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Tuesday, October 03, 2006

McKenzie: GM's not happy with Lamoriello

A Great article from Bob McKenzie. Hmm, I told you all it was illegal. GM's know this to.

From TSN,

Bob McKenzie

Suffice to say, the natives are restless.

The natives, in this case, are NHL general managers who aren't happy with how New Jersey Devils' GM Lou Lamoriello has apparently extricated himself from a salary cap conundrum that, at one point, looked as though it might cause him to gut his team.

Now, though, with two moves over the last few days, Lamoriello looks as though he has deftly gotten cap relief to the tune of $7.1 million. That isn't to say he isn't going to be tight against the cap when the season opens and that all his problems are behind him, but he should at least be able to sign some of the players – Brian Gionta, Paul Martin and David Hale, for example – that he previously couldn't sign because of financial limitations. And it doesn't look as though the Devils will have to engage in a cap-induced fire sale to come in under the $44 million cap figure.

Did we mention a lot of his brethren aren't happy.

''This opens up a real can of worms for the league,'' said one GM, who requested anonymity. ''This is going to get ugly.''

This GM's unhappiness, or outrage if you will, is focused on what will unfold today when the Devils submit their final 23-man roster with the league. It is fully expected forward Alexander Mogilny will be listed as a Long-Term Injury, which if approved by the league will allow the Devils to spend over the $44 million salary cap by the amount of Mogilny's contract ($3.5 million) for as long as he remains on LTI.

Which, no doubt, will be the entire season.

And sources tell TSN that is precisely what will happen – Mogilny will be designated as an LTI and the league will approve it because he's legitimately injured.

In effect, as long as Mogilny remains on LTI, the Devils' salary cap is $47.5 million, which of course includes Mogilny's $3.5 million.

Many in the NHL community are shocked by the way this is unfolding because it was thought that there was no way for a team to get out from under the financial burden of a multi-year contract to a player who is 35 or over.

The new CBA included a clause that basically said any 35 and over player who signs a multi-year contract will count against the team's salary cap even if he retires or plays in the minors. It is why the Tampa Bay Lightning have to account for retired Dave Andreychuk's salary. Ditto for the New York Islanders with retired goalie cum GM Garth Snow and the Toronto Maple Leafs with the retired Tie Domi.
Why would Mogilny be any different?

That's the question a lot of GMs want answered.

There are a number of issues here.

The first is whether a 35 and over player is eligible for LTI status. The CBA clearly spells out that a 35 and over player has to count against the cap even if he's retired, playing in the minors or on injured reserve, but it doesn't specifically say anything about Long-Term Injury status. Conversely, the CBA clause on Long-Term Injury doesn't say anything about precluding 35 and over players from getting LTI.

It is that interpretation that sources say will get the Devils' their relief on Mogilny.

The other GMs who aren't happy about this turn of events will threaten to do the same with their over 35 players who are no longer useful or contributing to the team.

''You're going to see a lot of teams do this with their older players,'' a GM said. ''Why would you have a player retire when you can get him on LTI and his dollars don't count against the cap?''

Good question, but that goes to the second issue of importance. That is, the legitimacy of the injury.
It's all well and good for an NHL team, like the Devils, to say they have a 35 and over player who should be on LTI, but the league isn't going to take any team's word at face value on that.

That's why Mogilny had to receive an ''independent'' medical examination above and beyond any medical diagnosis from the team physicians. Sources tell TSN that ''independent'' medical assessment showed beyond any doubt that Mogilny, who has a chronic and degenerative hip condition, is physically unfit to play in the NHL.

If other teams want to get LTI status for their 35 and over players, and get an allowable overage on the cap, they will have to submit the player to the ''independent'' medical evaluation. If that player is deemed unfit to play, or legitimately long-term injured, then that team will get the same cap relief the Devils are about to receive.

There are some in the NHL community who, all rules and their interpretation aside, feel as though Lamoriello is getting a favorable ruling because he's one of the most powerful and influential executives in the game. He was front and centre in the CBA negotiations. But the league will argue that any team is entitled to do what Lamoriello has done and that the CBA is being upheld.

Which brings us to Lamoriello's other move that ruffled feathers.

On Sunday, Lamoriello traded veteran defenceman Vladimir Malakhov and a first-round pick to the San Jose Sharks in exchange for forward Igor Korolyuk and defenceman Jim Fahey.

This was an ingenious bit of work. Malakhov is no longer playing – he's unofficially retired, though he hasn't filed any retirement papers -- but because he's an over 35 player on a multi-year contract his $3.6 million salary this season has to count against the cap. So Lamoriello simply traded him to a team, the Sharks, that has plenty of salary cap room and can absorb the cap hit without any problem. Sharks' GM Doug Wilson was rewarded for his largesse with a first-round pick from the Devils. As for the players going to New Jersey, Korolyuk is playing in Russia and has no intention at this point of playing in the NHL and Fahey is low-priced depth defenceman.

A first-round pick is a nice return for Fahey. Very nice.

''It doesn't break any rules,'' a rival GM said of the Devils-Shark transaction, ''but it still has a smell to it. It stinks.''

Nevertheless, this one was a no brainer for the league. Unofficially retired players, like Malakhov, or players playing in Europe, like Korolyuk, have had their rights traded in the past. And it's not for the league to decide whether a first-round pick is too heavy a price to pay for a player of Fahey's stature.

It was clear from the get go what this transaction was all about. Lamoriello was paying a price (a first-round pick), a fairly stiff one, to open up cap room. It's not the first time it's been done with the new CBA and it certainly won't be the last one.

Philosophically, it is not much different than the move the Philadelphia Flyers made in the summer of 2005, when they traded Jeremy Roenick and his $5.5 million worth of cap-applicable salary, and an additional third-round pick, to the Los Angeles Kings in exchange for future considerations. The Flyers were effectively giving Roenick away to make room to sign Peter Forsberg to a free-agent contract. In fact, the Flyers had to do more than give Roenick away, they had to throw in a third-round pick to entice the Kings to take the player and his salary. The only difference is that Roenick actually played for L.A. while Malakhov is not ever going to play for San Jose (although if he showed up on the Sharks' doorstep ready to play, they would have to start paying him).

But in each case, the rules of the CBA were followed to the letter of the law.

Teams may not like it, but they could do the same if they so desire.

What we're seeing here is the natural evolution of the new CBA. There are many nooks and crannies to be explored. Over time, sharp GMs, or desperate ones, are going to find loopholes and areas open to interpretation. It's their job to exploit those to their own advantage.

And that, much to the chagrin of others, is precisely what Lamoriello has done.

There is a temptation to laud Lamoriello for these shrewd cap-world maneuverings, to brand him as the genius GM. But if that were the case, he wouldn't have gotten himself in such deep cap trouble in the first place with players such as Malakhov and Mogilny.

But the bottom line is the bottom line and New Jersey's previously-troubled cap situation is improved. Much improved.


Anonymous Anonymous said...

maybe i missed it...where does it say that what he did was illegal????

how is this different than what we did with zhamnov???

and why is it a problem again if all the other gms can do the same thing...because our gm wasnt the first??? (oh wait he was with zhamnov??? wtf)

12:33 PM  
Blogger Matt said...

Zhamnov was 34 when he signed, so he is covered. Mogiliny was 35 when he signed, so he IS NOT covered. Can anyone understand that? It isn't very complicated.

5:25 PM  
Anonymous Anonymous said...

the 35 is about if they retire or get cut, i thought?

8:21 PM  

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