Roberto Luongo's 12-year contract deal now under investigation Arbitrator voids Ilya Kovalchuk's 17-year contract with New Jersey; puts four other front-loaded deals in doubt By Elliott Pap, VANCOUVER SUN VANCOUVER The Ilya Kovalchuk ruling Monday could sweep up Vancouver Canuck goalie Roberto Luongo in its net. Arbitrator Richard Bloch, who threw out Kovalchuk's 17-year, $102 million frontloaded deal with the New Jersey Devils, also made reference in his ruling to four other long-term contracts: ones signed by Luongo, Philadelphia's Chris Pronger, Chicago's Marian Hossa and Boston's Marc Savard. The National Hockey League Players Association noted that since these four contracts had been approved "with structures similar" to the Kovalchuk deal, then Kovalchuk's deal with the Devils should also be approved. However, Bloch wrote: "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 [standard player's contracts] are being investigated currently with at least the possibility of a subsequent withdrawal of the registration." Canuck general manager Mike Gillis confirmed in an email to the Vancouver Sun Monday night that the league is indeed studying Luongo's 12-year, $64 million contract. instructions," Gillis said. "Cannot say anything further at this point." Luongo's deal, signed last September, begins this season and will pay him $10 million in 2010-11. In the final year, when he is 43, Luongo is scheduled to make just $1 million. The goaltender's cap hit over the 12 years is $5.33 million. In regards to Luongo's contract, Bloch wrote:"[luongo] 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 league had rejected Kovalchuk's 17-year deal, saying the longest deal in league history violated its salary cap. The NHL Players Association filed a grievance against the league. A hearing was held last week and arbiter Bloch sided with the league when he issued his ruling. The decision puts Kovalchuk back on the free agent market. The high-scoring Russian was hockey's biggest prize in free agency this year with 338 goals and 304 assists in 642 career games. "We want to thank arbitrator Bloch for his prompt resolution of a complex issue," NHL deputy commissioner Bill Daly said in a statement. "His ruling is consistent with the league's view of the manner in which the collective bargaining agreement should deal with contracts that circumvent the salary cap." The players' association said it was disappointed with the ruling, which it was reviewing. It had no further comment. New Jersey can be fined or lose draft picks for signing Kovalchuk to a contract that circumvented league rules. Kovalchuk and the Devils agreed to the deal July 19. The next day, the league determined the contract was illegal because years of low salary at the end lowered the cap hit. The union filed a grievance July 26. The all-star was slated to earn only $550,000 in each of the last five seasons of the rejected deal. It would have run through the 2026-27 season, when Kovalchuk will be 44. Kovalchuk had 41 goals and 44 assists last season, when he was traded to the Devils by Atlanta in February. The 27-year-old is the league's leading scorer since 2001 with 338 goals. REPORT: NHL LOOKING INTO LUONGO'S, OTHER FRONT LOADED DEALS TSN.CA STAFF Arbitrator Richard Bloch's ruling to side with the NHL on voiding Ilya Kovalchuk's contract on Monday could affect other such front-ended hockey contracts. Canucks general manager Mike Gillis confirmed to the Vancouver Sun via email late Monday night that the league is looking into Roberto Luongo's 12-year contract that was signed last fall. instructions," Gillis told The Sun. "Cannot say anything further at this point."
Bloch's ruling specifically mentioned the contracts of Luongo, Philadelphia Flyers defenceman Chris Pronger, Boston Bruins forward Marc Savard and Chicago Blackhawks forward Marian Hossa as deals that the league is still investigating. "Each of these players will be 40 or over at the end of the contract term and each contract includes dramatic divebacks," Bloch wrote in his ruling. "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 nine 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 NHL Players' Association argued that those four deals were approved and that Kovalchuk's deal should be approved as well. Bloch disagreed with that point, writing: "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 [standard player's contracts] are being investigated currently with at least the possibility of a subsequent withdrawal of the registration." Pronger, Luongo, Hossa and Savard are among a long list of players who have signed long-term deals that included extra years with diminished salary. League reviewing Luongo deal BY WEB STAFF sportsnet.ca Vancouver Canucks general manager Mike Gillis has confirmed that the league is taking another look at Roberto Luongo's 12-year, $64 million contract, according to a report by The Vancouver Sun. Gillis confirmed this action in an email to the Vancouver Sun Monday night. instructions," Gillis said. "Cannot say anything further at this point." Luongo's extension was signed last September and is set to begin this season. The contract is scheduled to pay him $10 million in 2010-11. In the final year, when he is
43, Luongo is scheduled to make just $1 million. The goaltender's cap hit over the 12 years is $5.33 million. Arbitrator Richard Bloch threw out Ilya Kovalchuk's 17-year, $102 million front-loaded deal with the New Jersey Devils on Monday. In the ruling, Bloch made reference in his ruling to four other long-term contracts: ones signed by Luongo, Philadelphia's Chris Pronger, Chicago's Marian Hossa and Boston's Marc Savard. Bloch wrote: "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 [standard player's contracts] are being investigated currently with at least the possibility of a subsequent withdrawal of the registration." Sportsnet's Nick Kypreos reported Monday that the NHLPA will file a grievance if the NHL decides to take action on any of these contracts. Report: Four NHL contracts under review By QMI Agency The hammer that fell on the New Jersey Devils and Ilya Kovalchuk regarding the sniper's voided 17-year contract with the team could deal blows to other NHL clubs with stars signed to similar deals. Vancouver Canucks general manager Mike Gillis has confirmed that the league is taking another look at netminder Roberto Luongo's 12-year, $64 million contract, according to a report by The Vancouver Sun. instructions," Gillis said. "Cannot say anything further at this point." The Canucks aren't alone. In arbitrator Richard Bloch's ruling favouring the NHL in the Kovalchuk case, Bloch apparently compares contracts belonging to Chris Pronger, Marc Savard and Marian Hossa to Kovalchuk's and suggests that the league is putting them under the microscope. "The apparent purpose of this evidence is to suggest that the league's concern is late blooming and/or inconsistent." Bloch wrote in his ruling. "Several responses are in order: First, while the contracts have, in fact, been registered, their structure has not escaped league notice: those SPCs (Standard Player Contracts) are being investigated currently with at least the possibility of a subsequent withdrawal of the registration."
Each of the above players will be 39 years old or over by the time their contracts expire, and their annual earnings drop significantly in the final years of their deals. Luongo, who signed his deal last September, is set to earn $57 million in the first eight years of his contract and only $7 million in the last four. The deal would see him play until the age of 43 with a cap hit of $5.33 million. Pronger's seven-year, $34.45 million contract with the Philadelphia Flyers, signed in July 2009, will earn him $33.4 million in the first five years and lasts until he is 41 with a cap hit of about $4.21 million. Savard signed with the Boston Bruins for seven years and $28.05 million this past December. At a cap hit just over $4 million, he'll make $25.5 million in the first four years of the deal which runs out when he's 39. Hossa joined the Chicago Blackhawks in July 2009 after signing a 12-year, $62.8 million contract with the club. He is due to make $59.3 million of it in the first eight years. The deal comes at a cap hit of just over $5.23 million and expires when he's 42. Bloch ruled in favour of the NHL voiding Kovalchuk's 17-year, $102 million contract with the Devils Monday. The deal, signed July 20, would have seen Kovalchuk earn $95 million in the first 10 years and $7 million over the last seven, resulting in a $6 million cap hit. He would have been 44 years old by the end of the deal in 2027. "We want to thank Arbitrator Bloch for his prompt resolution of a complex issue," NHL Deputy Commissioner Bill Daly said in a statement. "His ruling is consistent with the league's view of the manner in which the Collective Bargaining Agreement should deal with contracts that circumvent the salary cap." Devils president, CEO and general manager Lou Lamoriello also issued a statement in response to Bloch's decision. "We have reviewed and respect arbitrator Bloch's ruling in the Kovalchuk matter," Lamoriello said. "We also note and appreciate his finding that nothing in his opinion should be read as suggesting that either the club or Ilya Kovalchuk operated in bad faith or on the basis of any assumption other than that the Standard Player Contract was fully compliant with the CBA. That has been our consistent position throughout. "While we do not currently have a contract with Ilya Kovalchuk, discussions have resumed and we are hopeful that a contract will be reached that meets with the principles in arbitrator Bloch's award and the NHL's approval." As a result of the ruling, Kovalchuk is once again an unrestricted free agent and any team is able to sign him.
The fate of others remains to be seen.