A review of Kovalchuk’s contract that I wrote for Puck Prospectus on Wednesday. I was away for a few days so didn’t have time to share it here until now.
Front Office Focus – Is the NHL doing the Devils a Favor with the Kovalchuk contract?
All H-E-double-hockey-sticks has broken loose with the NHL rejecting Ilya Kovalchuk’s contract with the New Jersey Devils. Kovalchuk has been free agency’s poster boy for the “superstar” looking for a mega-deal. He got it, and then some.
The Devils signed Kovalchuk to a 17-year contract worth $102M. The problem is that the last six years have such a deflated salary that it set alarm bells off in the NHL offices as a way to circumvent the cap.
The first 11 years of the contract total $98.5M, which would be a cap hit of $8.95M per year. With the final six years tagged on, the cap hit is only $6M per. Those “sham years” effectively saved the Devils almost $3M in cap space despite the fact that it’s highly unlikely Kovalchuk will play until he’s 44.
While there are other contracts that have used similar shrinking salaries over the final years of the deal, none were this blatant. The NHL picked this deal to draw the line and say enough is enough.
The real question, however, is whether this was a good deal for the Devils in the first place.
According to CapGeek.com, the Devils are actually $1.8M over the cap with Kovalchuk’s deal, and have only 20 players signed. Obviously they will have to move someone this offseason to make room. On top of that, they have Zach Parise as a restricted free agent next year. If they want to sign him to a long-term deal, they’ll need to make even more room.
The large contracts of Brian Rolston (~$5M) and Jason Arnott ($4.5M) are likely candidates, but their spots on the roster still have to be filled. These are obstacles but not insurmountable. Obviously if Kovalchuk’s cap hit escalates to the range of $9M per year, the problem gets much worse.
What about the value that Kovalchuk brings to the ice? He’s a dynamic scorer and powerplay performer, but how does he compare to other elite forwards?
The most comparable player to Kovalchuk with a recent contract is Nicklas Backstrom of the Washington Capitals. They’re not the same player, but are both recent signings, reflecting recent views of value in the NHL and have similar GVT levels over the past 3 years.
The table below shows the average performance of bo
th players over the past 3 seasons.
Both players have fantastic GVT ratings for a 3-year span and are excellent point producers, with the edge to Kovalchuk.
Backstrom has been a much better possession player (Corsi) but has played with much better teammates (QoT) and has actually faced much easier competition (QoC) than Kovalchuk. The big Russian has been the focus of every team he’s faced while Backstrom gets to lurk in the shadow of players like Ovechkin and Semin.
Kovalchuk’s Zone Starts, however, are misleading. Due to Atlanta’s poor team, they constantly started shifts in their own end. In his two full seasons with the Thrashers, Kovy actually had the 3rd and 4th best zone starts among Atlanta forwards.
Despite some of the negative (and well-deserved) press that Kovalchuk receives for his defensive play, the underlying numbers would tell us that he’s still a pretty good value with a cap hit of $6M.
The real concern for the Devils should be the length of the agreement. Forwards generally progress until their early to mid-twenties and hold that production level through their late twenties and early thirties. After that, their production tends to drop off quickly.
Backstrom was signed to a 10-year extension, but those years will be the prime of his career. The deal will expire when he’s 32.
Kovalchuk is 27 and has likely peaked as a player. He may get more production over the next 3-4 years than his career averages, purely from playing with a better supporting cast. That said, it is highly unlikely that he will perform at his current level for more than the first four years of the deal. That leaves 13 years left on the deal, unless he retires early which is quite likely.
Given his poor defensive play, he will need to be used mainly in offensive situations and on the powerplay, meaning other players on the Devils will have to play the tough minutes. Seemingly as a perfect match, Devils GM Lou Lamoriello signed two very defensive blueliners in Henrik Tallinder and Anton Volchenkov earlier in free agency.
At a $6M cap hit, Lamoriello appeared to have made the steal of free agency, a top offensive player at a cap number he could manage. Along with the signings mentioned above, it seemed as though New Jersey had locked up Eastern Conference contention for the next few seasons. Kovalchuk would likely retire as a Devil and they’d never be forced to eat any extra cap space.
Although once the NHL is done with the contract, it might be a $8-9M per year cap hit and the Devils will be forced to choose between the Russian sniper and several players already on their roster. They’re already $1.8M in the hole, so an extra $2-3M could render the Devils’ cap situation unholy.
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