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NHL still looking at four contracts after Kovalchuk decision
Published August 23, 2010
The NHL is continuing to investigate whether the contracts of four players violated the collective-bargaining agreement, and the fact that there has been no system arbitrator appointed has impeded those investigations, said Deputy Commissioner Bill Daly.
The investigations of the contracts of Marc Savard, Marian Hossa, Roberto Luongo and Chris Pronger “remain ongoing,” Daly told SportsBusiness Journal in an e-mail last week. Some of those investigations have been going on for at least a year, but they have become news after the NHL earlier this month won a big victory in the case overturning Ilya Kovalchuk’s 17-year, $102 million contract.
The Kovalchuk contract is similar to those of the other four players in that the players receive big money upfront and smaller payments at the end of the deals when they are older and possibly not able to perform at the same level. One big difference is that the NHL immediately rejected the Kovalchuk deal but accepted, or registered, the other four deals.
After the NHL registered the contracts of Savard, Hossa, Luongo and Pronger, it conducted an investigation into whether those deals violated the rules in the NHL collective-bargaining agreement regarding circumvention of the salary cap. (Arbitrator Richard Bloch found that the Kovalchuk deal violated the CBA because Kovalchuk may not be playing in the last years of his contract, when he is in his 40s. Bloch was appointed on a one-time basis after the NHL Players’ Association filed a grievance over the league’s rejection of the Kovalchuk contract.)
NHLPA spokesman Jonathan Weatherdon, asked to comment on this story, said, in an e-mail, “We have been aware of the NHL’s investigations since its first investigation began over a year ago. To date, the League hasn’t informed us that they have found any evidence of circumvention. I think it’s safe to say all parties involved look forward to having the investigations brought to a conclusion.”
There is some talk in hockey circles that at least one of the four investigations was either closed or at a dead end months ago. (Sources requested anonymity because they were not authorized to speak publicly about union or league business or individual players’ contracts.)
Others note that a full investigation of all four contracts could not be conducted because the league can compel the teams to cooperate but not the agents and players. That is because it takes what is known in the CBA as a system arbitrator to force players and agents to cooperate in an investigation. Since the current CBA was ratified in 2005, there has been no system arbitrator appointed because, according to some sources, the league and the NHLPA cannot agree on someone to fill the role.
“It’s true that we have engaged in and worked on a selection process with the PA for a System Arbitrator and that that process has not yet yielded a permanent arbitrator,” Daly wrote.
Sources told SportsBusiness Journal that the league could force the appointment of a system arbitrator by filing a court case. Asked whether the NHL would file such a case, Daly responded, “Not a preferred approach, but given the right set of circumstances any party to a contract has the right to seek court intervention to protect its contractual rights and expectations.”
As it is now, Daly said, “The lack of a System Arbitrator has certainly impacted the ongoing investigations, and to this point has necessarily limited their scope.”
Meanwhile, those in the hockey community wonder what would happen if, say, the NHL overturned the contracts of one or all four players. Now that it is August, the teams that might be interested in signing Savard, Hossa, Luongo and Pronger may have already spent their free agent money. Those players could have a case against the league, some sources said.
Also not clear is what other remedies would be available, besides tearing up the contracts of the players, if the NHL decided there was circumvention and was able to get an arbitrator to agree.
“It depends on what we decide to do and how we decide to do it. The CBA provides a number of different alternatives and remedies,” Daly said, without elaborating on those remedies. “Obviously, it’s ‘legal’ to do anything the CBA allows or authorizes.”
As a result of Kovalchuk, there is a lot of speculation in hockey circles that the NHL will push for term limits on individual player contracts in the next round of CBA negotiations. The CBA expires in September 2012.
Sources said the NHL did, in fact, try to place a limit on the years in a player’s contract in the last round of talks, but the NHLPA resisted it, and the limit was not part of the 2005 CBA, which ended the 2004-05 NHL lockout.
Daly confirmed this, writing, “Yes, that’s true, but this isn’t really an issue about term limits on contracts. There’s nothing wrong with a 17-year contract, per se. The issue is whether the contract includes years that neither party really expects or intends to perform. The issue is whether the contract includes illusory years simply for the purpose of lowering the cap hit and creating extra payroll room.”
CAA SIGNS COACHES, BROADCASTER: CAA Sports has signed former Oregon basketball coach Ernie Kent and Rutgers basketball coach Mike Rice for coaching representation.
All CAA clients are represented by teams of agents in the different divisions of the entertainment and sports representation agency. Kent and Rice will be represented by a team of agents led by Terry Prince.
Additionally, CAA signed former New York Giants linebacker Antonio Pierce and brokered his deal to join ESPN as an NFL analyst. A team led by agents Andy Elkin, Trace Armstrong and Becky Sendrow will represent Pierce.
TWO TO ROSENHAUS: Rosenhaus Sports, the NFL rep firm run by brothers Drew and Jason Rosenhaus, has signed Tennessee Titans fullback Ahmard Hall and Dallas Cowboys wide receiver Kevin Ogletree.
Hall had been represented by Vincent Taylor, and Ogletree by Joe Flanagan.
OCTAGON SIGNS LIEBERMAN: Octagon has signed coach Nancy Lieberman of the NBA Development League’s Texas Legends, the first woman to be named head coach of an NBA or D-League team.
Phil de Picciotto, Octagon president of Athletes & Personalities, will represent Lieberman, who does broadcasting work for ESPN/ABC for their WNBA, NBA and NCAA women’s basketball coverage. Lieberman, one of the most renowned women basketball players of all time, also has a new book coming out this fall.
“Nancy keeps doing new and meaningful work to help others reach their potential,” de Picciotto said. “We are proud she has chosen us to further develop and manage her many business opportunities.”
ACES ADDS CECIL: ACES Inc., the New York-based baseball player representation firm headed up by brothers Sam and Seth Levinson, has signed Toronto Blue Jays pitcher Brett Cecil for representation.
CLIFTON LEAVES GAYLORD: Veteran baseball agent Gregg Clifton, who has represented players such as Tom Glavine, David Wells and softball’s Jenny Finch, has left Gaylord Sports Management to take a job as a partner in national labor and employment law firm Jackson Lewis.
Both Clifton and Gaylord President David Yates said the parting was amicable, and they anticipate that Clifton and his new firm will serve as a legal advisers to Scottsdale, Ariz.-based Gaylord. Clifton’s clients will remain with Gaylord.
In related news, Gaylord has signed Florida Marlins second baseman Dan Uggla for on- and off-the-field work. Terry Bross, who will now be running the Gaylord baseball department, will serve as Uggla’s lead agent. Uggla had been represented by Beverly Hills Sports Council.
Clifton, who has been an agent since the late 1980s, formerly worked at the now defunct Bob Woolf & Associates, the firm headed by the late sports agent pioneer Bob Woolf. Clifton joined Gaylord in 2004.
Clifton said that Jackson Lewis was the first firm he worked for out of law school and that he was approached recently with an offer to rejoin the firm as a partner in its Phoenix office working in its sports and entertainment practice group.
“I am fortunate to have this tremendous opportunity to broaden my sports and entertainment practice beyond the agent practice that has been my primary focus for the last 20 years,” Clifton said.
Yates said, “Absolutely, this was done on very amicable terms, and Terry [Bross] and Gregg [Clifton] remain in contact.”
Liz Mullen can be reached at email@example.com. Follow her on Twitter @SBJLizMullen.