Apparently, front-loading a 17-year contract is illegal. If you're like Bill Daly and Gary Bettman, and actually care about the "spirit" of the CBA (go tell that to a judge in a civil lawsuit case and see what happens), then Kovalchuk's contract is illegal. But if you're Daly and Bettman, isn't loaning a player to another league (Huet to a Swiss league, dumping his $5.6+M cap hit), sending an overpaid used-to-be defenseman to the minors to dump $6.5M+ (Wade Redden), and now, as Larry Brooks points out, the Islanders are using tactics of their own now. The Islanders are technically under the salary cap floor, which means that they need to add salary to their current salary cap to be at the minimum dollar amount required by the NHL annually. What the Islanders claim is that Alexei Yashin and Brendon Witt's buyouts allow them to reach the floor of the cap.
So my question to the NHL is what is circumvention and what is not? The current Collective Bargaining Agreement was strung together rather quickly to avoid a strike into its second season, but the loopholes in the CBA are damaging to the league and the union. The problem is now trickling throughout the league. The main issue is that the Devils were penalized for a loophole in the CBA that they took advantage of, but they still did nothing "wrong." No professional sports league can use the excuse of some "spirit" of a CBA. It simply doesn't work that way. It also seems that the league doesn't seem to abide by the "spriti" of the CBA, because three other teams are taking advantage of loopholes of their own. Nobody is even mentioning them, and league will not penalize them.
What the league is trying to do is not terribly obvious, but it appears that they are trying to make a statement to the NHL Player's Association, and that is: they have the power right now (partially due to the fact that they approved the second Kovalchuk contract, which avoided another arbitration hearing), and they are not going to negotiate to the union's level during the next CBA discussion in two years. The union lacks power, but now has a stubborn identity of its own in Donald Fehr.
I believe it was Pierre LeBrun that stated that Fehr saved the Devils losing salary cap space, as he negotiating relentlessly to the league during the second contract negotiation with Kovalchuk. (Sorry I can't find the link backup) This may be a step in the right direction for the NHLPA, but there is still a long way to go. Fehr needs to realize that this next CBA may have to concede some power this time around to avoid the dreaded lockout. No matter what the case is, the NHL and NHLPA realize that they simply cannot lock the league out at all...for a very long time.