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Arbitrator rules in favour of NHL on Kovalchuk's contract

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The Canadian Press
8/9/2010 7:33:00 PM
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It's back to the drawing board for Ilya Kovalchuk and the New Jersey Devils.

The two sides started discussing a restructured contract on Monday night, just hours after arbitrator Richard Bloch ruled in favour of the NHL's rejection of their original 17-year, US$102-million deal.

After reviewing Bloch's decision, the Devils released a statement saying they respected it. The team also indicated it still hopes to have the talented Russian winger in its lineup next season.

"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," said Devils president and general manager Lou Lamoriello.

In the meantime, Kovalchuk is an unrestricted free agent for the second time this summer -- leaving open the possibility the Los Angeles Kings or Russian-based SKA St. Petersburg could make renewed pitches for his services.

It remains to be seen what kind of overall affect Bloch's decision might have on the league. While the NHL has long been displeased with lengthy front-end-loaded contracts, the Kovalchuk deal was the first one it decided to challenge.

Philadelphia Flyers defenceman Chris Pronger, Vancouver Canucks goaltender Roberto Luongo, Chicago Blackhawks winger Marian Hossa and Boston Bruins centre Marc Savard are among a long list of players who have signed long-term deals that included extra years with diminished salary.

In making his ruling on Kovalchuk, Bloch concluded that "this contract is 'intended to, or has the effect' of defeating or circumventing the salary cap provisions of the CBA (collective bargaining agreement)."

The NHL came to a similar conclusion when it originally decided not to approve the Kovalchuk deal on July 20. It felt the Devils went too far in giving the 27-year-old a contract that would pay $95 million over the first 10 years, but only $7 million over the final seven -- reducing the cost against the salary cap to a relatively modest $6 million per year.

The NHL Players' Association filed a grievance disputing the league's position and Bloch oversaw two days of hearings in Boston before making his decision.

"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 NHLPA said in a statement that it was "disappointed" and continued to review the decision.

Tapered contracts arose after a salary cap was instituted following the lockout that wiped out the 2004-05 season. Next season's cap is $59.4 million per team.

Kovalchuk's deal was slated to pay $6 million in each of the next two seasons, jump to $11.5 million for five seasons, and then drop to $10.5 million, $8.5 million, $6.5 million and $3.5 million for one year each before slowing to $750,000 for 2021-22 and then $550,00 through to 2027.

One of the issues highlighted by Bloch was the fact that Kovalchuk would be under contract until his 44th birthday -- well past retirement age for most players.

"The overall structure of this (contract) reflects not so much the hope that Mr. Kovalchuk will be playing in those advanced years, but rather the expectation that he will not," Bloch wrote.

The contract would also have been the longest in league history at 17 seasons. In length, that tops Rick DiPietro's 15-year-deal with the New York Islanders and Alex Ovechkin's 13-year-deal with the Washington Capitals.

Kovalchuk was the biggest name among this summer's free-agent class, having scored 40 or more goals in six consecutive seasons. He finished last season in New Jersey after turning down a $101-million, 12-year extension from the Atlanta Thrashers in February and subsequently being traded.

Atlanta originally selected him with the first overall draft pick in 2001. He has 338 goals and 304 assists in 621 career NHL games -- including 41 goals and 44 assists last season.

Ilya Kovalchuk (Photo: Getty Images)

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(Photo: Getty Images)
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