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NHL Deputy Commissioner Bill Daly addresses the Glendale City council meeting in Glendale, Ariz., Tuesday, May, 11, 2010. The City council is voting on a financing mechanism to cover operating loses of the Phoenix Coyotes until an owner can be found. (Rob Schumacher/AP)
NHL Deputy Commissioner Bill Daly addresses the Glendale City council meeting in Glendale, Ariz., Tuesday, May, 11, 2010. The City council is voting on a financing mechanism to cover operating loses of the Phoenix Coyotes until an owner can be found. (Rob Schumacher/AP)

Daly weighs in on long-term contracts Add to ...

As part of last week's story on Brian Burke's involvement in the Kovalchuk arbitration case, I talked with NHL deputy commissioner Bill Daly about that contract, the settlement and other long-term deals.

Our conversation was before the Devils were hit with the $3-million fine and other penalties on Monday, but at the time, Daly did say the league was still contemplating such penalties for New Jersey. Several aspects of the Kovalchuk case are expected to be key items on the agenda at Tuesday's board of governors meeting in New York.

A few other notes on all this before I get into the Daly Q&A:

1. One league source (not Daly) said that the long delays in announcing the NHL-NHLPA settlement on Kovalchuk (it came out at 3 a.m.) had to do with the league debating how best to punish New Jersey. Putting the hammer down for that first contract was likely always part of what the NHL was after here.

2. I was also told that the structure of Kovalchuk's initial 17-year, $102-million contract was proposed by the Devils, not the player's agent, which helps explain why the league found the team largely at fault.

Here's what Daly had to say on all this last week:

Q. Do you feel the recent settlement goes far enough to prevent deals that circumvent the cap or will large market teams continue to sign these contracts? Is this an issue that needs to be further negotiated (in the next CBA)?

Daly: "Yes, we are comfortable that the settlement terms directly address the "circumvention" contracts. It doesn't necessarily address (nor was it ever intended to) the issue of "long-term contracts", per se, nor the "cap advantages" that some Clubs can get by entering into long-term contracts and front-loading those contracts.

"For better or worse, those types of contracts are contemplated and expressly permitted by the CBA. I'm not saying that issue doesn't need to be addressed as part of our next collective bargaining negotiation, it probably does. But this was about addressing contracts that we felt circumvented the collective bargaining agreement through the addition of years that no one reasonably expects the player to perform. Those were the contracts that circumvented the CBA."

Q. Haven't deals like the ones Franzen or Savard have essentially been legalized and approved given they fit (or almost fit) the new guidelines?

Daly: "The guidelines were expressly designed to 'legalize' and create bright lines for the type of contracts we thought were legitimate. That may tell you what we believe about certain existing contracts that are out there. As for the Savard contract, I believe its unique on a host of levels. I don't think you have seen (or will see) too many contracts like it, although I don't want to be more specific than that. And we believe the Savard-type contract has been effectively addressed by the settlement terms, at least from our standpoint."

Q. Do you get the sense some GMs are unsatisfied with this settlement? This seems to be a divisive issue for the league side, pitting large market clubs that can afford these deals against those which can't (or won't). How is a consensus reached?

Daly: "I'm not sure I have a full sense of what the GMs feel at this point. Again, it probably depends on their point of reference. Some clearly want us to address the 'long-term contract' issue, but as I said above, that's not what this dispute nor the terms of the settlement were about. I will say that the feedback I have gotten from the Clubs on the settlement has been very positive. In terms of our 'bargaining position' on this issue (and other issues), we listen to everyone's views on the subject, and we make decisions that we feel are in the best interests of the League as a whole. That's what we get paid to do. That's what was done in bargaining five years ago, and that's what was done in relation to this settlement."

Q. In hindsight, should the league have acted sooner on these contracts? Looking over the long-term deals out there, Briere's contract would seem to me to be the first to go down this path of a significant "dive back" on the contract and it was signed July 1 of '07.

Daly: "You seem to be coming at this from the point of reference that 'long-term, back-diving contracts' are wrong and should be abolished. That may be your point of view, and others may ultimately share that point of view, but that's not what this fight was about. Under the terms of our current CBA, there is absolutely nothing wrong with Daniel Briere's contract. Nor Mike Richards' contract. Nor Duncan Keith's contract. None of them can fairly be characterized as circumventions of the CBA.

"We may ultimately decide that we don't like their structures and/or may want to account for them in different ways, but that's a decision that will have to be made in collective bargaining. There are lots of League 'benefits' stemming from how we currently account for contracts under the CBA -- but there may also be 'detriments.' Ultimately we'll have to weigh the benefits against the detriments and see if there might be a better way. Again, though, that's something that will be done in collective bargaining two years from now."

Q. Was Kovalchuk's contract not the logical extension of where these deals were headed?

Daly: "I would suggest the answer is 'no.' At some point in the process, creative contract structuring, which was always within the contemplation of the overall system, moved into 'tacking on fake years to a contract' for the sole and exclusive purpose of receiving cap benefits, which was never contemplated under the system. The former is smart negotiating, the latter is a circumvention of the CBA and the system the CBA contemplates and creates."

Q. Will this issue and the settlement be discussed/updated at the board of governors meeting Sept. 14? And is the issue of a fine/penalty for the Devils still being contemplated?

Daly: "Yes and yes."

 

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