OT: Kovy retires? What?

[Gyldenlove]

I just dont get why Devils are able to get rid of Kovy's cap hit. My understanding is that you can't just 'terminate' a contract because situation came up.

btw I dont have any problem Kovy playing in russia this coming season. Though he royally screwed Devil's over and fellow Russian players in NHL as well. Why would teams want to commit to a russian player now? I sure as hell would look for players from other nation if options are available.

This is the default provision, it is part of all NHL contracts. If a player defaults on the contract (fails to show up and play) the team can terminate the contract and the cap hit is wiped out.

 

[Yemack]

This is the default provision, it is part of all NHL contracts. If a player defaults on the contract (fails to show up and play) the team can terminate the contract and the cap hit is wiped out.

a potential loophole desperate teams can explore

 

[Kronwalled55]

My favorite player that didn't play for Detroit. I have his Atlanta jersey.

I hope he signs a 1 year somewhere in the future.

 

[kuick]

a potential loophole desperate teams can explore

They already have. Lou knows exactly what he's doing.

 

[Yemack]

They already have. Lou knows exactly what he's doing.

maybe, maybe not. I dont know the financial situation of devils organization to have an opinion.. but I'm pretty sure having Kovalchuk on their roster is better than without.

 

[Gyldenlove]

a potential loophole desperate teams can explore

It is true, but there are provisions against wilful defaults, basically to curb any nod-wink deals allowing a team or player to walk away from a bad deal. Specifically the team can choose to toll the contract of the player and vice versa the player can choose to not accept a default and ultimately foreclose on the team if they fail to keep up with payments.

In this situation since it is mutual benefits, Kovy is not going to play in the NHL again so the Devils have no reason to toll the contract and keep his cap hit on the books and on the flipside Kovy has no interest in staying in the New Jersey so he won't try to keep collecting those juicy checks.

 

[kuick]

maybe, maybe not. I dont know the financial situation of devils organization to have an opinion.. but I'm pretty sure having Kovalchuk on their roster is better than without.

Look at it this way: He retires this year, the penalty for NJD is $250,000 for 12 years. That's really nothing. Everybody wins year.

If they wait one more season to do this, NJD is penalized $700,000 for 11 years. Not too terrible but it's getting there and growing. Imagine Kovy played until 2018 (Age 35), which is a more reasonable time for him to consider retiring. Devils face nearly 4 million against the cap for 7 years. That hurts.

Sucks a lot to lose him on the ice, but financially it's the best move for them. Kovalchuk enjoyed his time in Russia and he can make twice as much there anyways. Everyone is happy in this scenario.

 

[Unfriendly Ghost]

Lysenkov reports that Kovalchuk will be joining SKA St. Petersburg of the KHL, the team for which he played during the NHL lockout. There’s where he will “become the most-paid player in the world,” according to SovSport.

How much? He speculates that if it was “a $ 15-20 million per year (at the taxation in 13%)” it would not be a surprise. (No word if that's on the KHL cap or some of it off the books.)

On top of that, Puck Daddy’s Dmitry Chesnokov believes SKA could front-load the contract and pay Kovalchuk an enormous sum of money up front.

 

[Yemack]

It is true, but there are provisions against wilful defaults, basically to curb any nod-wink deals allowing a team or player to walk away from a bad deal. Specifically the team can choose to toll the contract of the player and vice versa the player can choose to not accept a default and ultimately foreclose on the team if they fail to keep up with payments.

In this situation since it is mutual benefits, Kovy is not going to play in the NHL again so the Devils have no reason to toll the contract and keep his cap hit on the books and on the flipside Kovy has no interest in staying in the New Jersey so he won't try to keep collecting those juicy checks.

yeah but if the player and team agrees that it's best for both to abolish the contract, like in this situation, they can do this sort of nod-wink deal all they want with minimal penalty.

I just dont think this is fair when teams are buying out contracts to get out of bad contracts.

 

[Bench]

And to think, the Kings won a Cup and have a strong team set in stone for years because they lost the Kovy sweepstakes. Blessing in disguise there.

 

[Yemack]

Lysenkov reports that Kovalchuk will be joining SKA St. Petersburg of the KHL, the team for which he played during the NHL lockout. There’s where he will “become the most-paid player in the world,†according to SovSport.

How much? He speculates that if it was “a $ 15-20 million per year (at the taxation in 13%)†it would not be a surprise. (No word if that's on the KHL cap or some of it off the books.)

On top of that, Puck Daddy’s Dmitry Chesnokov believes SKA could front-load the contract and pay Kovalchuk an enormous sum of money up front.

15-20 per year? How does GM or owner justifies such contract in financial term? they will never ever make it back in tv, tickets, and KHL merchandise sales.

 

[Yemack]

Look at it this way: He retires this year, the penalty for NJD is $250,000 for 12 years. That's really nothing. Everybody wins year.

If they wait one more season to do this, NJD is penalized $700,000 for 11 years. Not too terrible but it's getting there and growing. Imagine Kovy played until 2018 (Age 35), which is a more reasonable time for him to consider retiring. Devils face nearly 4 million against the cap for 7 years. That hurts.

Sucks a lot to lose him on the ice, but financially it's the best move for them. Kovalchuk enjoyed his time in Russia and he can make twice as much there anyways. Everyone is happy in this scenario.

you make a good point

 

[kuick]

I just dont think this is fair when teams are buying out contracts to get out of bad contracts.

It's a mutual agreement there. Kovalchuk isn't worried about getting paid because he can do it elsewhere, and probably doesn't want to handcuff the Devils. If he did, they probably wouldn't permit him to play overseas, and the NHL would fight that.

Compliance buyout players need the money that's coming to them because it's all they have for the future.

 

[Unfriendly Ghost]

15-20 per year? How does GM or owner justifies such contract in financial term? they will never ever make it back in tv, tickets, and KHL merchandise sales.

The thing about the KHL, though, is that it's not really intended to be profitable. It's a billionaire's playground, and that's exactly what this signing will show. The fact that Russian pundits are openly speculating that Kovalchuk might be paid under the table is symptomatic of how the KHL operates.

 

[The Zetterberg Era]

I think this will be remembered as a key day where the New Jersey Devils took a large step towards becoming the Quebec Nordiques.

The Devils stabbed the other Owners in the back by consenting to voiding his contract.

 

[FlashyG]

15-20 per year? How does GM or owner justifies such contract in financial term? they will never ever make it back in tv, tickets, and KHL merchandise sales.

I don't think any teams in the KHL turn a profit.

They all operate with huge losses but generally don't care as they are funded by Russian billionaires.

 

[Bench]

The thing about the KHL, though, is that it's not really intended to be profitable. It's a billionaire's playground, and that's exactly what this signing will show. The fact that Russian pundits are openly speculating that Kovalchuk might be paid under the table is symptomatic of how the KHL operates.

My favorite part is there is a salary cap, but the league can allow a star player not to count on it. And the league president runs a team so he can pick when his team is exempt! Oh KHL.

 

[Henkka]

15-20 per year? How does GM or owner justifies such contract in financial term? they will never ever make it back in tv, tickets, and KHL merchandise sales.

Worlds greatest Gas company Gazprom owns SKA St. Petersburg.

If they pay 1 billion dollars for Kovalchuk, it's still peanuts. That's how things work at Russia.

 

[Yemack]

I don't think any teams in the KHL turn a profit.

They all operate with huge losses but generally don't care as they are funded by Russian billionaires.

yeah but usually even if they lose money on year to year operation, owners can at least make it back on appreciation of franchise value.

I guess this KHL thing is really just a toy. Not a sound league financially.

 

[The Zetterberg Era]

My favorite part is there is a salary cap, but the league can allow a star player not to count on it. And the league president runs a team so he can pick when his team is exempt! Oh KHL.

MLS started doing the same garbage. That is what you do when you cannot decide what your league should be.

 

[Yemack]

Worlds greatest Gas company Gazprom owns SKA St. Petersburg.

If they pay 1 billion dollars for Kovalchuk, it's still peanuts. That's how things work at Russia.

In north america, public corporations usually have board members who would never ever approve a deal like this.

 

[kuick]

I think this will be remembered as a key day where the New Jersey Devils took a large step towards becoming the Quebec Nordiques.

The Devils stabbed the other Owners in the back by consenting to voiding his contract.

Hadn't thought about that angle yet, but you're probably right. I just pray your wrong.

Hopefully this is a one-time circumstance and not a continuing practice. Hopefully the rest of the league realizes there will always be someone to find new loopholes.

We don't need to lose any more hockey over this.

 

[Henkka]

Hah, some Finnish friends started to hint that Datsyuk is next.

I think he would not have done his extension, if he had a retirement on his mind.

 

[BeersHockey]

1. He isn't going to quit playing. He is going to simply go to the KHL and earn more money.

2. Risk or not, it doesn't make it any less of a dick move to sign a front-loaded deal then jump ship after two years.

Really? How much did he get paid on his "front loaded deal"? Kovy played 3 years on his deal - $6mm for the first 2 years and $11mm last year = $23mm (pretty much market rate); Cap hit over that time < $20mm. Slight recapture penalty (which could have been a ton worse), and he leaves $77mm on the table. Oh man, he really screwed the Devils.

 

[chances14]

Hah, some Finnish friends started to hint that Datsyuk is next.

I think he would not have done his extension, if he had a retirement on his mind.

even if datsyuk wanted to leave, i don't think he would bail out on his contract with the wings.

seems like too much of a character guy to do that