NHL says Evander Kane’s next contract could be voided by arbitrator

DENVER — The San Jose Sharks terminated Evander Kane’s contract on Jan. 8, yet the NHL revealed Wednesday that the grievance process initiated by Kane and the NHL Players’ Association for wrongful termination could extend past the opening of free agency on July 13.

NHL deputy commissioner Bill Daly said part of the reason for the holdup is independent arbitrator Shyam Das is not available during the month of June. Kane was unable to participate in hearings during the Edmonton Oilers’ playoff run, which ended in the Western Conference final on June 6.

“We’re currently in discussions with the Players’ Association as to what all that means in terms of Evander’s status,” Daly said prior to Game 1 of the Stanley Cup Final. “If it goes to the second day of hearings and we wait for a decision from the arbitrator, which will be a written award, my guess is that will be past the date of free agency.”

All of which makes it even more likely now that Kane and the Sharks will come to some type of settlement agreement.

The Sharks placed Kane on unconditional waivers for purposes of a contract termination on Jan. 8 after it was alleged he violated COVID-19 protocol while in the AHL. That came after he was suspended by the NHL for 21 games on Oct. 18 for reportedly submitting a fake vaccination card.

There is too much at stake for either side to let the fate of the decision rest in the hands of the arbitrator, who will make a binary and binding judgment on whether the contract will be reinstated in full or the Sharks terminated his contract with cause.

There is no middle ground. For Kane, that is the difference between the approximately $23 million remaining on his contract at the time of termination – and zero dollars. For the Sharks, that is the difference between no cap penalties at all and having to put Kane’s full, $7 million cap hit back on the books for the next three seasons, in addition to taking a player they clearly do not want back into their organization.

For both sides, some money and some cap hit is better than all or nothing. Then add in the time crunch and the clarity that both parties will gain ahead of free agency and it makes it a slam dunk.

But to this point, neither side seems willing to back down. In fact, the two sides can come to an agreement now without the need for more hearings. Instead, we’re locked into a standoff – a $23 million game of chicken.

“I don’t want to raise the specter that they’re in settlement discussions, because quite frankly, I think it’s the opposite,” Daly said Wednesday. “But that doesn’t mean it can’t change. I’m suggesting it is certainly a possibility – it is in every grievance process.”

In order to reach a settlement, Daly said, Kane would need to change his position.

“Our position right now is it’s a valid termination, he should be an unrestricted free agent at the start of free agency,” Daly explained. “His position is his contract with San Jose should be reinstated in full, which would clearly supersede any contract he might sign as a free agent. So those two results can’t co-exist, right?

“They can’t co-exist. How those get resolved, whether it’s by agreement or by an arbitrator, I can’t tell you how it’s going to happen.”

There is any number of possibilities in a settlement, which was reached between the Los Angeles Kings and Mike Richards after he grieved a wrongful termination in 2015. The Kings were hit with $6.6 million in cap recapture penalties spread over five years; Richards is receiving $10.5 million in pay spread through 2032, representing just under half of the money he was owed.

In this case, the Sharks could offer similar terms. Or the two sides could work out an arrangement that San Jose will pay the difference of what he earns on the open market this summer to make him whole.

Until then, though, Kane is a pending unrestricted free agent who is free to sign with any team – and can negotiate an extension to stay with the Oilers if desired.

However, should no settlement materialize, and the arbitrator rules that the Sharks terminated his contract without cause, Kane will be reinstated as a member of the Sharks and that will void any contract signed before then.

“Our position is it’s a valid termination and he’s a free agent,” Daly said. “But that doesn’t mean that situation might not be reversed, in effect, by an arbitrator – saying he has a valid contract and still has a valid contract.”

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NHL says Evander Kane’s next contract could be voided by arbitrator

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