Why The NHLPA should NOT File A Grievance For Kovalchuk

In regards to Ilya Kovalchuk’s rejected contract:

The next step will likely be a grievance from the NHLPA. They have five days to respond to rejected deal once notified by the league. –Craig Custance

Here’s how the process works: If the Players Association files a grievance, then the case will go to an independent arbitrator. If the arbitrator rules in favor of Kovalchuk (and the Devils), then his contract will stand as is. If the NHL wins the ruling, then the contract will have to be fixed so it conforms to the requirements of the Collective Bargaining Agreement (CBA). So that’s where we stand with that.

Not so fast my friend...

I could make a joke about how the NHLPA has no leader right now or how Paul Kelly should have been able to file a grievance, but those are too easy. But in all seriousness, here’s the kicker: would the Players Association want to file a grievance? Because it’s in the best interests of the majority of players for this contract to be voided immediately. Let me explain…

Let’s do a little explaining of how escrow works for the players under the current Collective Bargaining Agreement (CBA). You may have heard how the players HATE the escrow system and how it’s currently set up. To understand why the Kovalchuk contract is bad for all players, we first have to explain what “escrow” is.

Escrow is a system where all of the players pay to cover any projected revenue shortfalls. From the last CBA, it specifically says that 54% of revenues will go to the players (Editor’s note: Per James Mirtle, it’s 54% – 57% of revenues). Keep in mind, we’re talking about actual salaries, not their cap hits (that’s a huge deal here). If revenues exceed any projections, then the players get money back—but since the salary cap keeps increasing every year and huge front loaded contracts are becoming more and more popular, that’s not happening anytime soon. So the players just have to deal with the fact that THEY are the ones that cover for the increased spending habits of teams.

How messed up is that? The players end up covering the difference for players’ salaries? Yes really… I’m not making this up.

Dirk Hoag does a great job of explaining it over at On the Forecheck:

The players are entitled to a specific percentage of league-wide hockey related revenues over the course of the season, and when their combined payrolls exceed that amount (as has been the case lately), they have to give the overage back to the owners. The mechanism by which this is done is by withholding some of their paycheck into escrow throughout the season, and the totals are tallied up at the end. –Dirk Hoag

(Hoag quotes Tyler Dellow in his article and his is the most thorough explanation on the subject. If you want to get into the nuts and bolts of the thing, check this lengthy/educational post at mc79hockey.com)

At this point, you may ask, “What the hell is your point Mr. VFMS?” Surprisingly, I actually DO have a point. Seeing how these front loaded contracts will end up costing the rest of the players in escrow, do the members of the players association really want to file a grievance for a guy who is signing a $102 million contract? Yes, I’m sure that Kovalchuk, the Devils, and Jay Grossman will all want to file some kind of grievance. They have something to gain out of this. But that’s not the question—the question is: Does the NHLPA want to file a grievance? Because if you asked the majority of the players if they wanted even MORE money taken out of their paycheck, I doubt you’ll get many takers.

The part that’s troublesome is that everyone just assumes that the NHLPA will fight and the contract will go through. But like any union, they really should be looking out for the majority of their members. How many players in the NHL are going to be able to sign a cap-circumventing contract that has a golden parachute to ease their way into retirement? A handful, at best? How many players are going to work their butts off for their entire career and play every last day of their contract until no one wants them anymore? The vast majority.

So why would they cater to the minority? They most certainly will. But why?

If you have the answer, I’d love to hear from you…