This Day in Hockey History – July 19, 2010 – The Devils in the Details

Jul 19, 2019

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On July 19, 2010, the New Jersey Devils signed left winger Ilya Kovalchuk to what was a monstrous 17-year contract worth $102 million. The Devils had acquired Kovalchuk earlier on February 4, 2010 from the Atlanta Thrashers who had been unable to come to terms with Kovalchuk on a contract extension. At the time it was the longest contract in the history of the NHL.

It is said that during the 2009-2010 season Thrashers’ general manager Don Waddell had offered Kovalchuk a 12-year, $101 million deal first and then a seven-year, $77million deal, both of which Kovalchuk turned down. Waddell then elected to trade the forward so as to get something in return before Kovalchuk entered free agency as an unrestricted free agent that summer.

While the Devils assumed they had Kovalchuk locked up through 2027, the NHL immediately blocked the contract, asserting that the Devils had tried to circumvent the salary cap in terms of both the length of the contract as well as the structure of the deal in regard to salary. The NHL Players Association fought back and things went to arbitration.

“It’s back to the drawing board for Ilya Kovalchuk and the Devils. After arbitrator Richard Bloch ruled Monday that the NHL was justified in rejecting the 17-year, $102 million contract Kovalchuk signed with the Devils on July 19 as a circumvention of the salary cap and the collective bargaining agreement, the sides immediately began negotiating another deal that they hope will be approved,” reported Tom Gulitti of The Herald-News.

“While we do not currently have a contract with Ilya Kovalchuk discussions have resumed and we are hopeful that a contract will be reached that meets with the principles in arbitrator Bloch’s [ruling] and the NHL’s approval,” Devils general manager Lou Lamoriello stated.

Two of the key points in Bloch’s ruling had to do with the age that Kovalchuk would have been by the end of the contract, and the structure of the salary.

The contract would have taken Kovalchuk until “just short of his 44th birthday.” Such a contract is “markedly rare. Currently, only one player in the league has played past 43 and, over the past 20 years only 6 of some 3,400 players have played to 42,” the ruling stated. “The dynamics of this [contract], with particular reference to its final six years, are such that there is scarce reason for either player or club to continue the relationship. By year 11, the player will have received $98 million of his $102 million contract.”

In the end, Kovalcuk and the Devils were able to come to terms on a 15-year, $100 million contract which the NHL agreed to on September 4, 2010.

There were reprisals and sanctions handed out to the Devils for their craftiness in the original contract. New Jersey was forced to surrender $3 million, a third-round draft choice in the 2011 NHL Entry Draft and one future first-round draft pick within the next four seasons. Because the Devils chose to use their first-round picks in both 2011 and 2012, it was expected that they would surrender their pick in 2014.

The NHL had a change of heart on some of its sanctions.

“The New Jersey Devils won’t have to forfeit a first-round pick after all for attempting to circumvent the salary cap by signing Ilya Kovalchuk to a 17-year deal in 2010, the NHL announced on Thursday [March 6, 2014]. Instead the Devils will be given the 30th pick in the draft and thus not be eligible for the lottery. New Jersey’s fine was also reduced, the league announced. TSN, which first reported the story, said the team was getting back US$1.5 million. Kovalchuk leaving for the KHL last summer appeared to be the reason for the change.”

Officially, Kovalchuk retired from the NHL July 11, 2013, with 12 years still remaining on the revised contract he signed in September of 2010. This could have been in part a result of the lockout shortened 2012-13 season which prompted many NHL players to look to European teams to play on until the new collective bargaining agreement was agreed to and the NHL managed a half season with a slightly delayed playoffs. Having the opportunity to play for the KHL during the lockout meant not only that Kovalchuk could play in his native Russia, but also that he got to keep more of his salary, not having to pay taxes to the United States.

His retirement from the NHL was indeed an effort to return to Russia so that he could play in the KHL. It was announced on July 15th that Kovalchuk had signed a four-year deal with SKA St. Petersburg of the KHL.

“SKA did not disclose the terms of the deal in announcing Kovalchuk’s signing. Alexander Medvedev, the former president of SKA, told the Russian daily Sport-Express that Kovalchuk’s earnings would be ‘absolutely comparable’ to what he would have made in four years with the Devils,” wrote New York Times reporter Jeff Z. Klein.

While at the time of the signing it was true that Kovalchuk would have made an impressive salary, the crash of the Russian ruble in December, 2014 undoubtedly affected his contract. One has to speculate if he would have been better off remaining with the Devils to finish out the 12 years and earn the remaining $77 million.

Five years after announcing his retirement from the NHL, Kovalchuk expressed an interest in returning to the NHL. The Los Angeles Kings were among the several teams who reached out to Kovalchuk and they signed him to a three-year contract with an average yearly value of $6.25 million, making him a King for the 2018-19 season..

Additional Sources:

Mike Commito, Hockey 365, Daily Stories (Toronto, Ontario: Dundurn Press), Kindle edition.
Tom Gulitti, “Arbitrator’s ruling sends them back to the table,” The Herald-News (Passaic, New Jersey), August 10, 2010, Sec. C, p. 1.
“NHL reduces Devils penalty for Kovalchuk deal,” Calgary Herald (Alberta, Canada), March 7, 2014, p. B11
Jeff Z. Klein, “Kovalchuk Signs With SKA St. Petersburg of K.H.L.” The New York Times, Juy 15, 2013, as found online.