arbitration · Settlement · sports

Mike Richards and Kings – Gotta Settle This and Keep the NHL and NHLPA Happy

Mike Richards has always been known as a scrappy guy.

Richards and Langenbrunner
Richards and Langenbrunner

On the day when hockey season starts and my beloved Kings will face the hated Sharks, I thought I’d comment on this.,

Mike Richards has a pedigree as a winner at every level, from juniors to the Olympics to the NHL.  He was a valuable member of the LA Kings Stanley Cup winning teams, coming off of a trade from Philadelphia where he was the team captain.  I recall Richards centering fellow alleged drunken locker room cancer Jeff Carter and alleged lazy and fat Dustin Penner during he 2012 Stanley Cup run.  Richards was effective, if not spectacular.

As his production began to fall, LA Kings GM Dean Lombardi began to field questions about Richards’ commitment.  I myself was shocked that Lombardi did not issue a compliance buyout of Richards’ contract after the end of the 2013-2014 season.  I was not surprised, though.  Lombardi always stressed loyalty.

Last year Richards was waived and cleared the waiver wire due to the mammoth size of his contract.  Richards toiled in the AHL with the Monarchs, called up toward the end of a season where the Kings would not make the playoffs.  Then, during the draft, Lombardi was trying to put together a trade when he learned of Mike Richards’ arrest at the Canadian border.

Lombardi made a bold move – he canceled the contract.  The NHLPA vowed to file a grievance and this, no doubt, is headed for arbitration.  Lombardi mitigated he cap hit (the Kings were so strapped with the salary cap last year, in part due to the Voynov situation, there was suggestion that they would play two or three men short) and hung Richards out to dry.

When it happened, I predicted that this would settle.  Settlement would absolutely be preferable for everyone involved. Arbitration would, under my understanding, be an all-or-nothing thing for both sides.  The arbitrator would not be empowered to craft some equitable solution, the splitting of the baby. With settlement, both sides can give each other something.

Settlement allows the parties to negotiate things that a judge or jury or arbitrator will not give.  Settlement manages risk.

A brief explanation of arbitration.  An arbitrator is basically a private judge. There is no right to a jury.  The purpose of arbitration is to be quicker and less expensive.  Arbitrations typically involved very streamlined procedures for evidence and other procedural matters.  Just think of it as a quick trial with a private judge who makes the determination of who wins or loses.

This is where settlement comes in.  The Kings, despite their position, know that they have a pretty good chance of losing should they go to Arbitration.  This would mean having Richards’s contract reinstated and facing the entirety of his salary cap hit.  It should also be noted that Mike Richards would likely be a pretty pissed off guy.  But Richards would also be stuck even if he wanted out.

Recall a couple of years ago when Vancouver goalie Roberto Luongo was saddled with a $5 million per year contract and cap hit through 2022.  “My contract sucks. That’s what’s the problem,” Luongo said. “I’d scrap it if I could now.”  A player making $5 million per year for the next decade complaining his contract sucks.  Yes.  Because his contract effectively prevented him from going anywhere.

Richards would be in that same situation.  Richards was effectively untradeable.  He came at too steep of a price for the production he was putting out there.  And unable to play in the NHL when perhaps some other team would take him for a lesser amount of money.

Settlement could be the best of both worlds for all involved.  The Kings would pay off Richards (pay a substantial sum) and be free of the full weight of his contract. Meanwhile, Richards could have he benefit of a large sum of cash and some stability.  I can imagine some terms along the lines of what the compliance buyout would have been.

The only issue is how the NHL and NHLPA would treat a settlement regarding the cap hit.  If there is some settlement, would the Kings be able to free themselves from the long-term cap consequences of the contract?  The NHL and NHLPA may be rightly concerned that the Kings and Lombardi did an end-around of the salary cap rules and that other teams would follow suit and do the same thing.

Think about it.  Imagine is Roberto Luongo had figured out that all he had to do to be released from his contract – which he said “sucks” – was to violate it in a way that sufficiently pissed off the Canucks management.  The Canucks and Luongo both wanted out.  They could have concocted some agreement for an “efficient breach” that would have allowed them both to be happily rid of that contract.

The next few weeks and months are going to be interesting.  I’m hoping this settles.  I hope that Richards takes a large sum of money and the Kings take a small cap hit.  I hope that Richards will be able to sign elsewhere and find that production that was lacking.

But mostly I’m curious about how this settlement will be structured.  This settlement doesn’t just have to please Richards and Lombardi.  The NHL and NHLPA also have to be satiated.

This will be interesting.

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