Kings terminating Mike Richards contract for material breach [upd: grievance filed]

[Faltorvo]

Those in the know have used the words "shocked" and "wowzer" to describe the issue. I don't think your speculation stands up to those descriptions.

shocked and wowzer could also be describing with the kings are trying to pull off here and the grounds/cause they claim to have.

as in

wowzers, I'm shocked they are even going for it with these causes.

 

[Faltorvo]

Or the league just says "hey, you weren't allowed to cancel that contract and then you spent that cap space you shouldn't have. We're fining you and taking a pick for circumventing the cap."

If the arbiter finds that LA acted without merit the league is under no obligation to ensure that they aren't harmed by the consequences.

And if LA doesn't spend over the cap then Richards just goes back on the cap and the Kings can buy him out next summer.

well actually the league has already approved the application hatter , it's a matter of record.

now it's most likely a clerical approval and not merit, casual judgement

not even sure the nhl/gary has any say or grounds to challenge or penalise what LAs opinion was on the merit/casual part of it.

 

[Eric Sachs]

well actually the league has already approved the application hatter , it's a matter of record.

now it's most likely a clerical approval and not merit, casual judgement

not even sure the nhl/gary has any say or grounds to challenge or penalise what LAs opinion was on the merit/casual part of it.

In the event that a System Arbitrator finds a club is guilty of cap circumvention, the CBA authorizes the Commissioner to issue the following punishments:

- Between a $1M and $5M fine (counting against the cap as well)
- Forfeit draft picks (number, placement and which draft all up to Commissioner)
- Suspend a Club employee
(+ some other stuff that doesn't apply here)

Interestingly, was the language in the CBA regarding the fines for cap circumvention changed? The Devils $3M fine did not count against the cap but the language now clearly says it would and gives no option for it not to.

Also, a lot of us.. including myself.. have said that they are unlikely to face penalties because it's ultimately up to the Commissioner. That's not the case. The CBA also authorizes the System Arbitrator himself to impose the penalties described above.. though I'm not sure that's been done before.

 

[hatterson]

well actually the league has already approved the application hatter , it's a matter of record.

now it's most likely a clerical approval and not merit, casual judgement

not even sure the nhl/gary has any say or grounds to challenge or penalise what LAs opinion was on the merit/casual part of it.

Yes the league approved it, but that doesn't mean they have to insulate the Kings from consequences if the arbiter rules the Kings acted improperly.

The circumvention penalty wouldn't be for canceling the contract it would be if the contract is put back in force and the Kings were subsequently over the cap.

Now I'm not saying the league would automatically fine them/take picks, I'm saying it would be possible despite the league "approving" this move.

I'm also almost certain the league also wouldn't allow a buyout that didn't count against the cap just cause the Kings mistake put them in cap hell because that just opens a crazy can of worms where teams cancel contracts and then say "oops, our bad. We'll just pay you instead" to avoid a cap hit.

 

[htpwn]

Actually the Oilers and Flames were asking about trading for Richards. But then this happened (probably well before we knew) So they backed out Richards was waived and LA went out and got Lucic. If this doesn't happen LA probably doesn't go out and get Lucic in the first place.

I think what's lost in that is how difficult trading Richards would have been.

Everybody seems to have jumped to the assumption that the Kings were going to move him and then decided otherwise when this surfaced. But if anything, that's unlikely. Richards' contract is probably the worst in the league. If the Kings were able to move him it would likely involve them retaining salary and sending back compensation for the other team taking on such a deal. Depending on the offers, they may come out ahead buying him out, instead of trading him. And on that note, we don't know what the offers were. We don't know the seriousness of the interest. Buying out Richards was likely the only option for the Kings. Well, until they tried this.

Unless there is more involved it is quite shaky.
But with what just happened with Stoll in Vegas maybe the team sent out some kind of warning about actions that will be taken involving drugs. If so that might be where he's hanging his hat.
I'm still thinking there is more to this from both the Kings and with maybe what happened.

I agree there must be more, because if this is what the Kings are hanging their hat on, they're going to find themselves out of luck.

But on the other hand, what else could have possibly happened? The guy hasn't been arrested or charged, which would be the case if it were a very serious offense.

 

[Eric Sachs]

Yes the league approved it, but that doesn't mean they have to insulate the Kings from consequences if the arbiter rules the Kings acted improperly.

The circumvention penalty wouldn't be for canceling the contract it would be if the contract is put back in force and the Kings were subsequently over the cap.

Now I'm not saying the league would automatically fine them/take picks, I'm saying it would be possible despite the league "approving" this move.

I'm also almost certain the league also wouldn't allow a buyout that didn't count against the cap just cause the Kings mistake put them in cap hell because that just opens a crazy can of worms where teams cancel contracts and then say "oops, our bad. We'll just pay you instead" to avoid a cap hit.

You don't think the very act of removing his cap hit in this manner (if deemed incorrect) would be considered cap circumvention?

Is cap circumvention necessarily abusing the ceiling or floor? Because you can argue that a team can still gain advantages without hitting either limit.

Given the Kings can go over the cap by 10% in the summer, it's unlikely that even a late summer ruling reinstating Richards' contract would put them over the cap ceiling (17M in space currently with the 10% cushion).

 

[kdb209]

Yes the league approved it, but that doesn't mean they have to insulate the Kings from consequences if the arbiter rules the Kings acted improperly.

The circumvention penalty wouldn't be for canceling the contract it would be if the contract is put back in force and the Kings were subsequently over the cap.

Now I'm not saying the league would automatically fine them/take picks, I'm saying it would be possible despite the league "approving" this move.

I'm also almost certain the league also wouldn't allow a buyout that didn't count against the cap just cause the Kings mistake put them in cap hell because that just opens a crazy can of worms where teams cancel contracts and then say "oops, our bad. We'll just pay you instead" to avoid a cap hit.

The one place the League might relax the rules would be to allow the Kings, if they lost in arbitration, to retroactively buy out Richards contract despite being after the 6/30 deadline.

Of course, the Kings could just elect arbitration for one of their RFAs in order to open up an "Ordinary Course Buy-Outs Outside the Regular Period" as insurance.

 

[hatterson]

You don't think the very act of removing his cap hit in this manner (if deemed incorrect) would be considered cap circumvention?

Is cap circumvention necessarily abusing the ceiling or floor? Because you can argue that a team can still gain advantages without hitting either limit.

Given the Kings can go over the cap by 10% in the summer, it's unlikely that even a late summer ruling reinstating Richards' contract would put them over the cap ceiling.

To me, you'd have to actually exceed a limit to have circumvented the cap. If the Kings don't gain any material advantage from having the extra 3.2M in cap space it would say to me that de facto cap circumvention didn't happen and thus you'd have to show intent to circumvent. ie, that the Kings took this action with at least the partial motivation to get around the cap.

Although that might make sense and seem true, it doesn't seem strong enough (absent other evidence) to punish a team under circumvention.

 

[Faltorvo]

In the event that a System Arbitrator finds a club is guilty of cap circumvention, the CBA authorizes the Commissioner to issue the following punishments:

- Between a $1M and $5M fine (counting against the cap as well)
- Forfeit draft picks (number, placement and which draft all up to Commissioner)
- Suspend a Club employee
(+ some other stuff that doesn't apply here)

Interestingly, was the language in the CBA regarding the fines for cap circumvention changed? The Devils $3M fine did not count against the cap but the language now clearly says it would and gives no option for it not to.

Also, a lot of us.. including myself.. have said that they are unlikely to face penalties because it's ultimately up to the Commissioner. That's not the case. The CBA also authorizes the System Arbitrator himself to impose the penalties described above.. though I'm not sure that's been done before.

well the only way I could see any charge of cap circumvention is if LAs grounds/cause for termination are so outrageously feckless , that no reasonable person/arbitrator would side with LAs claims and now we are getting into serious areas of grey and opinion

because like I stated , the nhl has approved the application and in fact terminated the contract and cleared the cap space off LAs books.

there is nothing that I know of that's forces LA to keep the cap space open in case they lose a arb case and create the impossible, improbable situation.

 

[Model62]

The one place the League might relax the rules would be to allow the Kings, if they lost in arbitration, to retroactively buy out Richards contract despite being after the 6/30 deadline.

Yeah, this seems like the most likely scenario and the Kings' acting on the termination during the buyout window gives them a little cover if they have to backtrack ("Well, we woulda, but this process, which is also part of the CBA, had to occur first. This is a CBA problem, not an LA Kings problem.")

Unlikely would be the league slapping the club down for going over the cap, given the circumstances.

 

[hatterson]

The one place the League might relax the rules would be to allow the Kings, if they lost in arbitration, to retroactively buy out Richards contract despite being after the 6/30 deadline.

Of course, the Kings could just elect arbitration for one of their RFAs in order to open up an "Ordinary Course Buy-Outs Outside the Regular Period" as insurance.

True, although that also opens the league up to a challenge from Richards based on the fact that he had a diminished ability to sign another deal due to the buyout taking place later than otherwise permissible and after other teams had spent their money on other FAs

I'm not sure if any of this will pan out, if the Kings will end up stepping on any of the land mines, but there certainly seem to be a lot of them lying around.

 

[Micklebot]

To me, you'd have to actually exceed a limit to have circumvented the cap. If the Kings don't gain any material advantage from having the extra 3.2M in cap space it would say to me that de facto cap circumvention didn't happen and thus you'd have to show intent to circumvent. ie, that the Kings took this action with at least the partial motivation to get around the cap.

Although that might make sense and seem true, it doesn't seem strong enough (absent other evidence) to punish a team under circumvention.

Did the devils exceed the cap when signing Kovalevchuk? Wasn't that contract deemed cap circumvention?

imo, lowering your cap hit in a manner deemed against the rules would be cap circumvention regardless of whether you exceed the cap or not, because the end goal is alway going to be to use that space (one would assume). The fact that they were caught before using that space shouldn't suddenly make it no harm no foul; or maybe they could call it attempted cap circumvention, kinda like attempted murder?

 

[mouser]

The one place the League might relax the rules would be to allow the Kings, if they lost in arbitration, to retroactively buy out Richards contract despite being after the 6/30 deadline.

Of course, the Kings could just elect arbitration for one of their RFAs in order to open up an "Ordinary Course Buy-Outs Outside the Regular Period" as insurance.

Nope, they'd need to have two Club-Elected arbitrations to open up the second buyout window.

Or one Player-Elected.

The buyout windows are part of the CBA. So if it hypothetically did come to allowing a special buyout for Richards then the PA would have to be onboard with that. League couldn't do it unilaterally.

 

[Eric Sachs]

http://sportsdocuments.com/2013/07/29/nhl-substance-abuse-program/

Substance abuse program docs if anyone is interested.

Directly addresses the handling of a player who is arrested and/or convicted of violating a law relating to a controlled substance.

well the only way I could see any charge of cap circumvention is if LAs grounds/cause for termination are so outrageously feckless , that no reasonable person/arbitrator would side with LAs claims and now we are getting into serious areas of grey and opinion

because like I stated , the nhl has approved the application and in fact terminated the contract and cleared the cap space off LAs books.

there is nothing that I know of that's forces LA to keep the cap space open in case they lose a arb case and create the impossible, improbable situation.

Well, the only way that this contract termination doesn't hold is if a systems arbitrator rules against it.. which would simultaneously open the Kings up to those very penalties I mentioned above.

The fact that the NHL may have approved this move is largely irrelevant as the NHLPA is also able to enforce the CBA and a Systems Arbitrator's ruling is binding.

I do agree that LA won't have any cap restrictions in the meantime.

Did the devils exceed the cap when signing Kovalevchuk? Wasn't that contract deemed cap circumvention?

imo, lowering your cap hit in a manner deemed against the rules would be cap circumvention regardless of whether you exceed the cap or not, because the end goal is alway going to be to use that space (one would assume). The fact that they were caught before using that space shouldn't suddenly make it no harm no foul; or maybe they could call it attempted cap circumvention, kinda like attempted murder?

Right.. the Devils never went over the cap ceiling. They never would have either with the initial contract.

If the Kings are able to terminate his contract instead of having to buy it out, it gives them more cap room down the line. That's the same benefit the Devils would have had from the initial Kovalchuk contract (artificially lowering the cap hit to have more cap room down the line).

 

[Faltorvo]

You don't think the very act of removing his cap hit in this manner (if deemed incorrect) would be considered cap circumvention?

Is cap circumvention necessarily abusing the ceiling or floor? Because you can argue that a team can still gain advantages without hitting either limit.

Given the Kings can go over the cap by 10% in the summer, it's unlikely that even a late summer ruling reinstating Richards' contract would put them over the cap ceiling (17M in space currently with the 10% cushion).

I am talking about if this is settled after the season starts.

"if deemed incorrect"? no , if it was not a feckless attempt to create cause/grounds.

as all know legal minds differ ALL the time , they love to dance in the grey.

if their grounds are outrageous ( and that will be very hard to argue and prove) , then heck ya, burn and punish them hella hard, I say.

 

[hatterson]

Did the devils exceed the cap when signing Kovalevchuk? Wasn't that contract deemed cap circumvention?

I think the difference is in how blatant it is.

In the kovy situation the arbiter ruled that the contract, in and of itself, constituted circumvention and thus the Devils circumvented the cap regardless of intent (and he was clear that his finding didn't speak towards intent one way or another)

In this case I think the only way that happens is if the abiter rules that voiding the deal is so without merit that it's circumvention regardless of intent. That seems like a pretty high bar.

 

[Eric Sachs]

I am talking about if this is settled after the season starts.

"if deemed incorrect"? no , if it was not a feckless attempt to create cause/grounds.

as all know legal minds differ ALL the time , they love to dance in the grey.

if their grounds are outrageous ( and that will be very hard to argue and prove) , then heck ya, burn and punish them hella hard, I say.

I highly doubt this will go on into the season.. NHLPA will move to expedite the hearing as it affects Richards' ability to play (and make money).

There's also no legal minds or anything here. It's literally one systems arbitrator who rules one way or the other.. and whatever he says is binding.

I don't think it will be hard to prove the "grounds are outrageous" at all given past precedents. If anything, the opposite is true. A material breach of contract is something VERY hard to prove. Onus would be on the NHL/Kings.

 

[Model62]

True, although that also opens the league up to a challenge from Richards based on the fact that he had a diminished ability to sign another deal due to the buyout taking place later than otherwise permissible and after other teams had spent their money on other FAs.

This isn't exactly new territory for the league and the Kings. Of course, last time a weird suspension/termination came up, the player eventually won the right, via the courts, to have his contract re-instated and be invited to camp (Dan Cloutier).

 

[Eric Sachs]

I think the difference is in how blatant it is.

In the kovy situation the arbiter ruled that the contract, in and of itself, constituted circumvention and thus the Devils circumvented the cap regardless of intent (and he was clear that his finding didn't speak towards intent one way or another)

In this case I think the only way that happens is if the abiter rules that voiding the deal is so without merit that it's circumvention regardless of intent. That seems like a pretty high bar.

I mean, if the Kings go out tomorrow and spend over the cap space they would have had remaining with the Richards deal on the books.. that's a pretty big sign pointing towards their intent here. Even moreso if they spend over what would've been with Richards bought-out.

The arb can very well just rule against the contract termination and never even mention cap circumvention, but I personanlly don't think it's as high a bar as you do, I guess.

 

[Burner Account]

Did the devils exceed the cap when signing Kovalevchuk? Wasn't that contract deemed cap circumvention?

imo, lowering your cap hit in a manner deemed against the rules would be cap circumvention regardless of whether you exceed the cap or not, because the end goal is alway going to be to use that space (one would assume). The fact that they were caught before using that space shouldn't suddenly make it no harm no foul; or maybe they could call it attempted cap circumvention, kinda like attempted murder?

They were right up against it. If I remember correctly, there was a game against Buffalo that they only dressed 18 players.

Edit: 15 skaters against the Penguins http://www.nj.com/devils/index.ssf/2010/10/devils_sign_adam_mair_but_will.html

 

[Eric Sachs]

They were right up against it. If I remember correctly, there was a game against Buffalo that they only dressed 18 players.

Edit: 15 skaters against the Penguins http://www.nj.com/devils/index.ssf/2010/10/devils_sign_adam_mair_but_will.html

We're referring to the very act of signing Kovalchuk to his initial deal, not what may have happened afterwards (especially after the cap circumvention ruling). No team will ever go over the cap during the regular season without severe ramifications.. much more than the Devils got.

 

[Faltorvo]

http://sportsdocuments.com/2013/07/29/nhl-substance-abuse-program/

Substance abuse program docs if anyone is interested.

Directly addresses the handling of a player who is arrested and/or convicted of violating a law relating to a controlled substance.



Well, the only way that this contract termination doesn't hold is if a systems arbitrator rules against it.. which would simultaneously open the Kings up to those very penalties I mentioned above.

The fact that the NHL may have approved this move is largely irrelevant as the NHLPA is also able to enforce the CBA and a Systems Arbitrator's ruling is binding.

I do agree that LA won't have any cap restrictions in the meantime.



Right.. the Devils never went over the cap ceiling. They never would have either with the initial contract.

If the Kings are able to terminate his contract instead of having to buy it out, it gives them more cap room down the line. That's the same benefit the Devils would have had from the initial Kovalchuk contract (artificially lowering the cap hit to have more cap room down the line).

to the bolded

I don't believe this one little bit , when we are talking about possible cap circumvented charges, penalties.

the league approved the app and have cleared the cap space off the books, as far as I know, there are no rules or safety mechanisms in place if the arb case is settle after the season has started and the kings have already maxed their cap.

and the arb rules that MRs contract to be fully reinstated immediately.

then boom

the season is already on , the kings are cap maxed and a arb has added MRs 5.75m cap hit ( now what, from that moment on they are in violation of the max cap), that the league already approved to take off the board and had no stop gap measures in place to prevent this scenario from happening.

now IF this is still in arb when the season starts, should the nhl not be proactive and force LA to keep 1 contract slot open AND 5.75m cap space?

 

[Eric Sachs]

to the bolded

I don't believe this one little bit , when we are talking about possible cap circumvented charges, penalties.

the league approved the app and have cleared the cap space off the books, as far as I know, there are no rules or safety mechanisms in place if the arb case is settle after the season has started and the kings have already maxed their cap.

and the arb rules that MRs contract to be fully reinstated immediately.

then boom

the season is already on , the kings are cap maxed and a arb has added MRs 5.75m cap hit ( now what, from that moment on they are in violation of the max cap), that the league already approved to take off the board and had no stop gap measures in place to prevent this scenario from happening.

now IF this is still in arb when the season starts, should the nhl not be proactive and force LA to keep 1 contract slot open AND 5.75m cap space?

No?

because what if LA has a case with merit here?

now you're going to penalize them just in case they were wrong until they were proven right?

As of right now and until a potential ruling by an arbitrator, the NHL doesn't consider Richards to have a contract. They don't consider the Kings to have to fit his cap hit.

There's no need for safety mechanisms to protect the Kings from themselves. They know what they're getting into and if it goes wrong, they'll have to deal with the consequences..

 

[hatterson]

I mean, if the Kings go out tomorrow and spend over the cap space they would have had remaining with the Richards deal on the books.. that's a pretty big sign pointing towards their intent here. Even moreso if they spend over what would've been with Richards bought-out.

IIRC the recapture hit is bigger than the buyout hit for the next 2 years, so they couldn't go over the buyout amount without directly going over the cap in a "regular" manner.

The arb can very well just rule against the contract termination and never even mention cap circumvention, but I personanlly don't think it's as high a bar as you do, I guess.

Agree to disagree on the bar height

Either way I think the most likely outcome is for the arb to rule that the cancellation wasn't appropriate and put the contract back into effect. Then the NHL/NHLPA/Kings will figure out where to go from there.

 

[Eric Sachs]

IIRC the recapture hit is bigger than the buyout hit for the next 2 years, so they couldn't go over the buyout amount without directly going over the cap in a "regular" manner.



Agree to disagree on the bar height

Either way I think the most likely outcome is for the arb to rule that the cancellation wasn't appropriate and put the contract back into effect. Then the NHL/NHLPA/Kings will figure out where to go from there.

Yup, I agree with you there.

I can see the NHL and NHLPA allowing the contract to be bought out (though I can also see the NHLPA now allowing it as that means Richards is loses 1/3 of his contract value).

What is probably the realistic worst case scenario is they can't buy him out, are over the cap with his contract reinstated and have to make moves to get under it by the season opener.

Mostly because I don't think the NHLPA will even care to pursue cap circumvention in their arguments to the arbitrator. They will care way more about the Kings not having grounds to use the material breach clause. NHLPA could care less about cap circumvention, IMO... only the teams/NHL care about it as it keeps payrolls down.