NHL Investigating Contracts: What Does This Mean?

As everyone knows by now, the NHL arbitrator rejected Ilya Kovalchuk's 17-year contract making him a free agent once again.  A league statement said that the "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 main issue with the Kovalchuk deal is that he would earn $95 million dollars in the first 10 years of the contract and only $7 million over the last seven.  The length of the contract was also an issue.  It would have been the longest contract in NHL history.

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Now the league is looking into other contracts as well.  Late yesterday, Vancouver Canucks general manager Mike Gillis confirmed that the league is looking into Roberto Luongo's recently-signed 12-year contract as well.  Luongo signed the deal last year, but it only kicks in this season.  He played last year under his old contract.

The Luongo deal is set to pay out $64 million over 12 years: $10 million next season, $6.7 a year for the next seven, $3.3 in 2018-2019, $1.6 in 2019-2020 and just $1 million in each of the final two years of the deal.

The league is also going to look into other long-term deals that were signed recently including Chris Pronger's, Marc Savard's and Marian Hossa's.

So what does this mean?

Neither Pronger nor Savard have actually started their new deals yet.  They will begin being paid under their new contracts this coming season.  Technically the NHL could void the contracts of Luongo, Pronger and Savard just like they did Kovalchuk.  The players would become free agents and there would be no issue, other than the NHLPA being very upset.  Pronger's deal is a a 35+ contract, so his salary will count against the cap even if he retires.  This can't really be considered circumventing the cap, can it?

And what about Hossa?  He played last season under the terms of his 12-year contract.  He won the Stanley Cup under the terms of that contract.  If the NHL decides to void either Luongo's, Savard's or Pronger's deal, what will they do with Marian Hossa?  Would they actually tell the defending Stanley Cup champions that a member of their championship team was working under an illegal contract?  And if somehow they actually did that, why did they wait so long?

And what would that mean for Marian Hossa?  Would he become a free agent again after playing only one season with the Blackhawks?

The league was clearly pushed too far with the Kovalchuk deal, but the idea that they would actually void contracts that they previously approved doesn't seem probable.  Yes, the NHL announced that they were going to investigate the Hossa and Pronger contracts shortly after they were signed, but that was over a year ago.  If they wanted to put a stop to this practice, they should have done so back then.  It looks like the NHL is taking this opportunity to flex its muscles a bit, but the league is most likely blowing smoke.

Of course, the bigger issue here might be with the NHL's collective bargaining agreement.  The deal was recently extended until 2012, but the league's recent actions aren't making the NHLPA happy.  They will more than likely file a grievance if any further action is taken on longer contracts, but could this current climate lead to another lockout in 2012?

Does the NHL really want to go down that route again?

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