A Devils Financial WOWY Discussion Around Ilya Kovalchuk

I think you’ve done a very good job of illustrating the cap crunch the Devils are in with Kovalchuk’s return. I’m not sure I entirely agree with your math — the way I figure it, add Kovalchuk (at the rumoured 7 years/$60 million, or a cap hit of $8.571m), subtract Salvador and Zubrus (without replacing them for the moment), and you have roughly $2.5 million on a roster of 10 fowards/5 D-men/2 goalies.

I could see the Devils not carrying a full complement of 23 players under this scenario, to give the team a little bit of wiggle room. With the AHL affiliate just up the road (so to speak) in Albany, it is possible to recall someone when they are needed and get them down to the parent club in a matter of a few hours — and even more quickly if ownership will spring for a private plane to bring them in. Not an ideal situation, but not unknown in the NHL these days. Calgary got themselves into a nasty fix after the Olli Jokinen trade two years ago…. they putshed themselves right up against the cap, and when they were hit by a couple of injuries, they were forced to ice lineups for several games that didn’t have a full complement of 20 players.

In hindsight, I wonder if the excessive money given to Hedberg was necessary — that million would come in handy if Kovy returns. Also, was the Arnott trade really necessary when it happened? He certainly fills a need, but I wonder if the opportunity to acquire him would have gone away just by waiting.

1: given that the bonus cushion exists, i think it’s best to view all the devils’ young players with their salary and bonuses separate. this brings the cap hit for corrente and henrique down to around 600k. also, hedberg has 500k worth of bonuses in his contract. small potatoes, but that adds up.

2: i think new jersey is going to try to front-load a longer deal (between 12 and 17 years) where the cap hit would go down. if we can get kovalchuk at around 6M, we can lose salvador and zubrus/langenbrunner and be under the cap with a full complement of players.

3: wrt acasser’s comment, i still like the arnott trade, as at the time it didn’t look very likely that new jersey would get kovalchuk. now that the kings have appeared to reject him, it’s only at this point that new jersey has been able to jump back in. the devils have needed a true 2nd line center since nieuwendyk left.

I think we’d be better off letting Kovy go. He’s a great talent but it’s not worth all the trouble it would cause with the cap.

There are some nitpicky details cited above like not carrying a full roster which I agree with which can help out with small amounts of money here and there. My personal take is that there are some LARGE X-factors which can completely alter the assumptions you’re working with.

(1) First is the actual cap hit of the deal. A cap hit of 8.5 million is simply intolerable, no matter how short or long the term. If the rumor about LA’s offer of 12 yrs at a cap hit around 6.5 is true, there’s no reason to think the Devils have to go anywhere near a 8.5 cap hit.
(2) The second wild card is Lou’s willingness to ask/force players to waive their NTCs or to send them to the minors. The likely casualty here is White, who is not only less valuable to the team than Langenbrunner, but whose contract extends for another year beyond this season. Trading/waiving White would not only open up space for Kovalchuk this year but also give the Devils flexibility next summer when they have to re-sign Parise and Greene.
(3) Then there are the kids. If some of the kids expected to be ready (Josefson, Urbom who by the way isn’t listed on your possible roster) aren’t actually ready, more changes can be expected, but those wouldn’t come until just before the season starts.

As far as Kovalchuk’s actual value, this is what I figure. I start with the question, What could he get if, every year, he signed a one year contract? I figure that with every team in either a cap crunch or a budgetary crunch, his real market value for a one year deal is only about 8 million right now to play with a contending team. For argument’s sake we can say it’s 9 million for the next 5 years, until he’s 32. Then let’s say it’s 8 million for 3 yrs after that, until age 35. Now, after age 35, let’s say it then declines 0.33 million for every year after that, i.e. he could earn 7 million up to age 38, 6 million up to age 41. It sounds like a lot at that age, but in reality with the way the cap goes up, these numbers will not seem so large 10 yrs from now.

To get at reasonable numbers for a long-term contract, if I add up the numbers year by year and then administer a 10% cut in exchange for the stability of a long-term contract, let’s see what happens. For five years, I take 9 × 5 = 45….subtract 10%…..40.5. For six years, I take 9 × 5 + 8 = 53….subtract 10% gives 47.7. And so on.
5 years – 40.5 M – 8.1 M cap hit
6 years – 47.7 M – 7.95 M
7 years – 54.9 M – 7.843 M
8 years – 62.1 M – 7.763 M
9 years – 69.0 M – 7.667 M
10 years – 75.6 M – 7.56 M
11 years – 81.9 M – 7.445 M
12 years – 87.9 M – 7.325 M

If I’m Lou, these are the numbers I present to him. I think the assumptions are reasonable and that the numbers overall are fair compensation – more than fair, since 10% is not a big price to pay given that you have stability for yourself and your family, as well as insurance against injury. It’s significantly more money than what LA was reported to be offering. And if the contract is front-loaded, that’s even more value for Kovalchuk. If he can’t accept these numbers, then honestly he’s a fool and has no idea what the market can bear – especially the market consisting of contending teams.

Maybe the hold up in the signing has to do with Langs or White. Maybe just maybe Langs or White have a couple of teams that they would waive their no trade clause too? Lou would have to then get those teams to take on White or Langs.

The only way I see the Devils getting Kovalchuk is if we trade Zubrus and Salvador for players who along with White or Langs go to the team that White or Langs will only waive their no-trade clause.

I am going to guess Lou has been working on this since the Cap numbers came out. But would still take a lot of time to get actually done.

I don’t want the Devils to be in the position to not bring up the young players because of money.

I know the tendancy is to look at this deal in the perspective of the 2010-2011 roster and the devastation that will have to happen to work the cap; that we have to win the Cup in the next two years with Marty; and this deal is being considered to win now . But think about it – if Lou lands this guy until he is 39 he is the franchise for a long time. This is a first overall pick that panned out, and is in the prime of his career. The best free agent ever to come on the market. When this opportunity comes, you swing for the fences, you structure a good deal (long term, more reasonable cap hit), and you construct your squad around him over time. In reality, if you look at this short term, money and cap issues aside, signing him makes no sense from a team structure perspective – I mean there are too many good left wings.

I think Lou is starting to build the next Devils team – anchored by Volchenkov and Kovy, Parise and Zajac, Josefson and Tedenby, Corrente and Urbom. The big names with the big contracts (Rolston, Arnott and White) will ride off into the sunset soon enough.

suspects, lol.

i say, at this point, dump the attempt on kovy and let him sign with the KHL, because they are the only ones, besides the “attempt” the islanders made, to pay him as much money as he would want. then trade salvador and zubrus :( , maybe find a way to get rid of rolston, to clear some cap space and give a qualifying offer to Marc Staal. hes still an RFA and through my research hes looking for about 3.5-4mil and year for 3-4 years but rangers aren’t giving into it for some reason. if we dump some of our bad contracts and let our well-developed prospects step up (josefson, tedenby, etc.) and maybe sign some cheap UFA’s to fill in spots, we would still have all solid lines (and with the possible addition to marc staal-OFD) and a very strong defensive core of volchenkov, greene, tallinder, staal, white, and fraser/eckford/corrente/urbom. i know thinking about this the lines might not be “perfect” but i didnt think of possible lines so if anyone thinks this sounds pretty good then help me out here

The funny thing is between viewers and ticket sales Kovy would bring in well over 10 mill. Between the minutes he logs, his style of play, and effort I would say he is only beaten by Crosby and Ovetchkin in terms of attracting fans. He has proved himself a good goal scorer (since he came to the league only Ovetchkin has scored more goals).
To a team in desperate need of sales (Islanders, Atlanta) he is worth 10 million a year

The problem is his defensive and team play is questionable, although watching him play the end of the season I believe he showed enough talent to overshadow those defects. He also showed he worked well with players like Elias, Zajac, Rolston.
In terms of play production he is probably worth 7-9M a year.

While as many people stated 10 mill a year isnt viable for the devils (unless we get a long term, front loaded host contract like that 100 mill over 17 yrs retire in 10)
If Kovy goes down to lets say 7.5-8.5 over 5-7 (normal contract) he is definantly worth it.

BTW he may not want to sign here first choice but remember Stevens after we acquired him from blue (Because ther signed RFA Brendan Shanahan) didn’t want to play for the devils and almost retired early and turned out to be a vital player in three cups.