If anyone hasn’t heard, last night the NHL rejected the Ilya Kovalchuk 17-year contract from the Devils. The reasons this happened was that it was seen as an attempt to circumvent the salary cap. I am not going to get into the semantics of whether the contract was good or if it was a shame. That horse has been beaten to death. Instead I think it is about time to discuss a solution to be able to stop these ludicrous contracts from being awarded. This problem goes beyond that of the Kovalchuk, since the outset of the Cap Era NHL teams have done what they can to get around the cap. This is not the first contract we have seen like this, maybe the most blatant, but certainly not the first. Marian Hossa, Chris Pronger, Henrik Zetterberg and Roberto Luongo all received similar contracts in the last few years that added the “phantom” years on to the end of the contract in order to lower the cap number. This was something that needed to come to an end. I for one am glad that the NHL has put an apparent stop to these contracts at least for the time being. Unfortunately, come next CBA this is bound to be a touchy situation, one that may help lead to a work stoppage. This is something no fan wants to see and more than likely would seriously damage the NHL. It is for this reason I devised a plan to help teams be able to retain assets without worrying about the Cap. The NHL should adopt a version of “The Larry Bird Rule.
For those who do not know what The Larry Bird Rule is here is the definition:
A salary cap exception, it is so named because the Boston Celtic were the first team permitted to exceed the salary cap to re-sign one of their own players (in that case, Larry Bird). Free agents who qualify for this exception are called “qualifying veteran free agents” or “Bird Free Agents” in the CBA, and this exception falls under the auspices of the Veteran Free Agent exception. In essence, the Larry Bird exception allows teams to exceed the salary cap to re-sign their own free agents, at an amount up to the maximum salary. To qualify as a Bird free agent, a player must have played three seasons without being waived or changing teams as a free agent. This means a player can obtain “Bird rights” by playing under three one-year contracts, a single contract of at least three years, or any combination thereof. It also means that when a player is traded, his Bird rights are traded with him, and his new team can use the Bird exception to re-sign him. Bird-exception contracts can be up to six years in length
It is something that the NBA has had some success with over the years and players have generally been accepting of this exceptions. The pundits will say the owners will never agree to this because it creates a “soft cap” or a cap in which some exemptions would allow a team to go over. Now in a way that is what the NHL has in effect, they allow players to go onto Long Term Injured Reserve to be a cap exemption already. So creating a soft cap is not such a bad idea. Here is the outline plan I have for “The NHL Larry Bird Rule”
A) An Exemption can be granted only to a player drafted and develop by said franchise.
B) An Exemption can be granted to no more than one player and while said player is under contract no other player can be offered exemption status until the term of the contract expires. At that time said team can either give exemption status to another player or back to the player whose contract just expired.
C) This Exemption status does not give a team exclusive rights to the player, said player is still eligible to negotiate with other teams if he so chooses, however no portion of his contract will be allowed to supercede the salary cap, when signing with another team.
D) The Exemption status automatically installs a no trade clause into the contract for the term of the contract, as to not allow the team to sign the player and trade him to another team so that team then can circumvent the cap.
E) The term of the Exemption contract can be no shorter than 4 years and cannot exceed 7 years.
F) The Exemption contract cannot exceed the cap by more than 5% IE if the cap is at $50 Million a team can only spend $2.5 million over the Cap on that contract. So in essence if the player has a salary of $7.5 million a year only $5 million will count against the cap.
G) If a player is an Unrestricted Free Agent on a team that he was not drafted by and would like to go back to the team that drafted him, the player would not be granted Exemption. Any chance of Exemption is voided after the player leaves his original team, no matter the method whether it is through trade, free agency, waivers or defection.
By adopting my proposed plan, the NHL would be able close the loophole left open by the extended contracts with :phantom” years. It also allows teams to reward their best homegrown talent’s loyality, by paying the player more than other teams would be able to. It helps the team to keep the talent they invested time in money in, by allowing them to make a portion of the player’s contract exempt of the cap. Now people will say how would this have an effect on a situation such as the Kovalchuk contract in New Jersey. That is simple, one of the main reasons Kovalchuk has to be signed to a lower cap hit is because Zach Parise is up for free agency next season. If there was a “Larry Bird Rule” the Devils could then sign Parise to a higher contract at a lower cap hit. Thus making it easier to retain him and Kovalchuk.
Now I am not claiming that my plan is perfect. I am sure there are loopholes and finer points that would need to be worked up by the NHLPA and The NHL Legal Department, but I tend to think it is a step in the right direction. I know that there could be revisions made and that a better plan could be put in place by more qualified people, but it offers a guideline of how the NHL could fix what has become an ongoing problem. As always I would love to have you guys weigh in and comment on this idea or if you have ideas of your own, please post.