NHL Deputy Commissioner Bill Daly Provides Some Clarification on the New "Line in the Sand"

Three days ago, I read the ruling made by arbitrator Richard Bloch to understand his reasoning and it left me with one very important question: What are the limits for future standard player contracts (SPCs); what is the "line in the sand?" We know that a combination of aspects of the now-rejected contract between the New Jersey Devils and Ilya Kovalchuk were unacceptable; but that doesn't clearly state exactly what's wrong.  Especially considering that other front-loaded contracts are under NHL investigation and Bloch even called them out in his ruling.    At the time, I concluded that it could very well be whatever the NHL says is acceptable.   Comments ensued, but ultimately, no real answer came about.

The next day, an important clue came about what that "line" could be. According to Damien Cristodero at TampaBay.com, the NHL had "no issue" with Vincent Lecavalier's contract extension. (Hat-tip: Puck Daddy) A deal, spelled out here at CapGeek, that guaranteed Lecavalier 97% of the total amount of the contract in the first 8 years ($82.5 million) and only $2.5 million total in the final 2 years; a deal that takes him to age 40 but can retire and have the cap hit removed off the books at any point; and has a no movement clause all the way through.  This deal was acceptable. Kovalchuk's was not.  However, it's still a mystery as to what will and will not be allowed going forward. The answer is likely somewhere in the middle.

Enter Bill Daly.   Thanks to Steve Lepore, who interviewed him at Puck the Media earlier this month on media matters that I think you should read, I was able to get in contact with the NHL deputy commissioner and chief legal officer.  For all intents and purposes, Daly is the #2 man in the NHL, right behind Gary Bettman.  If anyone knows what's going on about this issue, it's him.  So I decided to ask Daly about it in the hopes of some clarification; just two questions to clear up the issue.  I'd like to thank Mr. Daly for taking time out of his day to answer my questions and for his agreement to let me post this up.  My correspondence with him follows after the jump.

The following was exchanged via email earlier today:

***

John Fischer:   I've read and understand the reasoning of Richard Bloch's ruling that sustained the NHL's rejection of the New Jersey Devils' contract with Ilya Kovalchuk.  However, between the ruling (p.15-16 in particular) and the broad view of Article 26.3, it is ambiguous as to what the "line in the sand" is now for future SPCs.  What would cause a contract to be unacceptable in the league's view going forward?

I know it was reported two days ago that the league has no issue with Vincent Lecavalier's contract; so the "line" could be somewhere in between the parameters of both SPCs.  However, I'd like your or the league's opinion on this issue.

Bill Daly: While we do look (and have looked) at each contract individually, your suggested approach is the right one.  There are a number of "guideposts" already out there from which Clubs can guide their conduct.  No one factor is determinative, but all are important.  How long is the contract, what is the player's age at the time of the contract's "expiration", what is the value of the contract in its "back-end" and how does that compare to its "front-end" and its resulting AAV, what are the other relevant structural elements of the contract?  All are relevant questions. And while this may sound subjective and ambiguous, its really not that much so.  The Clubs are all very familiar with these considerations and know where we draw the line.  Hope that helps. 

(Disclosure: I asked a follow-up here but it wasn't really answered - only that I can put this up, so I re-stated it here.)

John Fischer: Excellent, thank you.  Before I put anything up; I just want to make sure I have this right: There won't be any public statement of what the limits are; but all the clubs know what they are.  Moreover, they consult the league if there is a concern in advance of offering or registering a SPC.  Is this correct, or is there something wrong or missing?

Bill Daly: Yes, with one caveat.  At this point I wouldn't rule out the possibility that we may further discuss with the Union to see if "bright lines" can be established.  Absent those "bright lines," it will be on a case-by-case, with existing guideposts established, the GMs understanding our concerns and sensitivities, and always with the ability of the Clubs to reach out to us to dicuss [sic].

***

Again, I would like to thank Bill Daly for taking the time to even answer my questions, much less put them here.

It may seem like he didn't really answer the question, but at the same time, I feel Daly clarified quite a bit. First off, and most important, he did state that the clubs (all 30 teams in the NHL) now know what is and isn't acceptable.   I do wish the guidelines were public; but I'm not terribly unhappy about this.  To me, it's re-assuring.  I can understand why the information may not be public; there's no reason for you and I to know what the parameters are since we're not signing players.  But the teams are the ones who need to know what the limits are, and they do know what they are now per Bill Daly.   Plus, the parameters the league reviews and has reviewed are varied.  Without specific, explicit limits in the CBA, they really can't be much more than just guidelines. Especially since Bloch's ruling was based on a combination of parameters leading to his conclusion of intent of circumvention; singling out one or two may not be feasible at this juncture.

Second, Daly did state that they could address the issue with the NHLPA to actually establish these guidelines to print.  I personally would love to see this happen.  Everyone would be on the same page until the next CBA, if nothing else.

Did he provide a definitive answer? No.  But at least we know more than what was stated, and the NHL hasn't ruled out working with the NHLPA, which could cool the initial concerns surrounding it going forward.

Are you pleased with Daly's answers? What follow up questions would you ask Daly? Isn't it great that the #2 man in the NHL is willing to answer questions just by email? Let me know what you think about this in the comments.  Thanks for reading.

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