have fled New Jersey at their first opportunity. Madden won a Cup in Chicago this spring. Gomez was part of a Montreal club that went to the Eastern Conference finals. Niedermayer led Anaheim to a Cup in the second season after the lockout. Free-agent defenseman Paul Martin signed with Pittsburgh last month rather than return to Lamoriello’s fold.

Well that’s just flat-out misleading. John Madden played for the Devils for 10 years before taking a one-year deal with Chicago at the age of 36 (for a hefty $2.75 mil), Gomez bolted for New York because the Rangers offered him an absurd 7-year, $51.5 mil deal worth $10 mil in its first year, a deal any player in their right mind would’ve taken no matter what city they were coming from, and Scott Niedermayer played in New Jersey for 13 years, won three Cups with the Devils, and left for Anaheim because he wanted to win a Cup with his brother, despite reportedly being offered more money by New Jersey and San Jose.

Martin did publicly say that Pittsburgh was his #1 choice and he turned down bigger offers to sign with the Pens, but this was as much an endorsement of the Pens’ current franchise as it was anything denouncing New Jersey, at least any more so than the unnamed other teams that offered Martin more money (I’m guessing Edmonton, Edmonton, and Edmonton).

The short history of these kinds of deals isn’t pretty. The Islanders are stuck with a broken-down DiPietro for more than a decade. Brian Campbell signed an eight-year deal with Chicago, and he’s now their fourth-best defenseman and one of the reasons GM Stan Bowman has had to jettison significant pieces of his Cup-winning roster.

Again, the Kovalchuk deal has nothing to do with the DiPietro deal or the Campbell deal. Brian Campbell is an above-average defenseman who the Blackhawks signed to an 8-year deal worth $7.14 million in each year of the deal, for an annual cap hit of exactly $7.14 million. Kovalchuk — a more valuable player than Campbell — will be worth an annual cap hit of just $6 mil precisely because of the years at the end of the contract, which re-affirms the shrewdness of Lamoriello’s decision to lengthen the deal. Assuming the Devils buy out Kovalchuk’s deal with 4-8 years remaining on it, they’ve essentially signed him to a deal of similar length to the oft-maligned deals of Campbell, Scott Gomez ($7.37 mil cap hit), Wade Redden ($6.5 mil cap hit), Chris Drury ($7.05 mil cap hit), and Danny Briere ($6.5 mil cap hit), for a smaller cap hit than any of those guys, and Kovalchuk is a much better hockey player than everyone on that list.

Nit-picky sidenote: Campbell is only the “third best defenseman” on Chicago because the Blackhawks happen to have three of the best defensemen in the NHL. Campbell’s still pretty good, though obviously overpaid.

Other nit-picky sidenote: As fun as it is to rip on the Islanders for the DiPietro deal, if he was healthy and playing decently, his $4.5 mil salary wouldn’t be suffocating, it would just be a standard, moderately high financial commitment. I don’t think anyone could have foreseen him contracting the 28 Days Later virus so soon into the deal.

If you’re a cynic, you might suggest Kovalchuk took the easy way out, signing a deal that (barring a buyout) precludes him from ever having to negotiate another NHL deal. Who among us wouldn’t want that kind of security? But does it naturally follow that such a deal blunts the will to win, the will to compete every night? Some GMs would say yes, but it doesn’t stop them from handing out career-length contracts as a way of keeping top assets or luring top free agents.

Huh? Again, I’m not picking on Burnside here, because he’s just relaying the general sentiments of many writers and team officials leaguewide, but nothing in this paragraph makes sense.

Kovalchuk took the “easy way out”? By signing the best contract he was offered? What should he have done, demanded a shorter deal for less money? The other reported deal on the table was the Kings’ 15-year, $80 mil offer — would he have been a martyr for taking the deal that only guaranteed him security until age 42 instead of taking the EASY WAY OUT and signing until age 44?

Dag nabbit, Ol’ Red Horner woulda been like “I’m too tough fer no wussy financial security for the rest of my life – I’ll BURN yer commie cash so I can TOUGHLY negotiate a TOUGH deal in mah mid-30s which is what this game is all about!”

For the record, Marian Hossa signed a 90-year contract with Chicago and won a Cup in the first year, against Mike Richards, who’s also on a 90-year contract. I don’t think either players’ will to win was crippled.

Overall, Lamoriello has indeed taken a risk and penned a deal of unconventional length that’s sure to confuse some people upon first glance, but this 17-year contract is a creative approach to simultaneously give Kovalchuk the money he was seeking while also not preventing the Devils from building a team around him. The trickiest part will be Lamoriello having to choose between overpaying Kovalchuk for a couple years in his late-thirties or buying him out a few years before the sub-million seasons on the contract kick in. As a GM, I’d rather face that dilemma any day than be in the same room as Wade Redden’s contract.


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One Response to “Let’s Make Fun Of Stupid Objections To The 17-Year Kovalchuk Deal”

  1. Chris Ross Says:

    Love the post, really enjoyed the read. It’s amazing how the GM’s keep giving these massive contracts to players. I know you want the player but isn’t there a point where you think enough is enough. 17 years is unbelievable, I thought it was like a typo or something when I read it at first. These players are very good players, but as they get older it’s going to pose a problem as their play declines. Also, you think you could check out my article relating to this? I really want to hear your thoughts http://chrisross91.wordpress.com/2010/07/20/note-to-nhl-gms-this-is-getting-out-of-hand/

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