Saturday, July 31, 2010

Uh-Oh: NHL Could Move to Challenge Hossa, Luongo & Others

If the NHL wins the Kovalchuk case, it could turn around and challenge other contracts it previously approved. That means that contracts signed by Luongo, Hossa, Zetterberg, Franzen and Savard, to name a few, could be open to review.


How is this possible? How can contracts that were approved by the NHL a year or more ago now be up for review and possibly voided?

For the answer, we need to turn to the CBA. Under Section 26.10(b) of the CBA, the NHL can investigate a possible circumvention even if the player's contract has been "approved and registered". On top of that, Section 26.10(d) provides that there is no time limitation barring an investigation ("There shall be no limitation of time barring the investigation of a Circumvention by the Commissioner).

Understandably, some player agents are very concerned that the NHL may challenge previously approved contracts if it succeeds in the Kovalchuk case. Hossa anyone?

The next question is whether the NHL would succeed if they tried to void previously approved contracts. Tough to know; however it probably won't be easy. At law, the principle of reliance is really important. If a player can show that he relied on the fact that the contract was approved and structured his life accordingly with the very reasonable expectation that the contract would be honored, then it may be tough for the NHL to go back and prevail.

The player could argue this: "After I signed the contract, and relying on the fact the NHL approved it, I went out and bought a house, a couple of cars, a jewel-encrusted ice bucket and 20 minutes with the cast from The View. Now you're saying a year later that my contract is no good? What do I do with all this debt I now have? And what do I do with Joy Behar, who won't leave my house and keeps prank calling Star Jones?".

So in theory the NHL could challenge some of these older contracts - and agents are worried. In practice, though, the NHL may face some legal challenges.

Friday, July 30, 2010

AUDIO CLIP: Arbitrator Appointed in Kovalchuk Case

Here is my discussion with Steve Lloyd and Lee Versage from the Team 1200 moments after our breaking story that an arbitrator was appointed in the Kovalchulk case. I discuss how the NHL could challenge previous contracts if it is successful on Kovalchuk challenge:

BREAKING NEWS: Arbitrator Appointed in Kovalchuk Case

3:42pm - An arbitrator has been appointed in the Kovalchuk case, although no formal announcement has been made.

I think I just broke my first story.

Decision in Niemi Arbitration Due Saturday

According to Yahoo!, the arbitrator's decision in the Niemi case is coming this Saturday. If it's too high, it's expected to set off a chain reaction for the Hawks.

The arbitrator can choose either side’s offer, or any amount between the two. Hawks GM Stan Bowman had the following to say:

“The arbitrator will make the ruling, I believe, sometime on Saturday. At that point we have 48 hours to accept or walk away from the award, or trade the award."

Bowman added,

“To be simple, it will depend on what the number is,” he added. “I’m not going to get into the dollar amount. Our cap situation is tight. Depending on where it is, it will drive the boat.”

The Changing Face of Arbitration

Hawks goalie Antti Niemi went to arbitration this past Tuesday. This case represents that changing face of arbitration.

Before the salary cap was put in place, we would often see a team take a player to arbitration if there was a dispute over the perceived value of that player (please see Harry Sinden's Dear Diary entries for examples).

Now, with the pressures of the salary cap bearing down on teams, NHL clubs may not necessarily disagree with the worth of a player; however, they are taking players to arbitration as part of an overall strategy to manage the salary cap.

So it's becoming less about a dispute over a player's worth and more about managing the cap.

In the case of Niemi, the Hawks may walk away from the goalie if the award is somewhere north of $2.5 to $3 million. If they do walk, they may zero in on Jose Theodore as a possible replacement. There are also rumblings that they may try and make room for Niemi by trading Tomas Kopecky and his $1.2 million dollar salary. It's unclear where all this leaves Patrick Sharp.

It is clear, however, that the pressures of the salary cap have left the Hawks without Stanley Cup winning teammates Dustin Byfuglien, Brent Sopel, Ben Eager, Andrew Ladd, Kris Versteeg, Colin Fraser, Adam Burish, John Madden and recently acquired Marty Reasoner.

Thursday, July 29, 2010

A Couple of Misunderstandings on Kovalchuk Case

On the Kovalchuk case, I've been seeing two points being raised a lot that need to be clarified:

1) Not 48 Hours: The arbitrator won't have 48 hours to decide the case. As per Section 26.13 of the CBA, the arbitration hearing will last up to 7 days, and thereafter, the arbitrator will have 3 days to issue the decision. These deadlines can be extended. The decision can also be rendered in less time.

2) No Need for Smoking Gun: The NHL doesn't need a smoking gun to successfully establish that the Devils/Kovalchuk circumvented the cap. By smoking gun, I mean direct evidence (such as emails and faxes) that on its face directly demonstrates that the parties intended to artificially push down the yearly salary cap hit.

As per Paragraph 26.3 of the CBA, in order to succeed, the NHL must show that the Devils/Kovalchuk intended to circumvent the cap OR that the effect of the contract is to circumvent the cap.

Intention can be tough to show. However, the arbitrator is permitted to consider "circumstantial evidence" (or indirect evidence) in making its decision - Section 48.5(d). The NHL could argue that the surrounding circumstances (long contract, throwaway years, age of Kovalchuk at end of contract) are such that the arbitrator can infer that the parties intended to circumvent the cap.

The NHL could also argue that the effect of the contract, intention aside, is to circumvent the cap. This is the stronger of the 2 arguments (i.e., intention vs. net effect).

If you want a fuller discussion of the process and substance of these proceedings, please scroll down.

Video Tribute to the Expos - A Must See

For those who still love the Expos, or for those who just like to look back, watch this video. If you're an Expos fan, get ready to feel remorse and joy all wrapped into one.

Paraphrasing Dave Van Horne, to Rusty, Stoney, Frenchie, LP, Rock, Scotty, The Cat, The Hawk, Walk, Cliffie, The Kid, Spaceman, Woody, Elly, Gully, Tito, Mcgaff, Scoop, Pedro, Eli, Marquis, Mo, El Presidente, Rondell, Jose, Vladi and Felipe:

Vick: Avoids Suspension or Banishment from NFL; “I'm on thin ice"

This could have been the end for Michael Vick. Vick knew it and so did Tony Dungy.

Vick dodged a suspension or possible banishment from the NFL after an investigation by Commissioner Roger Goodell cleared him.

Let’s look back at what happened. Vick allegedly got in a confrontation outside a Virginia Beach nightclub following his 30th birthday party - a situation that developed before a shooting that left Quanis Phillips wounded. No charges were filed and law enforcement officials have said that Vick was not a target of an investigation.

Phillips you might remember was a co-conspirator in the dogfighting enterprise that sent Vick to jail. On top of that, Vick couldn’t leave the state of Pennsylvania. He was denied travel privileges by probation officials after missing a pair of schedule meetings.

After this latest incident, it was open for the NFL to suspend or banish Vick under the NFL Personal Conduct Policy. The Policy is designed to help control off-field behavior by its players and preserve the league's public image. The Policy, introduced by Commissioner Goodell only applies to the player's personal lives and image in the public spotlight. The NFL conducts separate investigations for drug and alcohol abuse and performance enhancement.

Vick was potentially a repeat offender, which is expressly covered by the Policy and calls for swift action. As far as penalties, the NFL can suspend or even banish a player from the league: 
Discipline may take the form of fines, suspension, or banishment from the League and may include a probationary period and conditions that must be satisfied prior to or following reinstatement. The specifics of the disciplinary response will be based on the nature of the incident, the actual or threatened risk to the participant and others, any prior or additional misconduct (whether or not criminal charges were filed), and other relevant factors.
As we saw with Ben Roethlisberger, you don't need to be charged with anything for the NFL to invoke the Policy. Just problem behaviour unbecoming of an NFL player can do it.

After being cleared by the NFL, Vick released the following statement:
"I knew the facts. I knew I didn't do anything wrong." But he also added, "I know I'm on thin ice."
Vick also spoke with Tony Dungy, a conversation that Vick characterizes as anything but pleasant:
"… it wasn’t a pleasant conversation with Tony. … And it was hard for me to keep my composure because I knew what happened and I knew I never should have put myself in that situation. I probably never cried more in a 24-hour time span than I did (before) in my entire life because I knew that I hurt a lot of people.
"I'm definitely on my last chance," he said.
Lost in all this is whether Vick can still be an effective football player. By many accounts, he has shown up to camp in great shape, and with an unproven Kevin Kolb at QB for the Eagles, Vick could do good things this season.

First, though, he needs to stay clear of trouble - or, more importantly, anything that looks like it.

Wednesday, July 28, 2010

Burke, Leonsis Not Fans of Kovalchuk Contract

"I don't like the structure of the deal," Leonsis said. "I don't think it's right, but I don't have a say in it. But I don't know of other wings that are playing when they're 44 years old, so we'll see what happens."

The Capitals signed Alexander Ovechkin to a 13-year contract worth $124 million in 2008. The contract will pay Ovechkin $9 million per year for the first six years and $10 million per year for the following seven. The deal comes with an annual salary cap hit of roughly $9.5 million. This compares to the $6 million cap hit on the Kovalchuk contract.

The contract does not have any throwaway years like the Kovalchuk contract. However, don’t forget that Overchkin signed the deal when he was 22 years old, so it would have been tough to add throwaway years on a 13 year deal as he'll only be 35 when the contract expires.

Of course, Leonis could have signed Ovechkin to a 22 year deal, and included throwaway years - but did not. This is where Leonis takes issue – he feels like the Devils are not competing on an even playing field.

“I don’t believe these players are going to play in their mid-40s. And I don’t believe they’re going to play for what they’re making in those final years. So it defies logic. It may not defy the CBA. But it defies logic to think that players are going to serve the term of all these contracts. So that’s why we don’t do them. And a number of teams don’t do them. If the league thinks that this is one that they need to look into, then we support that.”

Burke added,

“Do you admire a criminal lawyer who gets a murderer off on a technicality?” Burke asked Monday. “So why would there be admiration or appreciation for finding a loophole that somehow defeats the purpose of a collective bargaining agreement that’s designed to put teams on the same footing?”.

Burke concluded with,

“I have no problem with long-term deals if they’re straight across the board, but not if the last few years are designed to reduce the cap hit and nothing else,” he said. “I’m not being critical of other teams that do. But if a team has four guys on contract like that, they’re actually icing a team with false values on their players. And if another team is playing it square, then you’re losing ground.”

Note this distinction: the issue is not only that Kovalchuk won’t likely play until 44; it’s more his age at the tail end of his contract together with the last 6 years on the contract paying him nearly nothing (relatively speaking). These two factors suggest the contract, the NHL would argue, was designed to artificially lower the cap hit – and for no other reason. Remember if the contract had Kovalchuk playing until 44 BUT he was fairly compensated in those latter years, we wouldn’t have an issue today.

To put it in perspective, right now the cap hit on the Kovalchuk contract is $6 million a year. If you remove the last 6 years (at $3.5 million) then the salary cap hit climbs from 6 million to about $9 million.

It doesn't help that if Kovalchuk is still playing at 40, he would be making $550,000. Marc Recchi just signed a 1 year deal valued at $1 million with the Bruins taking him to the age of 43 (he turns 43 in February 2011). Adjusting Kovalchuk’s salary in 2021 for inflation, the $550,000 he is slated to be paid seems quite low.

And the Devils can buyout the last 5 years of his contract and spread the cap hit across twice that time - 10 years. The cap hit would be nominal.

So the ultimate question comes down to this: why was contract designed the way it was?

Tuesday, July 27, 2010

Arbitrator's Powers in the Kovalchuk Case: Making the LA Kings & Isles Appear?

The arbitrator in the Kovalchuk case, whenever he or she is appointed (could in theory be up to 120 days from now), will have wide discretionary powers in handling the case and making a ruling.

Under Section 26.13(b) of the CBA, the arbitrator has the authority to force “the attendance of witnesses and the production of documents”.

This means that the arbitrator can require the production of things like emails, faxes and telephone records.

On top of that, as per Section 48.5(d), the arbitrator may find that a circumvention has occurred “based on direct or circumstantial evidence”. Circumstantial evidence casts a pretty wide net. It's evidence that calls on the arbitrator to make a deduction to conclude that a fact exists, such as the parties intended to circumvent the CBA by adding a bunch of throwaway years at the end of the contract. In contrast, direct evidence supports the truth of an assertion directly.

The arbitrator could therefore require the Los Angeles Kings to appear and produce documents since they were involved in contract negotiations with Kovalchuk and may have something relevant to contribute. If it’s indeed accurate that the New York Islanders were involved in the Kovalchuk sweepstakes, they could also be called or asked to produce relevant documents.

In case you’re wondering, it’s not open to the arbitrator to call LeBron James as a witness and demand that he explain why he chose the phrase “I'm going to take my talents to South Beach” rather than just say, "I'm going to the Heat". I wouldn't mind the explanation though.

Morning Show & Kovalchuk: Radio Segment

If you would like to listen to my on air segment with JR and Jim on the Team 12000 this morning, please click on the link below. We talk about the NHL's end game and why this case is important for the NHLPA and the NHL.

Monday, July 26, 2010

Kovalchuk, The CBA & The Grievance - Radio Segment on the Team 1200 Summer Scratches

If you want to listen to my conversation with the Summer Scratches on the Team 1200 on the Kovalchuk saga and the next steps under the CBA, please click on the following link:

Next Steps & Timeline on Kovalchuk Grievance

Now that the NHLPA has filed its grievance, here are the next steps:

1) Once an arbitrator has been appointed, the case will be heard and decided within 7 days, and 3 days later the official decision will be rendered. So in all, we are looking at 10 days, although it could be less (Section 26.13 of the CBA).

2) The parties can mutually agree to extend the deadlines so nothing is in stone from a timing perspective.

3) Wild card - the appointment of the arbitrator. Under Section 48.5(a) of the CBA, the parties have 60 days to agree on an arbitrator. The arbitrator "shall be an attorney with significant experience with matters requiring financial sophistication and business/accounting expertise and as an arbitrator or judge or other decider of contested proceedings." - Section 48.5(b).

This will need to be someone both sides feel is competent to do the job. If the parties cannot agree on an arbitrator, then they both nominate a Dean of a law or business school, and the two Deans then have 60 days to appoint an arbitrator.

So in theory, this case could take up to 4 months. However, this case going into November is highly unlikely. It is in the best interest of both the NHL and NHLPA to resolve this matter as quickly as possible. Having this drag on for months won't be seen as a positive for either side, and particularly for Kovalchuck, who I suspect just wants to play hockey.

If you want to hear my melliflous voice on this topic, please tune in to the Team 1200 today at 4pm.

NHLPA Files Grievance

We're off - as expected, the NHLPA is challenging the NHL on its rejection of the Kovalchuk contract. Here's the NHLPA press release:


“The NHLPA has filed a grievance disputing the NHL's rejection of the Standard Player Contract between the New Jersey Devils and Ilya Kovalchuk. Under the terms of the CBA, the NHLPA and Mr. Kovalchuk are entitled to an expedited resolution of this matter. The NHLPA will have no further comment until this matter has been resolved by an Arbitrator.”

Kovalchuck Decision Should Come Soon

We should find out today if Kovlachuk and the NHLPA will be challenging the contract.

As we learn more about this story, arbitration seems possible.

Since the story broke, sources have reported that the league informed the Devils it planned to reject the contract before it announced the signing last Tuesday. Nevertheless, the Devils went ahead with a Tuesday press conference announcing the signing. That suggests that battle lines were being drawn.

As well, the Devils recent statement that it hopes things "work out" does not make it sound like the Devils are looking to restructure the contract and that it may be up to Kovalchuk and the NHLPA to challenge the NHL:

“We hope it works itself out,” Devils coach John MacLean said in an interview on NBC “It was a great press conference for Ilya to sign that deal and unfortunately the league said it wasn’t up to standards for them, so we just have to wait and see how it works out. But we’re hoping that it works out in our favor.”

This is consistent with my previous posting where I argued that the Devils would not likely contest the ruling.

The NHLPA's mandate is to safeguard the best interests of the players. Its website says it best:

"...the NHLPA’s principal role is to represent the players of the National Hockey League and to guarantee that their rights as players are upheld under the terms of the Collective Bargaining Agreement."

The NHLPA will look to decide whether taking this case to arbitration and forcing a decision is in the best interest of the players. It may not be comfortable with leaving this ruling unchallenged as doing so may effectively bar future contracts that are the same or similar. It could also make things more difficult in 2012 should the NHL push for maximum year contracts, or otherwise seek to address these long term deals.

Of course, we can't forget about Kovalchuk. He will need to decide what makes the most sense for him. Are there other better offers out there for him? Does he want to fight? A relevant factor here, however, may be that the NHLPA wants to challenge the decision. Leaving the ruling unchallenged may do the payers, as a whole, more harm than good. That is something that Kovalchuk may be sensitive to.

There is a lot to consider here. At the end of the day, with all the pros and cons laid out before them, the NHLPA may end up going to arbitration. It may conclude that to let the NHL's decision stand unchallenged is not in the best interest of the players. And we can't forget that the NHLPA does have good arguments to make (see previous postings).

So arbitration, at this point, seems like a possible outcome. We should, however, know more soon.

Stay tuned.

Sunday, July 25, 2010

Around The Web In 80 Seconds - What They're Saying About Kovalchuk Saga

Here are some good articles on the Kovalchuk saga. Based on the first one from the Star-Ledger out of Jersey, the NHLPA may be considering a fight. The links to the stories are embedded in the text. Happy reading.

From the local Jersey Paper, The Star-Ledger

Rich Chere: Lamoriello says “we’ve done nothing wrong” and now it’s over to the NHLPA. Sounds like a fight may be brewing.

Rich Chere: Writes about how the Kings could get back into the thick of things.

Mike Mazzeo: Breaks down similar contracts.

Mike Mazzeo: Discusses that Zach Parise is in holding pattern for now until this contract dispute is resolved.

Ledger Staff: Fans react (good reading)

LA Times Reaction

Helene Elliott: Contract went too far.

Helene Elliott: Kings may be back in the mix.


Eric Duhatschek, The Globe And Mail: Writes about easy fix to contract.

Larry Brooks, New York Post: Brooks defends the contract, writing the “Kovalchuk contract, which meets every legal standard outlined in the collective bargaining agreement, is merely the latest example of a powerful team acting creatively in order to keep as much of its personnel intact as possible.”

Michael Traikos, National Post: Traikos argues that the contract isn’t that bad for the NHL and its fans.

Scott Burnside, ESPN: Burnside writes about the questions that have arisen as a result of this deal.

Jim Kelley, SI: Kelly writes that this case is about “about power, politics and positioning with a few personality issues tossed in for good measure.”

Michael Farber, SI: Farber writes that the NHL couldn’t ignore this contract and had to act.

John Branch, NY Times: Great article where Branch writes of the contrast between the big contract and the problems faced by Newark.

Ken Campbell, Hockey News: Story about how the Kings avoided a potential salary cap disaster by missing out on Kovalchuk

Saturday, July 24, 2010

Will Lamoriello Challenge The NHL? Will Be Business Decision

New Jersey Devils President, CEO, General Manager Lou Lamoriello has issued the following statement in response to the NHL’s rejection of the team’s contract with Ilya Kovalchuk:
“We are extremely disappointed that the NHL has decided to reject the contract of Ilya Kovalchuk. The contract complies with the terms of the Collective Bargaining Agreement. We will have no further comment until the process outlined in the CBA is complete.”
Steps Under The CBA

The CBA prescribes specific steps to address and resolve disputes. So where are we now?

At this point, the NHL has advised the Devils that the Kovalchuk contract has been rejected on the basis that it circumvents the CBA. In the opinion of the NHL, the contract was designed strictly to get around the CBA by artificially pushing down the yearly salary cap hit by adding on throwaway years.

Remember that the salary cap hit is not what a player makes that year; rather it’s the yearly salary average across the life of the contract. The yearly cap hit on the Kovalchuk contract is $6 million a year, even though Kovaluchuk is slated to make $11.5 million in 2011 and $550,000 in the last year of his contract.

Under Paragraph 26.12, after the NHL advised the Devils of its decision, the Devils get up to 3 days to decide what to do next: either agree with the NHL’s ruling or contest decision by going to arbitration. The Devils are still considering what to do.

If the Devils decide to go to arbitration, as per paragraph 26.13(a) of the CBA, they have 48 hours to advise of the choice. A decision from the arbitrator would then issue within 10 days (7 days to decide and 3 days to issue the decision). However, the parties need to agree on an arbitrator; if they can’t then there would be delays. The parties can also agree to extend deadlines.

If the arbitrator makes a finding that the Devils circumvented the CBA, it then falls on Commissioner Gary Bettman to impose a penalty - Paragraph 26.13(c). In this case, while there are a bunch of penalties under the CBA, like big fines, the likely penalty would be a ruling that the contract is void. (If the arbitrator made a finding of circumvention against a player, then the arbitrator would decide the penalty and not Bettman).

Will He Or Won't He - Does Lamoriello Go To Arbitration?

So we should know by early next week if the Devils intend to contest the NHL’s ruling. Lamoriello’s statement that the Devils are “extremely disappointed” by the ruling and “will have no further comment until the process outlined in the CBA is complete” may suggest they are considering challenging the NHL. However, this is mere speculation.

In the end, whether the Devils elect to challenge the ruling will ultimately be a hockey decision and not strictly whether they think they could win at arbitration. Can the Devils re-work the contract in a way that will still allow them to address their other needs. Can the Devils re-do the deal without jeopardizing their ability to sign Zach Parise to a long term extension.

As well, before this season, the Devils were in need of a puck-moving defensemen with offensive punch. While recently signed defensemen Anton Volchenkov and Henrik Tallinder were good acquisitions, both are defensive minded. Paul Martin was a mobile defenseman for the Devils, but he’s gone after signing a 5 year deal with the Penguins. That means that Andy Greene will be counted on to provide some offensive punch, and some are not convinced that he can do so consistently. This may become an issue the Devils need to address and they will need cap space to do so.

Don’t forget that had the Kovalchuk contract been approved, there would have been cap causalities. Rumoured names as far as trades go included Dainius Zubrus, Travis Zajac, Bryce Salvadore, captain Jamie Langenbrunner and Patrick Elias. Some of these contracts would be tough to move; the point, though, is that Kovalchuk’s existing contract would have had a domino effect and a restructured deal could remove further cap dollars forcing more moves. That may not be something Lamoriello feels comfortable with, and may therefore give arbitration a chance.

If the NHL’s ruling has significantly disrupted Lamoriello’s best laid plans, then a challenge could well materialize. If it does, the NHL may characterize the last 6 years of the Kovalchuk contract as throwaway years, with the player making $750,000 in that first year, and $550,000 the last 5. While there have been other long contracts signed recently (Zetterberg, Franzen, Luongo, Savard), the only one that had conquerable throwaway years was that of Hossa, with 4 years – and that contract was investigated by the NHL. The structure of the contract, the NHL may argue, was designed strictly to circumvent the CBA and for no other reason.

Lamoriello would argue, in part, that the CBA does not expressly exclude these deals and that the NHL can’t know whether Kovalchuk will play into his 40s.

Indeed, both sides have reasonable arguments.

This coming week will be interesting and will play a big part in defining the NHL landscape particularly with a number of star players looking to sign lucrative deals before the current CBA expires in 2012, including Joe Thornton, Steven Stamkos, Zdeno Chara, Shea Weber, Parise, Drew Doughty, Brad Richards, Andrei Markov, Jeff Carter, Patrice Bergeron, and Alexander Semin. The NHLPA may want to see an arbitration case so it can better predict the validity of future contracts.

Should be an interesting week – strap yourself in.

Sarah & Kate Plus 8

News is that Kate Gosselin and her kids will be going to visit Sarah Palin in Alaska.

Rumoured itinerary for the big trip:

1) Walk to Russia and do some sightseeing

2) Read Palin’s favourite newspapers (full day activity)

3) Tea party

4) Play card game Bridge to Nowhere

5) Piggyback rides on Uncle Joe the Plumber

6) Take apart and reassemble a snow machine

7) Lecture on abstinence

8) Go on $150,000 shopping spree

9) Pin the tail on the Maverick

Thursday, July 22, 2010

Kovalchuk Deal: NHL Draws Line in Sand & Handicapping the Arbitration Case

I’m reminded of Willie Nelson’s song Why are you picking on me?.

The New Jersey Devils and Ilya Kovalchuk must be feeling that way right about now.

After Kovalchuk signed a 17-year, $102 million deal with Devils, the NHL rejected the contract on the basis that the deal constituted a cap circumvention by artificially lowering the cap hit.

Kovalchuk will earn $6 million each of the next two seasons, $11.5 million for the following five seasons, $10.5 million in the 2017-18 season, $8.5 million for the 2018-19 season, $6.5 million in 2019-20, $3.5 million in 2020-21, $750,000 the following season and $550,000 for the final five years.

Arguably, there are a handful of contracts with similar terms. Henrik Zetterberg, Roberto Luongo and Marian Hossa have signed 12 year deals, and Franzen signed for 11 years. Both Hossa and Luongo will be 42 when their deals are up, while Franzen and Zetterberg will be 40. Kovalchuk will be 44 when his contract is expires.

So why has the NHL taken issue with this contract, but not others?

The answer: the NHL is drawing a line in the sand.

The Kovalchuk contract does have a unique combination of factors that may have irked the NHL. In the first 10 years of the contract, Kovalchuk takes homes $92.5 million dollars. At that point, he will be 37 years old. In the last 7 years of the contract, though, he is slated to make a combined $9.5 million, and $550,000 in each of the last 5 years. These are the throwaway years and it may be tough to argue otherwise. That together with the length of the contract - 5 years longer than the next contract in line - made the contract a problem.

You may remember that the NHL investigated the Hossa deal, but ultimately approved it. In retrospect, it may have been sending a message to NHL clubs that they needed to tread carefully with these contracts and not go too far. The Kovalchuk contract, in the NHL’s estimation, went too far.

So what’s next? After the NHL completed its investigation as prescribed by the CBA, it went to the Devils and informed them that the contract was rejected. The Devils are now trying to decide what they will do. They can accept the NHL’s decision and try and restructure the deal. However, if they elect to contest the NHL’s ruling, then the parties go to arbitration.

If the Devils decide to contest the NHL’s ruling, who will win?

This is always a tough question to answer as much depends on the evidence filed. If I had to handicap this case, I would say while it’s a close call, in my opinion the NHL stands on the stronger side of the case. However, I would never bet against Lou Lamoriello.

Remember the CBA provides that teams and players cannot do anything that is intended to or has the effect of defeating or circumventing the provisions of the CBA. Intention is tough to show, so the NHL in all likelihood would focus on the net effect of the contract.

Here are some possible arguments for the NHL:

One Reason and One Reason Only: The deal constitutes a cap circumvention as it artificially lowers the yearly cap hit with, at the very least, 6 throwaway years. The only reason the contract was designed in this way was to circumvent the CBA; there is no other reason.

Unique Contract: While there have been some long contracts signed, none are of this magnitude at 17 years and none are structured with so many inconsequential years at the end for so little money.

Career Arc: Looking at the typical arc of a player’s career (particularly a forward/winger), it is unlikely that Kovalchuk would play into his 40s. While, there are some players that have played into their 40s (Marc Recchi at 42 and Chris Chelios at 48), empirically that is not the norm.

Here are some possible arguments for the Devils:

No Max Years In CBA: While the NHL may not like the terms of the contract, the CBA simply does not preclude these types of contracts. If the NHL wanted to rule out these types of contracts, they should have done what the NBA did and expressly address it in the CBA.

Past Practice: The NHL has approved similar contracts. When Kovalchuk’s is up, he will be 44. That is not significantly older than the age of other players that have signed similar deals. Hossa and Luongo will be 42, while Franzen and Zetterberg will be 40. So this contract is very much in keeping with previous contracts.

The Hot Yoga Defence: With advances in training and nutrition, players are playing longer than ever. At the age of 42 and with the help of hot yoga, Marc Recchi has agreed to terms with the Bruins to play in his 22nd NHL season. He will turn 43 next season and continues to be a productive NHL winger, recording 43 points in 81 games last season. Enjoying the benefits of a rigorous fitness regime and good nutrition, Chris Chelios at the age of 48 played this past season. If he stays in shape and eats well, there is not reason to believe that Kovalchuk can play into his 40s. Simply put, the NHL doesn't have a crystal ball and is merely speculating.

My initial reaction is that I would be surprised to see Lamoriello and the Devils go to arbitration as they would have a tough case. You can say past practice should be an endorsement of this contract; however, that alone is likely insufficient to sustain the position that the contract should be deemed valid. The other contracts are borderline and this one looks worse.

If I’m a betting man, I would put my money on the NHL if this case goes to arbitration. If I had some extra chips to put down, I would bet that the Devils don't go the route of arbitration.

I see a new deal for Kovalchuk somewhere in the neighbourhood of 14 years, and probably with the Devils.

Senators Re-sign Nick Foligno - Rumoured Yearly Cap Hit

The Ottawa Senators have signed forward Nick Foligno to a new deal. Terms have not been released.

I wonder if we would be looking at $2 million over 7000 years. That would result in a yearly cap hit of $285, which would certainly be manageable for the Sens.

Unclear, though, if Foligno will play out the full contract.

Wednesday, July 21, 2010

Kovalchuk Contract: Listen To On Air Legal Analysis on Team 1200

This morning I was on the Team 1200 show TGOR with JR, Steve and Jim analysing the NHL's rejection of the Kovalchuk contract. To listen to the clip, please click the link below. The NHL's press release is below the video. If you have any questions, please post them and I will answer them.

To help me explain to my girlfriend why reading the CBA in bed at 12:30 is actually pretty hot, please email me with advice.

NHL Press Release
"The contract has been rejected by the League as a circumvention of the Collective Bargaining Agreement. "
"Under the CBA, the contract rejection triggers a number of possible next steps that may be elected by any or each of the NHLPA, the Player and/or the Club. In the interim, the player is not entitled to play under the contract, nor is he entitled to any of the rights and benefits that are provided for thereunder. The League will have no further comment on this matter pending further developments."

Tuesday, July 20, 2010

The CBA & The NHL's Rejection of the Kovalchuk Contract

According to TSN, the NHL has rejected the Kovalchuk contract on the basis that it circumvents the CBA.

Presumably, the NHL is of the view that deal constitutes a cap circumvention by artificially lowering the cap hit with “throwaway years" at the end of the contract. This was noted in my previous post as a possible argument available to the NHL.

Given other contracts of similar length, this is a bold move by the NHL.

As per Paragraph 26 of the CBA, the Commissioner can commence an "investigation regarding whether a circumvention has occurred". At the conclusion of the investigation, the NHL would draft a report with its findings and conclusion. If a positive finding is made of circumvention, before issuing the report, the NHL and the NHL club (in this case the Devils) would have up to 3 days to try and work things out. If they can't, then the case would go to an arbitrator for a decision.

The arbitrator under the CBA has wide discretionary powers (26.13(b) The System Arbitrator may find a Circumvention has occurred based on direct or circumstantial evidence, including without limitation, evidence that an SPC or any provision of an SPC cannot reasonably be explained in the absence of conduct prohibited by this Article 26. The investigation and findings of the Investigator pursuant to Section 26.10 shall be fully admissible in any proceeding before the System Arbitrator under this Section 26.13).

If the arbitrator makes a finding that a circumvention has occurred, the Commissioner can impose any number of penalties on the NHL club (the arbitrator imposes the penalty if the circumvention was committed by the player). Including among the penalties is voiding the contract.

I am reminded of former Paul Kelly's comments when the NHL was investigating Hossa's 12 year deal:
"To my knowledge it's still ongoing, but my understanding is the league would like to get that thing wrapped up in some form or another before the start of the season," Kelly said. "I don't see those contracts being redone, either the Hossa contract or the Pronger contract. I understand the league might not be happy about that kind of creative contract structuring, but credit to the teams involved and to the general managers in finding a way to get those deals done, which is completely consistent with the language of the CBA."

"It's been going on for years," Kelly said. "They let some of them go over the years and they registered these two contracts and then decided to start an investigation sometime later, which is a bit odd."
Assuming the penalty imposed by the NHL is the voiding of the contract, the Devils may go back and restructure the contract. However, this may open the door for the Kings to step back in if the Devils can't make the numbers work.

More to come once I get more details in this landmark case.

The Kovalchuk Signing & The NHL CBA – How It All Works

It’s official: Ilya Kovalchuk has signed a 17-year, $102 million deal with the New Jersey Devils. The 27 year old forward is locked in through the 2026-2027 season.

Kovalchuk will earn $6 million each of the next two seasons, $11.5 million for the following five seasons, $10.5 million in the 2017-18 season, $8.5 million for the 2018-19 season, $6.5 million in 2019-20, $3.5 million in 2020-21, $750,000 the following season and $550,000 for the final five years.

He will be 44 years old when his contract expires. However, the expectation is that he won’t play until then. Unless your last name rhymes with Recchi or Chelios, playing into your 40s is unlikely.

It’s no secret that NHL teams are looking to ink star players to long term deals:

Henrik Zetterberg - 12 years/$73 million         Mike Richards - 12 years/$69 million
Vincent Lecavalier - 11 years/$85 million        Johan Franzen - 11 Years/$43 million
Roberto Luongo - 12 years/$64 million           Alexander Ovechkin - 13 years/$124 million
Marian Hossa - 12 years/$62.8 million                                                                           

In a lot of these cases, the player will probably retire before his contract is up.

So why are these types of deals structured this way and are they permitted under the NHL Collective Bargaining Agreement (CBA)?

Let’s start at the beginning – the salary cap hit. Under the CBA, the annual salary cap hit for a player’s contract is the average yearly amount of the total contract. So while Hossa is slated to make $7.9 million this coming season, the actual yearly cap hit for the Hawks is actually $5.23 million ($62.8 million divided by 12 years). In the case of Kovalchuk, his yearly cap hit will be $6 million, even though he will be making $11.5 million in 2011.

In the first 10 years of the contract, Kovalchuk will make $92.5 million dollars. By that time he will be 37 years old, and on the downside of his career. Should the Devils decide to part ways with Kovalchuk at that point, they could buyout the remaining 7 years of his contract, which would be two-thirds of the remaining $9.5 million. Beneficial for the Devils is that the buyout money is paid out over twice the remaining years of the bought out contract (note though that the resulting cap hit is not the buyout amount; that’s calculated by more complicated means). If Kovalchuk were to retire at any time, both sides walk away from the deal with no cap hit at all.

(Note – if a player is 35 or older when he signs, a buyout does not reduce the cap hit. This is why you generally see these players signed to 1 year deals).

So Kovalchuk is getting the money he wants with this heavily front loaded contract. The Devils are getting the man they want, but are able to soften the yearly salary cap hit by extending the contract by a number of years. This will put the Devils in a better position to surround Kovalchuk with good players, and possibly help re-sign a player like Zach Parise (although no guarantees on that).

Are these contracts permitted under the CBA on the assumption that a player very likely won’t play until he’s 44? Well, the CBA doesn’t expressly say that they are not permitted. So then you need to turn to the part of the CBA that talks about doing things to get around the CBA or to circumvent it.

Paragraph 26.3 of the CBA provides that teams and players cannot do anything that is “intended to or “has the effect of defeating or Circumventing the provisions” of the CBA.

So if the NHL can show that a player or team entered into a contract that was intended to get around the salary cap or entered into a deal whose net effect was to get around the salary cap, then that contract could be up for challenge.

At law, showing that parties intended to do something can be tough. In the case of the Kovalchuk contract, you would need some clear evidence that either party intended to get around the CBA. If you don’t have that, it will be tough to succeed.

You can still succeed on the second part of the test: even if there was no intention of circumventing the CBA, does the deal have the effect of defeating the CBA and the salary cap?

In theory, the structure of a contract itself can be evidence of cap circumvention if the team and/or player is unable to provide a reasonable explanation for its structure. The argument from the NHL could be, for example, that the structure of the deal by itself constitutes a cap circumvention by artificially lowering the cap hit with the last “throwaway years”. The NHL could say that the long term contract has allowed a team to manipulate the salary cap.

So why didn’t the NHL challenge the Kovalchuk contract? It may be tough for the NHL to take issue with a contract that expires when Kovalchuk is 44 years old since other deals are pretty close. Luongo’s deal expires when he’s 42, and the same with Hossa. Both Franzen and Zetterberg’s contracts expire when they turn 40.

Genie's out of the bottle.

All that and the CBA does not expressly rule out those types of contracts.

For the always astute Devils GM Lou Lamoriello, 17 years was probably as far as he thought he could push things.

In theory, this means that teams could sign players to 30, 40 or even 50 year deals. If an owner wanted to buy the Stanley Cup, it certainly could under the current CBA.

It wouldn’t be a surprise if the NHL wanted to impose a maximum contract length in the next round of CBA negotiations, or otherwise try and address this issue. The CBA expires in September 2011, although the union holds the right to extend that deadline by a year - which it did in June 2010. Until then, we will continue to see these types of deals.

Monday, July 19, 2010

A Listen Back to Jimmy V's Speech - "Don't give up. Don't ever give up."

While watching this year's ESPY awards, I was reminded of Jimmy Valvano's (nicknamed Jimmy V) legendary speech at the inaugural ESPY Awards on March 3, 1993. Valvano was diagnosed with bone cancer in June 1992. In July, he found out that it had metastasized.

At the 1993 awards show, while accepting the inaugural Arthur Ashe Courage and Humanitarian Award, Valvano announced the creation of the "Jimmy V Foundation", an organization dedicated to finding a cure for cancer. He announced that the foundation's motto would be "Don't give up. Don't ever give up."

In his speech, Valvano said,
"To me, there are three things we all should do every day. We should do this every day of our lives. Number one is laugh. You should laugh every day. Number two is think. You should spend some time in thought. And number three is, you should have your emotions moved to tears, could be happiness or joy. But think about it. If you laugh, you think, and you cry, that's a full day. That's a heck of a day. You do that seven days a week, you're going to have something special."
At one point, the teleprompter informed Valvano he had 30 seconds left, to which he said, "They got that screen up there flashing 30 seconds, like I care about that screen. I got tumors all over my body and I'm worried about some guy in the back going 30 seconds."

He received a standing ovation from the crowd.  Valvano died less than two months after his famous ESPY speech.

If you haven't seen it or haven't seen it in a while, set aside 10 minutes and watch it - you will be happy you did.

Let us know what you think by clicking on "comments" below.

Friday, July 16, 2010

First Race for Semenya Following Gender Tests

Caster Semenya won her first race since being cleared to return to competition after undergoing gender tests, winning the woman's 800 meters on Thursday at the Lappeenranta Games.

"It's a new beginning," she said.

The South African middle-distance runner and world champion won gold in the women's 800 metres at the 2009 World Championships in Berlin. Following her victory, questions were raised about Semenya's gender. Her dramatic improvement in times and muscular appearance led the International Association of Athletics Federations (IAAF) to order gender tests.

She was examined by a group of doctors, including an endocrinologist, a gynaecologist, an internal medicine expert, an expert on gender and a psychologist.

She was withdrawn from international competition until July 6, 2010 when the IAAF cleared her to return to competition.

The results of the gender tests will not be released for privacy reasons.

Thursday, July 15, 2010

Blackhawks Down - Salary Cap Punishing Chicago

The Chicago Blackhawks are seeing more turnover than Lindsay Lohan's legal team.

It seems that the recipe for success in a salary cap world is to draft and develop a strong nucleus, sign them long term, hope they don't get hurt and surround them with supporting cast of players that change from year to year.

When the Backhawks raised the Stanley Cup this past June, it looked like they would be very good for a long time. With a nucleus of young players in Patrick Kane, Jonathan Toews, Duncan Keith and Brent Seabrook signed for a number of years, and a strong supporting cast, the future in Chicago looked promising.

Fast forward to July 15, and 8 players that were on the Stanley Cup winning team won't be back because of salary cap pressures. Gone are Dustin Byfuglien, Brent Sopel, Ben Eager and Andrew Ladd to the Thrashers. Kris Versteeg is now a Maple Leaf, Colin Fraser has joined the Oilers, Adam Burish is with the Stars and John Madden is unsigned and won't be back.

In all, the team has just about all its money committed to just 15 players and have a little over $113,000 in available cap room. Goaltender Anti Niemi remains unsigned. He just filed for arbitration and may be looking for Halak type money (about $3.75 million/year). On top of that, the Hawks still need to sign Jack Skille and Bryan Bickell. The team's cap issues were further complicated when it decided to match San Jose’s four-year, $14 million offer sheet for defenseman Niklas Hjalmarsson.

So now there are rumours Patrick Sharp and David Bolland may be on the way out. Marian Hossa's name has come up as well. As well, if the Hawks aren't happy with the arbitration award in the case of Niemi, they could let him go. They could also trade him, and try and sign Jose Theodore or Marty Turco at a discount.

So come October, the Hawks will look like a very different team with possibly up to 11 players gone. It will be like comparing then and now pictures of Joan Rivers.

While the Hawks situation is extreme as they overpaid for some players due to late qualifying offers, one thing is clear - being vigilant at managing a team's assets and finances is critical to achieving long term success. Players will come and go, and teams can't fall in love with their players. They need to unfortunately more than ever view players as assets, and decide when the disposition of those assets fits into the long term plan of a team. Warm and fuzzy? No. Reality? Sadly yes.

Wednesday, July 14, 2010

Stern Puts Ki-Bosh on Collusion Talk

There have been reports that LeBron James, Dwyane Wade and Chris Bosh, while still under contract with their respective teams, agreed to play together in Miami for the Heat.

Did the three players collude by speaking to each other while still under contract with their respective teams?

According to NBA Commissioner David Stern the answer is no.

"The three players are totally within their rights to talk to each other," Stern said. "That is not tampering."

The NBA’s anti-tampering rules bar club officials from publicly discussing their interest in potential free agents (or any player for that matter) while they are still under contract with another NBA team. So when Dallas Mavericks owner Mark Cuban told before free agent season opened that “anybody” would be interested in James and that he would have a chance if James told the Cavaliers to arrange a sign-and-trade deal, the NBA hit him with a $100,000.00.

However, there is nothing precluding NBA players from speaking to each other (presumably so long as they are not acting on the direction of teams officials). So while Cuban wants an investigation on how the three high-profile free agents ended up on Miami, the NBA said Monday no formal complaints have been filed with the league.

The NBA may elect to revisit the issue when the current CBA expires after the 2010-2011 season.

Stern on LeBron’s Prime Time announcement

"I would have advised [James] not to embark on what has become known as 'The Decision’. I think that the advice he received on this was poor. His performance was fine. His honesty and his integrity shine through. But this decision was ill-conceived, badly produced and poorly executed. Those who were interested were given our opinion prior to its airing."

Stern on Cavs Owner Gilbert’s Letter, which resulted in $100,000.00 fine from the NBA

“I think the remarks by Dan Gilbert, catalyzed as they may have been by a hurt with respect with the respect to his team and the people of Cleveland, though understandable, were ill-advised and imprudent.”

"I think Dan Gilbert is a good owner and I think he was completely correct in expressing his disappointment and his determination to win. In fact, if he wants to guarantee a championship, more power to him. I'm going to tune in to watch to see if he can do it. But you would read the rest of the statement to see where I think it was a little bit to the extreme and his follow-on interview."

Stern on Rev. Jesse Jackson, who issued a statement Sunday saying that Gilbert's "feelings of betrayal personify a slave master mentality and that he "sees LeBron as a runaway slave."

"Equally imprudent are the remarks by my good friend Jesse Jackson, which purport to make this into a racial matter," Stern said. "And I find that, however well meaning Jesse may be with the premise on this, mistaken."

Wall Street Journal - How Steinbrenner Saved His Heirs a $600 Million Tax Bill

Very good article on how Mr. Steinbrenner may have saved his family big tax bill:

Side note - Mr. Steinbrenner bought the Yankees for $10 million in 1973; today Yankees are worth somewhere north of $1.6 billion (but worth is 95% leveraged due to debt from the new Yankee Stadium according to Forbes).

Tuesday, July 13, 2010

Sponsor Looks To Trim Barber

Former Giants running back and NBC television analyst Tiki Barber is being sued by Tricera Revolution, Inc., which alleges that when Barber signed on as its sponsor, he wasn’t happily married and he knew it.

A manufacturer of indoor cycling studios, Tricera is alleging in a lawsuit filed in New York that it agreed to have Barber as its sponsor because he and his wife were happily married. They were a good fit for the company as Barber and his wife Ginny were known to enjoy indoor cycling classes.

Tricera provided the couple with stock and now wants it all back after the company learned that Barber was in fact engaged in a long term adulterous affair with a 23 year old NBC intern and intended to divorce his wife – pregnant with twins at the time.

Following winning the Super Bowl, Barber retired citing the toll that the physical nature of football took on his body. He also spoke of his keen interest in pursuing a broadcasting career. In 2006, ABC, FOX, NFL, and NBC all tried to sign Barber, with NBC securing Barber’s services.

Once a possible replacement for Matt Lauer of The Today Show, the New York Post reported that NBC had recently dropped Barber as The Today Show contributor. He was then quietly let go in May 2010 by NBC after his contract was not renewed.

Barber's alleged affair has put a damper on a once promising career in broadcasting.

Sunday, July 11, 2010

Vick, The Eagles & The NFL Conduct Policy

Michael Vick if you are reading this blog here is my advice – Saturday night stay home and watch Millionaire Matchmaker. It’s a fun show about socially inept millionaires who can’t find their own dates.

Vick allegedly got in a confrontation outside a Virginia Beach nightclub following his 30th birthday party - a situation that developed before a shooting that left Quanis Phillips wounded. No charges were filed and law enforcement officials have said that Vick is not a target of an investigation.

Still Vick has his problems. He’s apparently still associating with Phillips, one of his co-conspirators in the dogfighting enterprise.

On top of that, according to recent reports, Vick can’t leave the state of Pennsylvania. He’s been denied travel privileges by probation officials after missing a pair of schedule meetings. This made him a no-show at his own golf tourney.

There are persistent rumors that the Eagles may cut Vick (and bring in Jeff Garcia or trade for Troy Smith). If Vick is cut, he may not find employment in the NFL again.

That aside, it’s open for the NFL to step in and suspend Vick under its personal conduct policy. The policy is designed to help control off-field behavior by its players and preserve the league's public image. The policy, introduced by NFL commissioner Roger Goodell, only applies to the player's personal lives and image in the public spotlight. The NFL conducts separate investigations for drug and alcohol abuse and performance enhancement.

Remember Ben Roethlisberger? Criminal charges were never filed. Still, the NFL under is personal conduct policy suspended Roethlisberger for what the NFL characterized as a chronic pattern of poor judgement and bad decisions. The NFL went out of its way not to suggest that Roethlisberger had committed a crime:

“I recognize that the allegations in Georgia were disputed and that they did not result in criminal charges being filed against you,” Goodell said in his letter to the six-year veteran.

“My decision today is not based on a finding that you violated Georgia law, or on a conclusion that differs from that of the local prosecutor. That said, you are held to a higher standard as an NFL player, and there is nothing about your conduct in Milledgeville that can remotely be described as admirable, responsible, or consistent with either the values of the league or the expectations of our fans.

"Your conduct raises sufficient concerns that I believe effective intervention now is the best step for your personal and professional welfare.”

So Vick may have more to worry about than being cut by the Eagles.

Mike – Millionaire Matchmaker is on at 10pm on Saturdays.

Friday, July 9, 2010

Cavs Owner Rips Lebron - Legal Implications?

Following Lebron's announcement that he would be joining the Heat, Cavaliers owner Dan Gilbert ripped Lebron James. According to the Associated Press, Gilbert also believes that LeBron quit during the playoffs.

"He quit,'' Gilbert said. ``Not just in Game 5, but in Games 2, 4 and 6. Watch the tape. The Boston series was unlike anything in the history of sports for a superstar.''

Gilbert then followed up with an open letter to fans that can only be described as inflammatory. In it, he described LeBron's behaviour as a "shameful display of selfishness and betrayal", that his choice was a "shocking act of disloyalty" and that Cav fans "simply don't deserve this kind of cowardly betrayal" (I haven't seen this kind of language since my mom's last Christmas card).

Here's part of the letter, which can be found at NBA.COM (for the full letter click here):

Dear Cleveland, All Of Northeast Ohio and Cleveland Cavaliers Supporters Wherever You May Be Tonight;

As you now know, our former hero, who grew up in the very region that he deserted this evening, is no longer a Cleveland Cavalier.

This was announced with a several day, narcissistic, self-promotional build-up culminating with a national TV special of his "decision" unlike anything ever "witnessed" in the history of sports and probably the history of entertainment.

Clearly, this is bitterly disappointing to all of us.

The good news is that the ownership team and the rest of the hard-working, loyal, and driven staff over here at your hometown Cavaliers have not betrayed you nor NEVER will betray you.

There is so much more to tell you about the events of the recent past and our more than exciting future. Over the next several days and weeks, we will be communicating much of that to you.

You simply don't deserve this kind of cowardly betrayal...

If you thought we were motivated before tonight to bring the hardware to Cleveland, I can tell you that this shameful display of selfishness and betrayal by one of our very own has shifted our "motivation" to previously unknown and previously never experienced levels.

Some people think they should go to heaven but NOT have to die to get there.

Sorry, but that's simply not how it works.

This shocking act of disloyalty from our home grown "chosen one" sends the exact opposite lesson of what we would want our children to learn. And "who" we would want them to grow-up to become.

...The self-declared former "King" will be taking the "curse" with him down south. And until he does "right" by Cleveland and Ohio, James (and the town where he plays) will unfortunately own this dreaded spell and bad karma.
Sleep well, Cleveland.

DELIVERING YOU the championship you have long deserved and is long overdue....

Dan Gilbert
Majority Owner

By accusing LeBron of quitting on the Cavs, the issue becomes whether Gilbert is open to a claim for libel, which refers to a malicious, false and defamatory spoken statement. While it can be difficult to make out, Gilbert may have given LeBron something to think about - if only for a moment. Practically speaking, LeBron will want to move on, and suing his former boss is not what he wants to be doing.

The open letter appears on the Cavs section of NBA.COM. The NBA can exercise control over the content of its website, even parts that are dedicated to specific teams (Madison Square Garden, L.P. v. NHL). The question is whether the NBA will pull the letter. Some believe the letter is not in good taste. If ever a claim for slander was filed (again which seems unlikely), the NBA may also find itself as a defendant since the letter is on its website.

What do you think about the letter. Click on comments below and leave us your thoughts.

Thursday, July 8, 2010

Man Claims to be LeBron's Father

According to a report on, a D.C. lawyer says he is the father of LeBron James, and he has filed suit in federal court alleging a scheme to cover up paternity.

In a complaint filed June 23, Leicester Bryce Stovell says he has been trying to determine paternity since 2007. He alleges that that the test results were falsified by LeBron, his mother and lawyer.

Stovell has alleged that he met LeBron’s mom, Gloria James, at a Washington bar in 1984. They had ‘relations’ once; a month later she let him know she was pregnant with a boy she planned to name LeBron, seemingly after “Leicester Bryce”. Stovell is asking for millions in damages according to the court papers.

All this before LeBron announces his team of choice. This should be an interesting story as it unfolds. The full story may be found here.

Wednesday, July 7, 2010

LeBron, NBA Free Agent Frenzy & The NFL Franchise Tag

With as much drama as a Bachelor Reunion show featuring Jake and Vienna, this NBA offseason as been like no other in history.

Since free agent season kicked off, we have been playing a game called “Where will LeBron Go”. It doesn’t cost anything to play, but is very time consuming and a lot confusing. Would he sign with Cavs, Heat, Bulls, Knicks or Nets? Will he join Chris Bosh and Dwayne Wade in Miami? Does the signing of Amare Stoudemire give the Knicks a chance to sign LeBron? Can Pat Riley influence LeBron’s choice? If LeBron joins the Heat, will he wear his hair like Riley? Will LeBron replace Simon Cowell as the fourth judge on American Idol? Even President Obama has made his preference clear, saying he hopes LeBron signs with the Bulls.

Now we have word that LeBron will announce the team he is signing with on a 1 hour show airing on ESPN this Thursday at 9pm. This is unprecedented.

Add in the Bosh tweets and speculation as to where Ray Allen, Carlos Boozer and David Lee will end up, among others, and this has been more entertaining than a possible reboot of the Blossom franchise.

The NFL is watching this and is probably grateful for its franchise tag as it helps avoid this type of frenzy. Each team in the NFL can label one player as their franchise player. This is usually going to be a highly skilled member of the team. This player must be offered a salary that is at least the average of the top five players in the league at his position. By doing this, the player cannot be signed by any other team and must sign with his current team or not play that season.

A lot of players don’t like the franchise tag. While they may get a financial windfall in that one year they are tagged, they feel they may be missing out on a far more lucrative long term deal by hitting the free agent market. There is of course the risk of injury that could end their careers or seriously diminish their value.

The franchise tag rule will get some serious attention when the NFL negotiates the next CBA. While the players may not want the franchise tag as part of a new deal, the NFL may well push for it (perhaps with some tweaks). Stay tuned.

What do you think about the franchise tag? What do you think about the NBA free agent season so far? We want to know what you think. Click on "comments" below and leave us a note.