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dragonballgtz

Member Since 27 Apr 2004
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#2017699 NHL Rejects Kovalchuk's Contract

Posted by Frozen-Man on 21 July 2010 - 12:42 PM

I wonder how they're differentiating this from the other contracts like it.


Because it is different. As I stated in the Kovy contract thread as a tax attorney there is a phrase when dealing with the IRS "Pigs get fat, hogs get slaughtered." When Z and Mule had their deals the drop off in $ wasn't as steep or long on the tail end, they were only signed until the age of 40 (and the league acknowledged at that time that the Wings had a history of getting good mileage out of their players and had several examples of Wing's players playing until they were 40), the length of the contract wasn't as long, and the overall cap hit was a slight reduction from their prime years pay (Z max year amount $7.75M, cap hit $6.083M = $1.667M difference, Mule max year amount $5.5M, cap hit $3.955M = $1.545M difference, whereas Kovy max year amount $11.5M, cap hit $6M = $5.5M difference). There is a great difference between the two, Z and Mule were pigs, then you move on to Hossa and Pronger, little bit longer and/or little bit older and/or little bit more disparity on pay/cap hit therefore they (unlike Z and Mule) get their contracts scrutinized however, they are still just considered pigs. Then comes Kovy, longer term, older age at the end of the contract, greater disparity in pay/cap hit at his prime so finally the bounds are pushed too far and he is considered a hog and thus gets slaughtered.

This happens in tax law all the time. If you are a minority owner of a business (own less than 50% of the business) and sell your business interest you can take a discount on the valuation of the business for minority interest/lack of marketability/lack of control. The IRS has never set a percentage for discount but if you discount it 25-35% you will almost never get challenged, 35-45% you might get challenged, and 50%+ you stand a great likelihood of getting challenged. Some clients don't care and want to throw the dice and discount the value by 60% they are likely to get caught but will take the risk, they are hogs and likely to get slaughtered. That is what happened here, the actions/tactic wasn't different but the degree was and that is why they rejected the contract.


Zetterberg and Franzen's contracts take them up to age 40 (look at Lidstrom, Yzerman, Chelios, Hasek, etc...)

The Wings have a history of utilizing older players later in their careers than most teams, so these deals are not at ALL out of the realm of possibility of being completed...

Hossa's deal is sketchy, as it takes him to 42/43 and he has had a few injuries with the way he plays - much less likely to get completed, but also only a 12 year deal... not 17

Pronger's deal - after 35, so if they want to sign him to 100 years, let them - it's on the cap regardless and it's their own choice if they want to eat future cap after he retires...

This deal there wasn't even a grey area, it was flat out designed to circumvent the cap and there is NO way he will complete this contract, or at bare minimum (if you REALLY want to stretch) complete this contract at the value it is for.

Keep things in perspective...


Exactly :clap: :clap:


#2017645 NHL Rejects Kovalchuk's Contract

Posted by stevkrause on 21 July 2010 - 08:30 AM

DiPietros contract isnt really a fair comparison. The money he makes never drops a cent in any year of the contract so their is no "garbage years".

With DiPietro, and his injuries, every year is a junk year, OH!

:yahoo:
:banana:
:hockeysmile:


#2017612 NHL Rejects Kovalchuk's Contract

Posted by Manoir on 21 July 2010 - 03:04 AM

All these front-loaded contracts are dumb, including the contracts of Franzen and Zetterberg. They really go against what the salary cap was intended for. The cap hit should be what you pay a player in any particular year.


#2017437 Red Wings Making Play for Modano

Posted by Kira on 20 July 2010 - 06:30 PM

August 5th, eh? When are they gonna learn this guy ain't worth waiting for??? You have better things to do than kissing Modano's ass.


#2017125 Loophole

Posted by wings87 on 19 July 2010 - 11:20 PM

I really hope the NHL closes the loophole which allows teams to give ridiculously long contracts, such as Kovalchuk's 17 year deal, to save cap space.

Instead of averaging the yearly salary, the cap hit should be whatever the player makes that year. These contracs are getting ridiculous, and that includes Franzens 11 year deal.

Anyway thoes are my thoughts, What do you guys think would you like the NHL to step in and put a stop to the madness.


#2017041 Kovalchuk Re-Signs with Devils

Posted by Buppy on 19 July 2010 - 08:35 PM

Ya think Zetterberg is gonna play til he is 41 or Hossa til he is 43? f*** NO.


Zetterberg will be 40 in his final year (as will Franzen and Lecavalier). Hossa and Pronger will each be 42. Luongo will turn 43. Kovy will turn 44 in his final year. These deals keep getting more and more ridiculous.

It's pretty rare for players to reach 40, with only around 60-70 players in history doing so. (It is getting a bit more common though, about 20 of those from the past decade.) I think it's under 20 have played at 42. Only like 7 players in history have made it to 44.

And 6 garbage years tacked on at basically league minimum. It's such a clear attempt at circumvention they should remove Lamoriello from the HHOF. If the league doesn't step in here and deny this deal, they should just get rid of the cap altogether. I'd expect a 20+ year deal for Parise next year.


#2016997 Kovalchuk Re-Signs with Devils

Posted by Guest on 19 July 2010 - 06:28 PM

Well its kind of a good and bad. What it was supposed to do was eliminate players structuring weird deals where they made a lot one year or another to manipulate the cap. For example having a great player, lets say Kovy, sign with Detroit making $3M this year and then kicking his salary up to $7M next year in anticipation of Lids retiring and the Wings having a lot more space. You lock the player up but may not have a big cap hit in certain years.

Normally it is not near as big a deal to have an average cap hit as it is with this contract and there are rules regarding how much the player's salary can drop from year to year, but the longer the deal the more you can pay high but stretch it out over long term to minimize the cap hit. If players play out the whole contract there is no real problem it is when, like here, no one believes Kovy will play until he is 44.


Ya think Zetterberg is gonna play til he is 41 or Hossa til he is 43? f*** NO.


#2016675 Osgood may retire following this season

Posted by WizardOfOz30 on 19 July 2010 - 07:32 AM

Shortly after Osgood got sick, he started in a game against Nashville, and won 3-2.

Who was in net THE NEXT THREE GAMES after that win? Do you honestly think Osgood was given much of a chance at that point?

That was my point, he wasn't given a chance to prove himself when he did not get consecutive starts. I understand they wanted to go with the hot goalie because of the position we were in, but Babcock is very lucky that Howard didn't have an injury late in the season because we didn't have a reliable back up goalie to go to and that was not Osgood's fault. He could only do what he could at practice, it's not the same as playing in games.


#2016632 Hawkeytown? ...barf.

Posted by EZBAKETHAGANGSTA on 18 July 2010 - 09:31 PM

Except you do. Carry on.


Go away and leave him alone. Every team has their share of dumbass fans. If you don't believe me, spend more time on this site.

Not saying they are trying to be like Detroit, though the Bowman's obviously brought their fondness for Swedes over to Chicago.

I disagree with you on the cup thing. The Hawks are stacked with prospects and the core is set. While this upcoming season very well could be rough. In 2-3 years when these guys all come up it will be fun. There's a lot of top 4 defense and top 6 forward prsospects in the pipeline, and all of them will only need to fill bottom pair or 3rd or 4th line roles. The Hawks will be ridiculous in a few years IMO.

Have to agree with this to an extent, though another mass exodus will cleary happen again due to Hossa and Campbell's overdone contracts.


#2016571 Osgood may retire following this season

Posted by thedisappearer on 18 July 2010 - 05:29 PM

Because Babcock refused to play him which prevented him from getting that playing time to improve his numbers. He didn't have a chance to prove himself because he'd only get a game here or there, even when he got a win, the next game went to Howard.

We weren't exactly in the position to give him plenty of time to round into form last season, though.


#2015638 Jimmy cracks top 10 goalies in NHL

Posted by SouthernWingsFan on 15 July 2010 - 09:19 PM

JIMMAH!!!!!!!!!!

Posted Image


#2014220 Osgood may retire following this season

Posted by SouthernWingsFan on 12 July 2010 - 08:06 PM

As for the whole Osgood/Babcock and getting treated unfairly or whatever, it wouldn't surprise me, but nobody knows what's going on behind closed doors so life could be peachy neat between the two of them for all we know.

As for this past season, sure I would've like to have seen Osgood play more, but given the situation - Howard doing very little to justify getting benched on a consistent basis after Osgood went down with the flu or injury or whatever in December and the Wings having the unusual part of fighting tooth and nail for a playoff spot, Howard was going to be the guy unless he absolutely s**t the bed. Sure he did it here and there and for a game or two in the playoffs, but you can pretty much put any goalie on a list who does that from time to time, even the great ones like Hasek or Roy etc.

It wouldn't been great to see Osgood play a bit more, but the handling of goalies and what not was not the end of all end things that cost the Red Wings this season or the playoffs, it didn't really play much of a factor as some might want to believe.

I'd love to see Osgood play for a few more seasons.


#2013425 Kovie

Posted by ShanahanMan on 10 July 2010 - 06:52 AM

100 million? Christ that's a lot. I would think that after his disappointing run with New Jersey, his value would have decreased a bit. Apparently not.


#2012905 Red Wings Making Play for Modano

Posted by Kira on 09 July 2010 - 12:05 AM

I can't wrap my head around the concept of him on this team. Hang 'em up, Mike. Sorry, but it's past your time to go.


#2010505 Getflaf for Zetter

Posted by The Secret on 05 July 2010 - 03:39 PM

Trade... Getzlaf's game is too big to turn down. Nothing against Z but I'd have to make this trade. Getzlaf is unstoppable!