Kovi's Korner Officially Retired with New Agreement

The NHL and the NHLPA jointly announced an agreement on long term contracts that grandfathers in existing deals and approves the latest version of the Ilya Kovalchuk kontract with the New Jersey Devils.

Thus, we will say a joyful good-bye to the "Kovi's Korner" header that we have been using for the last six weeks to group the daily escapades of all involved in the kontroversial kontracts. We will also return to using "C"s instead of "K"'s in spelling of certain words where we have taken liberties in light of the proceedings.

The agreement is basically an addendum to the current Collective Bargaining Agreement (CBA) will act as a bridge from today through contracts for the 2012-2013 season in how long term contracts are handled for players in their years past age 35. It will close the loophole that owners had found and used to "legally circumvent" the current CBA in order to lower the yearly cap hit on high dollar deals.

No mention was made of any punishments or fines for the parties involved in regards to circumvention of the CBA.

The Kovalchuk contract as approved, leaves the Devils approximately $3 million over the salary cap so more roster moves are expected in the next few weeks.

Both sides have claimed "victory" in the agreement so hopefully that is a good sign as we move toward the summer of 2012 when the entire CBA will be re-negotiated.

Here is the full release that is signed jointly by communication directors of both the NHL and the NHLPA...

NHL, NHLPA REACH AGREEMENT GOVERNING LONG-TERM CONTRACTS
Kovalchuk Contract Registered; Four Circumvention Investigations Dropped

NEW YORK/TORONTO (September 4, 2010) – The National Hockey League Players’ Association and National Hockey League today announced an agreement that will implement new rules governing the parameters of long-term contracts and how they are valued within the NHL Salary Cap System.

As part of the agreement, the NHL will register the contract between the New Jersey Devils and Ilya Kovalchuk that was filed with the League on August 27, 2010. The NHL also will terminate its circumvention investigations into the contracts signed in 2009 by Marian Hossa of the Chicago Blackhawks, Roberto Luongo of the Vancouver Canucks, Marc Savard of the Boston Bruins and Chris Pronger of the Philadelphia Flyers.

Under the terms of the agreement, the new rules will apply only to long-term contracts, defined as those with terms of five years or longer, and only to contracts executed after September 4, 2010. The new rules apply to contracts signed between now and the end of the CBA, as well as all contracts signed that begin in the 2012-13 season. The parties have agreed that the new rules do not automatically carry over into a new CBA.

For the purpose of Salary Cap calculations, any long-term contract that extends past a player’s 41st birthday will be valued and accounted for in two ways: The compensation for all seasons that do not include or succeed the player’s 41st birthday will be totaled and divided by the number of those seasons to determine the annual average value (AAV) charged against the team’s Cap for those seasons. In all subsequent seasons, the team’s Cap charge will be the actual compensation paid to the player in that season (or seasons, as appropriate).

Additionally, in any long-term contract that averages more than $5.75 million for the three highest-compensation seasons, the following rule shall apply: Solely to determine its value for purposes of the Salary Cap, a player’s compensation for any season in which he is age 36, 37, 38, 39 and/or 40 shall be valued at a minimum of $1 million.

"We're pleased to be able to establish clearly-defined rules for these types of contracts going forward and just as happy we can turn the page on uncertainties relating to several other existing contracts,” NHL Deputy Commissioner Bill Daly said. "From start to finish of this multi-week process we were able to work closely and cooperatively with representatives of the Players' Association, who shared our belief that the creation of definitive rules and guidelines in this area would be beneficial to everyone – Clubs and players alike."

"We are pleased to finalize an agreement which ends the League's circumvention investigations and also establishes rules on long-term contracts that will provide players, their certified agents and general managers clarity for the negotiation of new contracts," said Roland Lee, Director of Salary Cap/Marketplace & Associate Counsel for the NHLPA. "Turning the page on this process is something that will benefit all parties involved."

John Dellapina
Director, Media Relations
National Hockey League
(212) 789-2115

Jonathan Weatherdon
Director, Communications
National Hockey League Players’ Association
(416) 313-2316

More Later...

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