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Wednesday, August 11, 2010

Kovalchukian Capology: A Different Take – The Colonel

Ohhhhh, we have all heard it! With more drama than the “OC,” we have been following the exploits, analysis and spiraling downturns of what I would now like to refer to as Kovalchukian Capology – “The K.C.” – throughout the summer and guess what? Game (is back) O-on!

That said, there is another way to sort through this stuff. Ever read a history of a great battle? If you are a true student of the battle, you have likely read several versions of the same thing and probably in different languages. That is because history (curiously enough, like Twitter) is all about perspective – four people staring at the exact same happenstance are most likely to describe it differently based on just how they see it.

In The K.C., there, too, are multiple, differing perspectives. You have the position of the NHL, the Team, the NHLPA/Players, and the Fans. In honor of German philosopher Georg Wilhelm Friedrich Hegel, this blog attempts to provide a synthesis that keeps the NHL playing on the ice instead of inside the boardrooms come September 16, 2012.


I’ve gotta say it – the NHL is not an evil, plotting empire, bent on the destruction of the game and the morale of its most important asset, the Players, and its second most important asset, the Fans. They have a vested interest in maintaining a viable product on the ice through multiple media outlets that showcases what we all want to see, the Players.

But like your Momma with a flailing flip-flop, they are not just going to sit idly by if something ain’t right. In their opinion, and in the case of The K.C., it is their parental responsibility to uphold the letter AND intent of the law. Why was the 17-year one a bad contract from the NHL’s perspective? Because the intent of the CBA to put a Cap in place in order to provide a means of leveling the playing field between teams was, in their opinion, violated. Kovalchuk will not play those six throw-away years because the sport will take its toll on his physical ability to do so before the contract runs out. So artificially lowering the annual total salary monies by averaging out that contract works for the benefit of the New Jersey Devils and is unfair for the rest of the teams not doing the same thing.

So out comes the flip-flop - WHACK.

The Team

Come on… The team just wants to do the best it can to put the best Players on the ice in the most economical terms that lead to winning the most difficult trophy to earn in sports. There’s language in the CBA and precedents that seemingly allow them to do just what New Jersey did. Can’t a fella – even if he’s a Devil – get a break?

Specifically for New Jersey, they want their Kovalchuk, and they want their Parise (and others), too. If you actually pay those two what they are worth in today’s, sometimes-skewed market, you could easily, tie up $20M true in any given year. But that’s more than 1/3 of the total payroll for the team, and you cannot ice a team with just two players and win games.

Can you blame them for risking flip-flop contact? I can’t.

The NHLPA/Players

Just as an aside, how does a PA with no head go into an arbitration hearing and be heard? That’s called, despite what you hear in some circles, mutual respect for the presence of the law (CBA) by all parties involved. Awesome…

The NHLPA and Players simply want the best deal they can get for their man for as high a price and as long as they can get it. That is because these are elite athletes (can YOU score like Wayne Gretzky?) with a short shelf life. That being their mission in life, they have no choice but to support their man and call for arbitration on a ruling which seems to not be on solid foundation per the letter of
the CBA.

To everyone’s credit, they are supporting the Arbitrator who ruled in favor of the flip-flop whack by patting The Big K on the shoulder and telling him he still has options and they will support him in any way possible as he seeks to get the best deal he can get.

The Fans

Don’t think we’re not nervous. Don’t think we aren’t worried this incident won’t blow up in September 2012 and we have no Hockey to watch for 2012-2013 (making the Mayans a couple month’s late, but nonetheless, correct by the way). What the Fans want out of this, in terms of the all-mighty Dollar, Euro, Rubles, Yen, etc. supports every other party involved.

Fans expect a meeting of the minds and men to figure it out and keep playing the game.

So Hegel Would Say…

…Come up with a synthesis. The NHL wants the letter of the law (CBA). Teams just want the best and most economical conglomeration of players they can get that may lead to a Cup. The PA and Players want the same Cup the Team wants AND to get the most compensation they can for the longest period they can do it. And we Fans just want the game, preferably in multiple technological forms and HD where available.

So what, as a synthesis, are we truly looking at here?

First you must find where the rub is. I’m not picking specifically on Kovy, but the other half of what the PA and Players want exists in direct contravention to what the Teams want. Both want the Cup. But ‘…most economical…’ and ‘…most compensation… for the longest period they can…’ go equally on the plate like spam and Filet Mignon. Both of these wants cannot coexist without compromise.

Well, to the Teams’ credit, 2/3 of them lose money each year to bring Fans what we want to see. And to the Players’ credit, many, talented ones we Fans would like to see are sitting on the sideline because the Cap is taking a bite out of Teams’ abilities to bring them on board.

The Catch 22 here is that Teams try to make their compromise through over-compensation early in free agency season in order to get the Player(s) they want. Nothing personal, but by example, Wade Redden? A total of $6.5M for .1867 points per game last year? That’s more than $450,000 per point. And while it is not all about points scored, THAT is still a mistake that overinflates the system and forces Kovalchukian Capology. I blame that on a Team, which hurts all other Teams when faced with multiple, contradictory ‘…most compensation… for the longest periods they can….’ (Rangers, you’re not alone in those types of contracts.)

And once they have overpaid for their man (or men), you have a Cap problem that needs resolving. Thus we have Kovalchukian Capology, actually born a few years prior.

But what can be done to avoid this clutter of confusion? We like things simple – bring us something that does not require Motrin just to hear about it. Please.

An answer is in two parts – the Now, and the Then.

The Now

Firstly, the Devils should be given credit for charging into the flip-flop, knowing full well the NHL was potentially deploying it because they had no choice at some point but to do so. Some would say this was not the Charge of The Light Brigade, but it’s impact is just as dramatic in Hockey terms in that it highlighted other, potential problems that require scrutiny. How do the NHL, the Teams and the PA/Players move forward so we, the Fans, keep providing the payout that turns the NHL wheel?

The CBA ‘is what it is’ right now. Sort’a. The arbitration ruling indicated a greater definition of what is a proper contract than the letter of the CBA provides. To not set up a very testy CBA discussion prior to September 2012, some compromising is in order that requires a lot of folks to do things of their own accord for the betterment of playing the game itself.

I offer that the NHL should not look into other, long-term contracts already on the books that are a bit questionable in terms of the Kovalchuk decision. I say that because there should, in the minds of the Fan, be a statute of limitations or the NHL as a corporation loses the moral high ground I think they are planted upon right now. They might disagree, but I think just like a parent watching their boys wrestle on the kitchen floor, they can only put up with it so long before they have to announce that enough is enough. In terms of The K.C., the NHL has now made that call, and going forward, the (Teams, PA and Players) boys should be on notice.

Teams? You need to police yourselves a bit better. I am a personal fan of the play of Clarke MacArthur. But if you cannot afford Who you are presented with in order to stay under the Cap without playing financial Twister, take your right hand off of blue, your left off of green, stand up, and walk away from the ‘…most compensation… for the longest periods they can…’ syndrome.

PA and Players - I know this goes a bit against the grain or your existence. The Players need to accept that the ‘…most compensation… for the longest periods they can…’ may be less than what they think it is. And when that is the case, the PA needs to continue to back their Players by simply ensuring they always have due process according to the rules as written.

…And Then

It is now approaching September 15, 2012 and the most contentious issue in the previous CBA is on the table – “The Loophole.” The NHL doesn’t want it because it violates the spirit of equal, Team opportunity. The Teams will exploit it if remains in the new agreement in order to provide the best product they can. And keeping it there is in the (PA and) Players’ best interests if they are going to maximize compensation.

Let’s give everyone a little slice of the answer.

For the NHL, let’s give a Cap Hit calculation that is easy to understand and cannot be circumvented in too damaging a way. And let’s still give Teams some wiggle room and Players the ability to maximize their opportunities to the greatest extent possible.

Start by keeping the Salary Cap so teams can remain relatively, evenly, financially viable.

In the first three years a Player is on the ice, including the first three years after college if they go that route, provide for a maximum Entry-Level Contract. This works to minimize the Cap Hit while speaking to the fact Players must earn their dues in the NHL and still be allowed to make a decent living.

After the entry level contract, provide a contract ceiling and floor that falls within the definition of the Cap. But be creative here. But all parties can pretty much agree if a player is 21 (right in) or 25 (after college) they can count on solid – maybe their best – play up to age 32. So the term for what I call a ‘Franchise Bridging Contract’ (FBC) should not surpass that age. For the length of that FBC, allow it to be for any amount per year that does not go above the ceiling or below the floor that the Player and Team will agree to. No matter how they structure it, give the Team the same Cap Hit calculation currently in the CBA to allow for potentially better economic management of the payroll with their FBC’s. If a Player signs an FBC, provide an RFA-like compensation package for trade purposes through their 29 year-old season, and a UFA-like, best-the-team-can-get-compensation package for any trade from age 30 – 32. Or if a team chooses not to provide a player an FBC, make all contracts (with standard ceiling and floor) two years in length up through age 29, three years in length for age 30 – 32, with a Cap Hit that is per the current CBA’s current, standard calculation, and with the same RFA-like and UFA-like compensation package based on age present in the FBC.

After age 32, make contracts no more than two year terms for anything between the floor and ceiling that the Team is willing to pay and the Player is willing to accept. Use the current Cap Hit calculation in the CBA. After every two year period, the player is a UFA again. Note here that the vast majority of the contracts written up will NOT be FBC’s and therefore will provide an easier to swallow, simple calculation against the Cap that meets corporate NHL’s intent of a more level (Team) sheet of ice.

For any contract except an FBC, give teams the ability to negotiate for it to be a contract that lets the team move a player up or down between Leagues as necessary.

Set a percentage of bonuses that go against the Cap Hit the following year (75%) and a percentage that is allowed to exist without penalty (25%). (What? Foul, you cry? I would argue this rewards a team for earning more money or having owners that would pay more money into the system to cover the 25%. The subsidy here is relatively small, but benefits the fans in those markets with a potentially, marginally better managed and playing team. This season, the average bonus pay out was a hair over $1.68M, so the 25% freebie against the next season’s Cap would be on average a bit over $420K. Sounds like a pittance, but when you’re right up against the Cap, it could be your savior.)

Naturally, if a Player is under contract and you trade for him, the terms of his contract move with him to your club. And if at any time a Player doesn’t like the terms when negotiating a new contract, then the PA can support his ability to walk away as a UFA and find a better contract elsewhere.


We currently have a dilemma.

I think if they walk away with the Kovy Decision in their pocket, the NHL retains the moral high ground of defending the intent of the law (CBA), with teams placed on further notice, and the good will of not ‘witch hunting’ as collateral come bargaining time. The message is not so much ‘Fear the Flip-Flop’ as it is to learn to play nice so as not to come into contact with the thing.

I think it is incumbent on Teams and Players to meet the intent of the current CBA as expressed in the Kovy Decision from this point forward until the new CBA is bargained for. But I also think Teams need to restrain themselves better when free agent season opens to avoid bloated contracts which cause these kinds of issues to occur.

For the future, I am a fan of exploitation of Players’ best years with a potential awarding of an FBC until their 32nd year and using the same Salary Cap arithmetic that is currently in the CBA to make contracts more economically friendly. Instead of and/or thereafter, Teams can also negotiate the minimum two-year contracts which support stability for Players in terms of pay and locality, Teams in terms of Cap manageability, and the NHL in terms of oversight of the system as a whole.
Multiple forms of compromise to Kovalchukian Capology will have to occur in 2012 to keep the League up and running in order to retain Fans in the seats and paying for a host of technological delivery means and merchandise. With some compromise, as Journey sang, the “…wheel… keeps on turning….”

And that is the goal of the whole thing, right?

Right? Anyone?

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