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Articles and Opinions
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Written by Matthew Coller
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Friday, 01 October 2010 20:34 |
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The Summer of Kovalchuk ended with a “fair” contract for Ilya, a ridiculous penalty imposed on the Devils and the NHL with new restrictions on long-term deals. All’s well that ends well (unless you are the Devils or anyone who covered this mess). The words “circumventing the cap” were pounded into our collective brains as bad. The league sent a message to NHL executives to play nice or lose draft picks.
If the league thought it tied up all the loose cap circumventing ends, they were wrong. Just weeks after the Devils were penalized, the Chicago Blackhawks opened up nearly $6 million of cap space by loaning goalie Christobal Huet to Switzerland. Huet was benched midway through last season for poor performance, leaving the ‘Hawks with a replacement level goalie with superstar salary. Shipping Huet across seas to get around his cap hit or, say, circumvent the salary cap, was no different than the Devils’ attempt to sign Ilya Kovalchuk to a 50-year contract.
The Blackhawks aren’t the only club using any means possible to erase their bad decisions. The New York Rangers dug an AHL sized hole and tosses Wade Redden’s $6.5 million cap hit in it. The Toronto Maple Leafs’ GM Brian Burke told SportingNews that since these types of moves aren’t against the Collective Bargaining Agreement, there is nothing wrong with them. Sound familiar?
The SportingNews story notes that agents will be taking action on future big money contracts to include no-movement clauses to ensure teams don’t bury their clients in the AHL or send them to Prog.
Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be followed on Twitter
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Written by Matthew Coller
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Tuesday, 14 September 2010 00:49 |
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Maybe they’d sound like 10-year olds, but if the Devils were to cry “no fair” on the NHL, who could blame them? The NHL poured salt in the wound of the New Jersey Devils by fining the team for attempting a legal contract that they already rejected (source: NHL.com). The Devils’ attempted to sign Ilya Kovalchuk to a 17-year, $102 million contract this summer, but were turned down by the league. They tried again, got the deal accepted but now face a $3 million fine and the loss of a first and third round pick as punishment for their legal contract.
The NHL is sending a clear message to teams who try to sign free agents to long-term, front-loaded contracts. As we’ve followed all summer, similar long-term, front-loaded deals to stars such as Chris Pronger and Marian Hossa went unpunished by the league, even after they investigated and decided on new guidelines.
The Blackhawks and Flyers (among others) were grandfathered in despite breaking the rules that didn’t exist. Long-term, front-loaded deals were allowed according to the Collective Bargaining Agreement due to a loophole that took the average salary across the length of a contract as the team’s cap hit.
It seems rejecting the contract and forcing the team to re-work the deal was punishment enough. It forced the Devils to work around a bigger cap hit, throwing a wrench in their cap blueprint for the next, say, 17 years or so. But, the NHL elected to punish the team twice for the same crime (which, again, wasn’t actually illegal to begin with).
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Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be followed on Twitter
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Written by Matthew Coller
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Monday, 06 September 2010 01:01 |
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I know what you’re thinking: “Whew! It’s finally over.” Yes, the summer-long saga that was superstar forward Ilya Kovalchuk’s contract has come to an end. But, the NHL’s approval of the agreement between the New Jersey Devils and Kovalchuk worth $100 million over 15 years did not come without caveat.
The old system of determining cap hit was to take the average salary throughout the duration of the contract. Just reading those words you can see what NHL officials didn’t: teams will sign long-term deals to reduce cap hits. And, though there was nothing in the Collective Bargaining Agreement against the original 17-year, $102 million deal, the NHL rejected it and had their rejection upheld.
As we know, Kovy and the Devils aren’t the first to give this a go. The Chicago Blackhawks’ forward Marian Hossa, the Vancouver Canucks’ goalie Roberto Luongo and the Boston Bruins’ forward Marc Savard all signed deals they never intended on playing out.
After the rejection of Kovalchuk’s first deal, we thought it would have two effects: ending future long-term, front-loaded deals and putting those of Hossa, Luongo etc. in jeopardy. It had neither effect. First, the Hossa-like deals will be grandfathered in. Second, When the NHL finally approved the new 15-year, $100 million deal, they came out with new guidelines for long-term deals. Those guidelines according to the Associated Press are:
The compensation for all seasons that do not include or succeed the player’s 41st birthday will be totaled and divided by the number of those seasons to determine the annual average value. In all subsequent seasons, the team’s cap charge will be the actual compensation paid to the player in either that season or seasons.
For any long-term contract that averages more than $5.75 million for the three highest-compensation seasons, the salary cap value for any season in which the player is age 36, 37, 38, 39 and/or 40 shall be a minimum of $1 million.
Considering Kovalchuk’s contract was only different by two years and $2 million, it’s hard to see those rules doing a whole lot of deterring of front-loaded long-term deals for players pre-30, but post-30 players may have it tough. We’ll use two 2011 free agents as examples to demonstrate how the new rules affect superstars:
D Zdeno Chara – 33-years old – Chara may have taken the biggest hit. Chara is currently is making $7.5 million. Under the old system, he could have signed a deal that would have taken him into his mid-40s and topped out in the $10 million range in the first few years of the deal. Now, the Bruins won’t bother to sign him past 40, they’ll likely take him to 40 with a 6-year deal at $1 million for the final year or two of the deal. Six years isn’t bad for a current 33-year old, but since the team can’t stretch the deal out to lower the cap hit, he’s not going to see quite the pay day as he would have before.
F Alexander Semin – 26-years old – Semin may not be seen as quite the caliber of Kovalchuk, but he already makes $6 million and will be looking to be locked up for life. Whatever team signs Semin will stick to signing him until the age of 40 as it is no longer beneficial to sign past that age. That leaves said team with 13 years. If you sign him for the minimum final four years of $1 million, he could easily sign for $100 million and make $96 of that in the first nine years. That would make his salary in the first nine years at $10.7 million but cap hit in the $7.7 million range. I’m not saying Semin is worth $100 million over 13 years, but you can see how teams can still reduce their cap hit but not by as much.
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Matthew Coller is a senior staff member of the Business of Sports Network, and is a freelance writer. He can be followed on Twitter
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Written by Matthew Coller
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Wednesday, 01 September 2010 03:07 |
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June 17, 2010: Ice Edge Holdings “met the proof of financing deadline set by the city of Glendale as part of the investment group’s effort to buy the Phoenix Coyotes hockey team,” according to the Phoenix Business Journal.
And just when we thought it was over….
June 30 the NHL fired team president Doug Moss. If the team’s sale was on course, then you’d think the league would have let Ice Edge Holdings fire the president. Red flags, anyone? Especially after Ice Edge CEO Anthony LeBlanc said he liked Moss’s work.
Then, in late July, the city of Glendale said Ice Edge no longer had exclusive negotiating rights. What happened in between, nobody seems to know. The city paid for the arena (Jobing.com arena) and paid $25 million to cover the Coyotes losses.
The deadline for the city of Glendale is Dec. 31 to get the team sold. Here in late August, enter: Mystery Buyer. The city’s efforts to sell the team have already been deplorable at best, now they won’t say who the next owner will be. Those who paid $25 million in debts to the NHL to keep the team must be thrilled that Owner X will save the franchise.
Here’s a snip from Phoenix Business Journal today:
“Details of the new ownership group are very limited, though Glendale and the NHL could announce details and developments soon, according to sources familiar with the situation. The ownership group has asked for the city and league to keep negotiations private. The new buyer would keep the Coyotes in Glendale and is not a household name. In addition, sources say progress on the purchase is serious and substantial.”
Since Ice Edge is now focusing on an ECHL club, the mystery person/people are on their own. One can’t help but think, if the team had only gone with Chicago sports mogul Jerry Reinsdorf from the beginning, they’d be under solid ownership by now. But, Reinsdorf wanted an out clause (and who can blame them). It’s hard to think the Coyotes will stay in Glendale. They’ll more likely end up with a city in debt and an arena being used for juniors tournaments.
Matthew Coller is a senior staff member of the Business of Sports Network, and is a freelance writer. He can be followed on Twitter
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Written by Matthew Coller
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Friday, 27 August 2010 20:18 |
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During Donald Fehr’s tenure as MLBPA head, the average player’s salary went from $330,000 to more than $2 million. The minimum salary went from $40,000 to $200,000. According to Roger I. Abrams' Legal Bases: Baseball and the Law, it took more than 25 years of free agency for the players' percentage of baseball revenues to return to the amount they kept in the 1870s.
These types of accomplishments are exactly why the NHLPA has named Fehr as its new executive director, according to an AOL Fanhouse report (though the NHLPA has yet to confirm). In late June, The Hockey News’ Ken Campbell discussed the Fehr Effect , he wrote:
“First, he essentially had the agents eating out of his hand when he addressed them in March. Then he blew away the executive committee – which consists of each of the 30 player representatives and holds the balance of power – in urging the players to approve the five percent growth factor for next season’s salary cap and to extend the current CBA to the summer of 2012. He was also on hand when the league’s competition committee met recently to discuss head shots and was – to his credit – completely silent. One person who attended the meeting said it was the first time it seemed the players were free to speak in their own interests instead of acting as extensions of the NHLPA.”
NHL deputy commissioner Bill Daly asks us to keep our eyes on the ultimate prize of avoiding a work stoppage,
"Look, I'm not looking forward to Armageddon, that's for sure," said Daly. "The sport will be well served by dealing with its issues in a reasonable, insightful way, through the negotiation process, and that's what we're looking to do."
Clearly, leadership is going to be an important step forward," said Daly. "They've been without a leader and working by committee for a year. Clearly, it's not as quick, efficient and effective as it otherwise might be. We're looking forward to that decision being made and that position being filled."
Either way, a man as smart and talented as Fehr must understand the importance of avoiding a stoppage, we can only hope that all involved find a way. Biz of Hockey will be watching NHLPA developments closely as we approach the end of the CBA agreement in Sept. 2012.
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Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be contacted at
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Written by Matthew Coller
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Tuesday, 24 August 2010 22:41 |
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 The President of the United States wore FDNY on his cap. The way we viewed the people who work every day to make our lives safer changed. We no longer took firemen, police and ambulance workers for granted. On Sept. 11, 2001, we learned what a hero really is.
That day, John Feal lost half of his foot. Thousands of pounds of steel crashed down, leaving Feal in the hospital for months. He beat gangrene and won the battle for his life, but was thrown into financial warfare. He defeated that too, but knew many of his fellow injured responders were on the same battlefield. So, Feal decided to help. He started the Fealgood Foundation to provide financial assistance to 9/11 responders and their families.
“I started out selling T-shirts over the internet,” Feal said in a gruff Long Island accent. “I have raised over $250,000, which sounds like a lot, but it really isn’t when you think about these people’s needs."
Feal’s plan extends beyond giving away money, the Fealgood Foundation lives up to its name. The foundation teamed up with the New York Islanders' “Charity of the Game” program to send struggling 9/11 responders to an Islanders game for free.
“These people are forever part of a fraternity,” Feal said. “9/11 responders need one day of not worrying about how their going to pay their bills. It (the Islanders game) gives them a chance to enjoy their family and enjoy each other.”
 The Islanders began “Charity of the Game” four years ago with a handful of charities, they now have 41 - one for each home game. The team sells hundreds of tickets at a 45 percent discount, then the charity elects to either sell the tickets as a fundraiser or, as Feal did, give them to those they assist.
“You know, 9/11 didn’t end that day,” Feal said. “More than 7,000 responders are still being treated. Some have died. We have between eight and 12 widows (who are assisted by Fealgood Foundation), these people are still struggling. We gave gas cards to some people so they could afford to drive to the game.”
Fealgood Foundation raised near $2,000 during the game with a 50/50 raffle, were featured on the Jumbotron and Feal was given stick signed by Islanders’ players to auction off.
Stories like Feal’s happen every night at Nassau Coliseum. The Islanders employ a 12 person team to handle sales and create a unique experience for each charity.
“Each charity tells their own story every day, “director of group sales Rose Barre said. “While these charities bring their organizations out to support the Islanders, our goal is to help them continue to tell their story through our Charity of the Game program. We tailor each program to fit their mission.”
The standard package includes a concourse table to promote the featured organization, the Islanders community Events Tour (ICE) at an event upon request, a formed partnership to ensure the charity receive donation items.
Other charities who partake in “Charity of the Game” include Autism Speaks, Musella Foundation, Wounded Warriors, Chabad of West Hempstead, American Red Cross, Knights of Columbus, Fealgood Foundation, Histiocytosis Foundaiton and the John Theissen Foundation.
“Each of the charities motives differ,” Barre said. “Some will purchase the tickets as a way to provide an opportunity to their families. This supports the Fealgood Foundation's mission. Some organizations enjoy the exclusive Charity of the Game partnership and exposure with the Islanders.”
The tickets, the hot dogs and rooting hard for "the beloved Islanders," Feal says, is what was most important to his organization.
“I would never sell those tickets, I don’t really know about the recognition we got from it and we didn’t earn a ton of money or anything like that, but I know I would never take that away," Feal said. "I’ve gone to a lot of funerals and held a man’s hand while he died, trust me every one of them is a hero.”
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Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be contacted at
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Written by Matthew Coller
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Wednesday, 11 August 2010 02:56 |
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Yesterday, arbitrator Richard Bloch ruled that the NHL’s rejection of Ilya Kovalchuk’s 17-year, $102 million front-loaded contract will be upheld. NHL Deputy Commissioner Bill Daly released this statement:
“We want to thank Arbitrator Bloch for his prompt resolution of a complex issue. 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.”
Storyline 1: So, now what? Well, the NHL can fine the New Jersey Devils up to $5 million and punish them via taking away draft picks, but that is unlikely. They can also fine Kovalchuk, but neither of those options would make much sense.
Storyline 2: How will this affect future contracts? Plenty of super-stars are unrestricted free agents after next season including Joe Thornton, Zdeno Chara and Zach Parise. The Kovalchuk decision means these guys will have to play by the rules. What is unclear is what those rules are. General managers will want to sign these big-name players to long term contracts, but now the ambiguity begins. How long-term is too long-term, how front-loaded is too front-loaded? Are we going to end up with 10 contracts going in front of an arbiter next off-season? The can of worms is officially opened.
Storyline 3: Did the NHLPA blow this on purpose? This one might have been like missing a 3-foot gimme put so you don’t beat your boss. There could be several lines of thinking here: A. If we let the NHL have this one, they’ll be easier to deal with come CBA time. B. If we win this, several players are going to take a ton of money away from average players. The NHLPA released a statement today saying they were disappointed and had no further comment. Doesn't sound that riled up to me.
Storyline 4: Will the Devils still sign Kovalchuk? USA Today reported that Devils GM Lou Lamoriello said the team will “do everything possible” to sign Kovy. That could be pretty tough because the Devils only have $3.7 million in cap space according to CapGeek.com.
Storyline 5: Will the NHL overrule other long-term front-loaded deals? ProHockey Talk reported that NHL Senior VP of public relations Gary Meagher confirmed that the league is “looking at” the long-term contracts of Marian Hossa, Chris Pronger, Roberto Loungo and Marc Savard. The Bruins and Canucks said they would cooperate, but the flyers were not so thrilled, saying that Pronger’s contract is structured differently and is compliant. If anything is clear, it’s that things are about to get hairy.
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Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be contacted at
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Written by Matthew Coller
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Monday, 09 August 2010 15:15 |
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David Haugh of the Chicago Tribune wrote this week that the Chicago Blackhawks planned all along to sell off players after the 2009-10 season and transfer the cap hit of bonuses awarded to Jonathan Toews and Patrick Kane on to next season. "Perceptions are, 'Geez, the Blackhawks mismanaged the salary cap, but I'd say we did the opposite — we managed the hell out of it,'' Bowman told the Tribune. "We exploited it in a way.''
To channel my inner Joe Pesci: exploited how? The Blackhawks knew all along they would have been at least $10 million over the 2010-11 cap, so Bowman chose gamble, knowing he’d have to trade players such as Dustin Byfuglien and Kris Versteeg immediately after the cup was raised. Fortunately for Bowman, Byfuglien and Versteeg were the ones doing the raising.
But Bowman’s plan goes deeper than a post-season fire sale. The GM battled with the agents of stars Toews, Kane and Duncan Keith over nickels and dimes in negotiating long-term deals for all three. Eventually the deals were all worked out and announced on Dec. 3, 2009.
As Bowman carefully carved up the cap, the Blackhawks’ coach Joel Quenneville was left in the dark. "I didn't want to take away any focus from Joel's job, which he did masterfully," Bowman said. "Then when it was time to bring him into it, he was understanding."
We’re not sure how understanding Quenneville was when the ‘Hawks walked away from an arbitration ruling to re-sign cup-winning goalie Antti Niemi. But options were limited, partially due to the San Jose Sharks. Sharks’ GM Doug Wilson offered restricted free-agent defenseman Niklas Hjalmarsson a four-year, $14 million offer sheet which forced Bowman to commit $3.5 million to Hjalmarsson one year before he planned. Wilson claimed he was trying to replace Rob Blake, but Bowman suspected the Sharks of forcing Chicago into a decision between the young defenseman and Niemi.
Bowman isn’t out of the woods yet. He’s filled most of the open spots, but will still have to deal with ridiculous Christobal Huet and Brian Campbell contracts.
"People ask are you enjoying the Cup?" Bowman said. "In time I will. But because of all we've had to do, I haven't really enjoyed it, per se. Ever since we went back to work that following Monday, it has been a mad dash."
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Matthew Coller is a staff member of the Business of Sports Network, and is a freelance writer. He can be contacted at
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