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Ilya Kovalchuk #17 of the New Jersey Devils skates against the Toronto Maple Leafs at the Prudential Center on February 5, 2010 in Newark, New Jersey. (Jim McIsaac/2010 Getty Images)
Ilya Kovalchuk #17 of the New Jersey Devils skates against the Toronto Maple Leafs at the Prudential Center on February 5, 2010 in Newark, New Jersey. (Jim McIsaac/2010 Getty Images)

Eric Duhatschek

Kovalchuk contract headed to arbitrator Add to ...

To the surprise of absolutely no one, the NHL Players' Association filed a grievance Monday against the NHL's decision to overturn Ilya Kovalchuk's historic 17-year, $102-million (all currency U.S.) contract, on the grounds that the deal the Russian star signed with the New Jersey Devils contravenes no rules in the collective bargaining agreement and thus should be allowed to stand.

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Even the timing was expected - fully five days after the league rejected the contract in the first place, on a July day when the thoughts of most sane people drift to vacation, and not the intricacies of a financial dispute between a league and a team that spilled from last week into this week and remains an ongoing concern.

Officially, the union communicated the news this way: "The NHLPA has filed a grievance disputing the NHL's rejection of the Standard Player Contract between the New Jersey Devils and Ilya Kovalchuk. Under the terms of the CBA, the NHLPA and Mr. Kovalchuk are entitled to an expedited resolution of this matter. The NHLPA will have no further comment until this matter has been resolved by an Arbitrator."

But is it really that simple?

In theory, the Kovalchuk dispute is supposed to go to a system arbitrator and be heard on an expedited basis within 48 hours. It would be up to the system arbitrator to decide whether Kovalchuk's contract actually represents a circumvention of the NHL salary-cap language, which is vague and general, or meets all of the CBA criteria and thus would be allowed to stand.

Many other contracts have been modelled along the lines of Kovalchuk's deal, which lasts 17 years, or until he reaches the age of 44, and is heavily front-loaded, meaning the vast majority of the dollars ($98.5-million) are paid to him in the first 11 years of the deal.

The league's position is that the final five years of the deal, structured so that Kovalchuk earns a comparative pittance ($550,000 per year), was written to lower the annual salary-cap charge against the Devils to $6-million. Without those last years at a relatively modest level, the Devils' cap hit would be considerably higher - and thus make it more difficult to sign other players in the years ahead.

Largely because of the NHLPA's internal problems sorting out its own leadership, the two sides have never gotten around to settling on a system arbitrator, although there have been interviews held. Since there is no default position in the CBA as to how the grievance would go forward without a system arbitrator, there is effectively no one in place to hear the dispute.

Even if the NHL's case here is weak, it puts the league at an advantage in terms of the controlling how the process unfolds - and in particular, its timing. Kovalchuk is effectively in limbo until the matter can be decided. If the NHL wants, it can drag its feet on this indefinitely and insist that before anything else happens, a system arbitrator must be put in place.

On the other side, if the league feels it has a strong enough case, it can agree to go to independent arbitration and then the matter will get decided within the week.

Under the CBA, a player who signs a contract before the age of 35 can retire and have his contract come off a team's salary cap; however, teams must negotiate the contract in question in good faith, with the reasonable expectation that the player will remain in the league for the contract's duration.

In effect, it could come down to an arbitrator's willingness to rule in favour of common sense (that at age 39, after cashing all those $11.5-million annual checks, Kovalchuk won't want to keep playing for $550,000). Is a deal structured that way negotiated in good faith?

It's hard to prove either way and as a result, it's hard to know what will happen next because if the NHL loses the case, then it opens the door for further tweaks on the Kovalchuk contract model. Kovalchuk's was just a little more extreme than the 12-year, $63.3-million contract signed by Marian Hossa with the Chicago Blackhawks last summer. Hossa's contract was just a little more extreme than the multi-year contracts signed by Henrik Zetterberg and Johan Franzen with the Detroit Red Wings before that.

The next two critical negotiations will feature the Tampa Bay Lightning and Steve Stamkos; and the Los Angeles Kings and Drew Doughty. Both players are only two years into their respective careers and have posted spectacular successes along the way. Stamkos was one of only three NHL players to score 50 goals last season. Doughty, meanwhile, was a Norris Trophy finalist and a mainstay of Canada's defence during the 2010 Winter Olympics. He has a Ray Bourque upside. Both players are critical to the long-term rebuilding plans at play in both Tampa and Los Angeles. If the 17-year Kovalchuk contract gets approved there is nothing to stop either Tampa or Los Angeles from signing Stamkos and Doughty to terms of 25 years or more, in order to mitigate the salary-cap charges.

So expect the two sides to dig in and play hardball here, because lots is at stake. Indeed, in an era when the game on the ice has never been stronger, it is just the sort of dispute that could trigger another labour war between the two sides. In 1994, coming off one of its most successful seasons in history, the NHL locked the players out for the first 103 days of the season and the momentum created by the New York Rangers' Stanley Cup victory was lost, basically, for 15 years.

If the Kovalchuk dispute sets in motion Armageddon 3, and another costly labour dispute, then everybody loses - again. You'd think they'd have the common sense to avoid going down that path, but you might also have thought that in the past and been sorely disappointed by the willingness of both sides to put their own selfish interests ahead of the greater good of the game and the industry.

Some things never change, do they?

Follow on Twitter: @eduhatschek

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