The Devils avoided arbitration with defenseman Mark Fraser, signing him to a one-year, one-way contract for $500,000.

Last season, Fraser made $500,000, but had a two-way contract. Fraser wanted a one-way contract to ensure himself a spot on an NHL roster.

Fraser became an important rookie on the Devils’ blue line last season. In 61 games, he tallied three goals and three assists and had a plus-3. He also recorded 36 penalty minutes and averaged 12:22 of ice time.

After the Devils acquired Martin Skoula in a trade deadline deal and Paul Martin returned from injury, Fraser became a healthy scratch for 13 of the team’s final 19 regular season games. He only played in one of the team’s five playoff games.

Devils’ general manager Lou Lamoriello was happy with the terms of the contract.

“This is something I’m very comfortable with,” Lamoriello said of the contract. “We talked about it, but we were prepared to go Friday (to the arbitration hearing) if we had to.”

Since Fraser filed for arbitration, the Devils now have a second buyout window to clear cap space if they need. That could help them if the rejection of Ilya Kovalchuk’s 17-year, $102 million deal is overturned. The buyout window begins three days after the agreement and ends 48 hours after the starting date.

I think this is a solid depth move for the Devils. Fraser comes cheaper than other veterans still available, and he played solid hockey whenever he was on the ice. He did make some mistakes, but he was always reliable and gave the team quality minutes. I advocated for Fraser to get more playing time last season, and I’m happy to see this deal get done.

Photo Credit: Adrian Wyld/The Canadian Press/Associated Press

With the NHLPA officially filing a grievance today against the NHL on behalf of Ilya Kovalchuk, the league and players’ union will now battle out whether the 17-year, $102 million dollar contract is legitimate. If the NHLPA wins, the Devils get their player. But if the arbitrator rules in favor of the NHL, the Devils could face harsh penalties.

After reading several reports about what exactly comes next, I wanted to outline the following steps. Big credit to Tom Gulitti of the Bergen Record for the information.

With the NHLPA filing their grievance, both sides will look to find a “systems” arbitrator. The neutral arbitrator will conduct a full hearing with witnesses, oral arguments and written briefs presented to the arbitrator. Both sides, however, can choose not to have the formal hearing.

The arbitrator can call anyone involved in the process as a witness. Kovalchuk, his agent Jay Grossman, Devils owner Jeff Vanderbeek and general manager Lou Lamoriello can all be called on for the case. The Los Angeles Kings, who Grossman and Kovalchuk negotiated with, can also be called in. The site of the hearing would be up to the NHLPA and NHL to decide. After the hearing, the arbitrator will have 48 hours to issue a ruling.

If the Arbitrator Rules In Favor of the Contract…

If the arbitrator rules that the NHL was wrong to reject the offer, the NHL will have to immediately approve and register the contract. It’s that simple.

If the Arbitrator Rules In Favor of the NHL…

If the arbitrator upholds the NHL’s rejection of the contract, then the deal would be dead and Kovalchuk would become an unrestricted free agent. Kovalchuk could then re-negotiate a deal with the Devils or sign with another team. But it’s not that simple.

The arbitrator also decides whether or not the Devils attempted to circumvent the cap. If the arbitrator believes the team attempted circumvention, commissioner Gary Bettman can then impose hefty fines against the club.

According to Article 26.13 of the collective bargaining agreement:

if the system arbitrator finds that a circumvention has been committed by the club, the commissioner has the power to impose of fine of up to $5 million in cases of circumvention of the salary cap. It also says “if such a fine is assessed against a club, that club’s payroll room shall also be reduced by such amount for the following league year.”

The Devils, who would have $3.5 million this season in cap space, would then have to shed salary to accommodate the fine. Bettman can also take draft picks of any position and any year away from the team.

Kovalchuk could also face penalties. Bettman can fine him between $250,000 and $1 million for circumvention, and the arbitrator can recommend suspension of Kovalchuk if it’s found that he tried to circumvent the cap.

I don’t think the NHL will take a hard-line stance, but the Devils, who are bystanders in the process, can potentially lose out on more than Kovalchuk if the arbitrator rules in favor of the NHL.

Photo Credit: Al Bello/Getty Images

As expected, the NHLPA filed a grievance against the NHL on the part of Ilya Kovalchuk, who had his 17-year, $102 million contract rejected by the NHL July 20.

The NHLPA announced the decision in a statement this afternoon.

“The NHLPA has filed a grievance disputing the NHL’s rejection of the Standard Player Contract between the New Jersey Devils and Ilya Kovalchuk,” NHLPA spokesperson Jonathan Weatherdon wrote in the statement. “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.”

Deputy Commissioner Bill Daly responded to the NHLPA’s statement.

“We have received formal notice that the NHLPA is grieving the league’s rejection of Ilya Kovalchuk’s contract with the New Jersey Devils,” Daly said in the statement.  ”Although there is no defined timetable at this point, we intend to work with the players’ association to ensure an expeditious resolution of this dispute.  The league looks forward to the opportunity to establish its position before the arbitrator.  We will have no further public comment pending completion of the process.”

The next step will be for both the league and the player’s association to find a “systems” arbitrator to rule on the case. The arbitrator will have 48 hours to decide whether to uphold the NHL’s rejection or deny it.

The Devils are waiting to hear if the NHLPA will file a grievance on behalf of Ilya Kovalchuk, who had his 17-year, $102 million contract rejected by the NHL on July 20 for salary cap circumvention.

All signs point to the NHLPA filing the grievance by today’s 5 p.m. deadline. The NHLPA’s lawyers have conducted a thorough study of the case – including interviewing all parties involved – in an effort to decide whether or not to file the grievance.

After the grievance is filed, the NHL and NHLPA must hire a “systems” arbitrator to decide on the case. The process could take weeks, but several beat reporters believe both sides will want to quickly resolve the dispute. The arbitrator has 48 hours to give their decision after being hired.

If the arbitrator upholds the NHL’s rejection of the contract, Kovalchuk will become an unrestricted free agent. He would be free to restructure his deal with the Devils or sign with another team. Reportedly, the Kings are still interested in the left-winger, and offered him a 15-year, $80 million deal before he signed with the Devils. SKA St. Petersburg of the Kontinental Hockey League also offered Kovalchuk a four-year, $40 million contract.

If the arbitrator rules that the deal falls in line with the collective bargaining agreement and the NHL was wrong to reject it, the league would have to immediately approve and register the contract.

Kovalchuk and the Devils could re-structure the deal before that point, but neither sides seem willing to explore that option.

Keep checking Running With The Devils for any further news on the NHLPA’s decision.

The Devils and Ilya Kovalchuk still seem to be sitting on the sidelines and playing the waiting game. It would appear that the Devils are waiting for the NHLPA to make a move regarding Kovalchuk's contract. That move is something that could happen today or drag out through the weekend. The Devils have up until Monday to renegotiate a new deal with Kovalchuk, something Lou has said they aren't doing, or allow the NHLPA to file a grievance and send the matter to an independent arbitrator.

Obviously waiting to find out what happens with Kovalchuk's contract is holding up the Devils from shedding contracts in order to get under the cap, since we don't quite know what the cap hit WILL be once the Devils do have Kovalchuk signed to a legal contract that is recognized by the NHL. It's important to note that  Kovalchuk is still contractually linked to the Devils, even though that contract is not considered legal by the NHL. He is not a UFA and is not free to speak with other teams about a contract. If Kovalchuk wanted that, he could easily have that by not having the NHLPA file.

I don't expect much to change today and probably not much to change over the weekend but I do figure Monday we will get news that the NHLPA has filed a grievence against the NHL on the behalf of Kovalchuk and the Devils.

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While this whole Kovalchuk situation plays on, the Devils are inching closer to an arbitration hearing with defenseman Mark Fraser. His hearing is scheduled for next Friday and the Devils are working trying to avoid that hearing. Should be interesting to see what NJ does with Fraser. I don't know how he fits into the picture or what kind of demand he has around the NHL. I don't think an arbitrator will award Fraser a high number so if he wants to stay in NJ, maybe he should work something out before next Friday.

According to multiple reports, Devils general manager Lou Lamoriello knew the contract of Ilya Kovalchuk would be rejected before yesterday’s press conference.

The Devils were apparently notified Monday night, but felt comfortable going ahead with the press conference.

Lamoriello did not respond to the report, but believed the NHL was wrong for rejecting the contract.

“We are extremely disappointed that the NHL has decided to reject the contract of Ilya Kovalchuk,” Lamoriello said in a statement released by the team.  ”The contract complies with the terms of the collective bargaining agreement. We will have no further comment until the process outlined in the CBA is complete.”

The news coming from this situation continues to pour out. It’s a little odd to think that Lamoriello would go ahead with a press conference knowing the contract would be rejected the very next day. Apparently, according to these reports, that seems to be the case.

Where do the Devils go from here? Supposedly, the NHLPA is interviewing all parties involved in putting the contract together in order to determine whether to bring the case to arbitration. If the NHLPA decides to bring the case to arbitration, both the players association and the NHL would have to wait for an independent arbitrator to be hired and approved by both sides. That can possibly draw out the process.

Any way you slice it, I would bet the deal would be restructured to more closely match those of Marian Hossa, Henrik Zetterberg and Chris Pronger. That would probably mean a larger cap hit per season and possibly a decrease in years. Either way, it seemed like Kovalchuk only wants to be a Devil, and the Devils seem more than willing to make any potential deal work.

Last night, the Devils organization and its fans received some shocking news – that the NHL had rejected the 17 year, $102 million contract of Ilya Kovalchuk. The rejection came after a press conference to announce the signing, and it seemed both sides were moving on. Someone dropped the ball, whether it was the league or the Devils, but the situation raises a huge question – why reject the Kovalchuk deal while allowing similar deals to pass?

The two reasons given by the NHL for rejecting the contract was the last six years, which they called “bogus,” and the belief both Kovalchuk and the Devils understand he won’t play out those final six years. Therefore, the NHL believes the last six years only serve to drive down the cap hit, meaning the contract attempts to circumvent the cap. For all we know, that may be true. Maybe Kovalchuk would decide to retire before the end of the deal, and the Devils would save some money.

Tom Gulitti of the Bergen Record published the official quote from Deputy Commissioner Bill Daly.

“The contract has been rejected by the league as a circumvention of the Collective Bargaining Agreement. Under the CBA, the contract rejection triggers a number of possible next steps that may be elected by any or each of the NHLPA, the player and/or the club. In the interim, the player is not entitled to play under the contract, nor is he entitled to any of the rights and benefits that are provided for thereunder. The league will have no further comment on this matter pending further developments.”

This isn’t the first time a player has received a long-term, front-loaded contract where the back end drives down the cap. These deals are becoming more and more common, and while the NHL may want to ban them in their next collective bargaining agreement, the league shouldn’t be setting that precedent now. Below are two modern-day long term deals, which the NHL passed, to show that Kovalchuk’s contract should not be exception to the rule. All contract information can be found on CapGeek.com.

Marian Hossa – 12 years, $62.8 million ($5.275 million cap hit per season)

After signing a one-year deal with Detroit in 2008-09, Hossa received a long-term deal from the Blackhawks in the summer of 2009. The right-winger inked a 12-year deal, and subsequently won his first Stanley Cup championship after losing two straight. An important thing to note is Hossa’s age when he signed the deal. The right-winger was 30, meaning the contract would expire when he turned 42. For the first seven years of his deal, Hossa makes $7.9 million. That number drops significantly in the eighth year, with Hossa only making $4 million. In the last four years of the deal, Hossa makes $4 million combined.

Clearly, the Blackhawks front-loaded the contract to “circumvent” the cap. There may not be as many millions as Kovalchuk, but the Blackhawks used the same strategy as the Devils. Hossa will be 42 when his contract expires, and those last four years of $1 million drive down the cap hit. Yet the deal was allowed to stand by the NHL. Theoretically, the last four years of Hossa’s deal can be “bogus” years, because he may not play at the age of 38. Hossa’s contract structure is similar to Kovalchuk’s new deal, but was allowed by the league.

Henrik Zetterberg – 12 years, $73 million ($6.08 million cap hit per season)

Zetterberg is another example of these long-term, front-loaded contracts. Zetterberg re-signed with Detroit after a four-year contract expired in 2008. Remember to look at the age of the player. Zetterberg makes over $7 million for the first nine years of the deal, amassing the bulk of the contract. But in the last three years, Zetterberg will only make $5.35 million. When Zetterberg signed his deal, he was 28 years old, meaning the deal would bring him to the age of 40. Once again, one can argue that the last few years of the deal are “bogus,” and that Detroit used those last three years to circumvent the cap. Once again, the structure of the deal is similar to Kovalchuk’s deal, but the NHL had no issue with this specific contract.

Continue after the jump for the rest of my analysis on why the NHL was wrong in rejecting Kovalchuk’s contract.

The NHL has rejected Ilya Kovalchuk's 17-year, $102 million contract with the New Jersey Devils on the grounds that it circumvents the NHL's salary cap. Stayed tuned because this saga is going to get very interesting now. AJ and I will certainly keep you updated right here...

Update 10:28PM - It is believed the NHL rejected  the deal because the NHL doesn't believe either the player or the Devils expected he would be playing near end of deal. If the NHLPA grieves the leagues decision, the contract remains dead until an arbitrator decides otherwise

Under CBA, Player's Association has 5 days to file grievance, then arbitrator will decide

Update 10:07AM - NHL's official statement.  National Hockey League Deputy Commissioner Bill Daly today issued the following statement regarding the free agent contract forward Ilya Kovalchuk signed with the New Jersey Devils: "The contract has been rejected by the League as a circumvention of the Collective Bargaining Agreement. Under the CBA, the contract rejection triggers a number of possible next steps that may be elected by any or each of the NHLPA, the Player and/or the Club. In the interim, the player is not entitled to play under the contract, nor is he entitled to any of the rights and benefits that are provided for thereunder. The League will have no further comment on this matter pending further developments."

Basically the Devils have a few options. The could restructure the entire deal and refile with the league to see it is accepted. If the Devils feel they have a good case moving forward with the current deal, they can file a grievance against the league's decision, something they have 5 days to do. Should it go to an arbiter, I believe they have a good case because there are enough examples of guys playing into their 40's. If this does go to an arbiter and  he rules in favor of NJ, then the contract stands and the league MUST accept it but it the arbiter rules in favor of the league, the contract is voided and Kovalchuk becomes a UFA once again. If that happens, I guess we'll find out how much he really does want to play in NJ.

Like I said last night, this whole situation has gotten very interesting. I am trying to look at it from a hockey fan's point of view and not a Devils fan because looking at it as a Devils fan, I might get accused of being a graduate of the Michael Kay Homer School.

Today marked a great day for Devils fans. The team officially announced the signing of Ilya Kovalchuk, locking up the left-winger for 17 years, $102 million dollars. Management, players and Kovalchuk all took center stage during the press conference today (click here for video links and here for Kovalchuk’s statement).

The event was also marked with a potential mini-drama. When speaking to the media, general Lou

Lamoriello and owner Jeff Vanderbeek had interesting things to say about the deal. They were both extremely candid in their comments, something unseen at most times. Below are some of the more interesting quotes, which may show a break between general manager and owner.

The first quote comes from Lamoriello (per Gulitti), in which he stated that contracts such as Kovalchuk’s shouldn’t be allowed in the NHL.

“I would agree we shouldn’t have these,” Lamoriello said. “But I’m also saying that because it’s legal and this is something that ownership felt comfortable doing for the right reasons.”

There is a lot of ambiguity in this quote. Not once does Lamoriello use the words “we” or “I”. Instead, he puts the responsibility on the ownership. This was the first of many quotes like this throughout the press conference. It almost seems as if ownership pushed for this deal, and not Lamoriello. We’ve never really seen an ownership/general manager dispute, but clearly it seems like there was some disconnect over the deal.

Continuing on to the second quote, which deals with Lamoriello’s feelings on the length of the contract (once again, thanks to Gulitti for the quote).

Lamoriello said he “absolutely” rolled his eyes when the Islanders signed Rick DiPietro to a 15-year contract in 2006 and when Washington signed Alex Ovechkin to a 13-year contract in 2008. He also said he “absolutely” rolled his eyes when Kovalchuk’s contract was completed.

So why would he sign Kovalchuk to such a deal?

“You’d have to speak to ownership about that,” Lamoriello said. “The commitment that ownership has made here, this is a commitment and a decision they wanted to make for this type of a player and all I can do is say whether the player is a player that will fit into the team, can help the team and is not a risk as a player. As far as what the financial commitment is and that aspect of it, that was out of my hands.”

Once again, Lamoriello puts the responsibility on the ownership. He wouldn’t even take responsibility for putting together the deal, saying that ownership controlled the financial commitment to Kovalchuk. I’m sure that the Devils wanted to retain Kovalchuk, and Lamoriello was probably on board with that decision. But it seems that Lamoriello wasn’t on board with either the years or the money offered. Once again, I’ve never seen this type of disconnect between Lamoriello and management, but it seems there was something that didn’t click between the two sides.

Check after the jump for Vanderbeek's comments and my take on what these quotes really mean.

The Devils made the biggest splash of the off-season, re-signing unrestricted free agent left-winger Ilya Kovalchuk to the longest contract in NHL history. The signing ends a long period of anticipation throughout the league, but brings to light several potential issues for the Devils going forward. While I’m excited to have one of the game’s best scorers don the red, white and black, the signing also raises questions which need to be answered.

Kovalchuk’s Contract

Clearly, the biggest news comes from the terms of the contract. Kovalchuk will make $102 million over 17 years, with an annual cap hit of $6 million. The deal has already been approved by the NHL Players Association, and there’s no reason to believe the NHL will deny the contract. The deal won’t be the richest in NHL history (that honor belongs to Alex Ovechkin), but it will certainly put pressure on Kovalchuk. Kovalchuk, whether he wants it or not, will now have immense scrutiny on his every game. Scott Burnside  of ESPN already took the first shots, pointing out Kovalchuk’s lack of success in the playoffs. These criticisms will continue to grow if Kovalchuk doesn’t live up to the now immense expectations. By signing for 17 years, Kovalchuk committed the prime of his career to the Devils, who don’t have many big scorers and don’t usually play an “offensive” game.

But I think we saw some flashes of Kovalchuk’s ability and potential with the team last year. He averaged a point per game during the season, matching Zach Parise in that category. The winger also played a surprisingly solid defensive game, as explained in this piece I wrote exactly one month ago. While he will need to live up to huge expectations, I believe Kovalchuk already proved some of his worth to the organization. With players expecting John MacLean to institute a more aggressive system, I think we’ll see Kovalchuk continue to be an offensive force. Playing to the expectations of that contract should keep him motivated.

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The Long-Term Financial Impact

Kovalchuk’s cap hit each season will only be $6 million, which is a bargain for a great offensive player. But taking a look at the overall contract breakdown brings some concerns.

Kovalchuk’s contract breakdown:

2010-11: $6 Million
2011-12: $6 Million
2012-13: $11.5 Million
2013-14: $11.5 Million
2014-15: $11.5 Million
2015-16: $11.5 Million
2016-17: $11.5 Million (no-movement clause ends on June 30, 2017)
2017-18: $10.5 Million
2018-19: $8.5 Million (no-trade clause begins on July 1, 2018)
2019-20: $6.5 Million
2020-21: $3.5 Million
2021-22: $750,000
2022-23: $550,000
2023-24: $550,000
2024-25: $550,000
2025-26 $550,000
2026-27: $550,000

The back-end of the deal is clearly favorable to the Devils. In those last five years, Kovalchuk’s contract will be minimal. But it’s the next few years which worry me. Remember, Parise will become a restricted free agent next summer, and this contract will probably be used as a measuring stick for what Parise should make. General manager Lou Lamoriello is good at getting a little discount from players, but I’m sure that Parise will demand upwards of $90 million. Even though Travis Zajac has three years left on his deal, he’ll probably demand a few more million when he becomes an unrestricted free agent. Even Martin Brodeur will need to be resigned in the coming years. These players are the cornerstones of the franchise, and the Devils will need to give them raises while being responsible for the bulk of Kovalchuk’s contract.

Overall, I worry that Kovalchuk’s contract may tie up the Devils for the foreseeable future. I don’t want to see Zajac or Parise walk away from the team because Lamoriello doesn’t have the money to sign either player. While this probably wouldn’t happen, it’ll be interesting to see the long-term financial impact of his signing.

Continue reading after the jump for more analysis on the trade.