• Anthony Studnicka

John Chayka: An Era Wasted

Updated: Jul 28, 2020

By: Matt Rubinoff


Photo Credit: David Wallace, AZ Central Sports.

The John Chayka era in Arizona is over. Chayka, hired by the Arizona Coyotes in 2016 at the age of twenty-six, became at the time the youngest ever general manager in major league sports.[1]


Now, on the day NHL teams were set to travel to their respective playoff bubbles in Edmonton and Toronto, Chayka reportedly terminated his contract as General Manager and President of Hockey Operations of the Arizona Coyotes.[2]The terms of the termination remain in dispute.


Although speculation continues to swirl, reports from Arizona Coyotes Insider Craig Morgan and Rogers Sportsnet’s Hockey Insider Elliotte Friedman suggest that the relevant legal dispute here ultimately depends upon the writing of the contract between Chayka and the Coyotes.[3]


I. What Do We Know?

First, the Coyotes released statement on the Chayka matter, holding nothing back: “John Chayka has quit as the General Manager and President of Hockey Operations of the Arizona Coyotes.”[4]

As noted by hockey twitter, you do not see the term “quit” thrown around in hockey circles. From team owners down to players, it is a word not meant to be in anyone’s vocabulary.[5]

Around the same time, Chayka released a statement from his perspective, stating: “[T]he situation around ownership made [becoming a Stanley Cup contender] an impossibility.”[6]


Moreover, he had no comment on the current matters between himself and the team, but noted that a “fuller, more detailed explanation may be necessary in the near future.”[7]


Now, the speculating starts. First, let’s discuss how the NHL handles disputes between teams and their employees, and then get into what this means for the future of this dispute.


II. The NHL Constitution.

Yes, the NHL has a Constitution. And 99% of the time, it probably does not come up in the day-to-day work of Commission Gary Bettman. This is that unusual 1%.


Under Article 6.3(b)(3), “the Commissioner shall have full and exclusive jurisdiction and authority to arbitrate and resolve . . . any dispute between any player or other employee designated by the Member Club and any Member Club or Clubs.”[8]


Further, Article 6.3(b) states, “the authority of the Commissioner to arbitrate disputes . . . shall be binding to the same extent as if the parties had entered into a formal arbitration agreement and the decision of the Commissioner shall be final and binding on all parties and shall not be subject to any review. The Commissioner may elect not to arbitrate a dispute in any circumstances that he determines appropriate.”[9]


Here, following the rules of the Constitution, Arizona owner Alex Meruelo intends to ask Gary Bettman to adjudicate this dispute.[10] Meruelo, the representing Member Club of the Arizona Coyotes, and Chayka, the representing designated employee of the Arizona Coyotes.


When and how this gets resolved is therefore up to Commissioner Bettman, and with the Return to Play planned to start in one week, it is uncertain how the Commissioner plans to handle the noise surrounding the Coyotes organization.


Moreover, if Commissioner Bettman chooses to take on the matter, what the contractual dispute entails may not be public information, for now. As Friedman reports, “It’s going to come down to what’s on paper.”[11] And with that, each side likely has their own interpretation.


III. How Did We Get Here?

Tensions reportedly started a little over a month ago, when Meruelo received a request from another NHL team owner to speak to Chayka about a possible position.[12] Since Chayka is still under contract with the Coyotes, NHL policy requires other teams to get permission from a team prior to speaking to an employee (such as a coach or general manager) still under contract.[13] This includes coaches or general managers who are fired but still technically getting paid under their contract with the respective team.[14]


In the past, this rule was modified to allow such conversations to happen without permission in exchange for a compensational draft pick to the team “losing” their coach or executive.[15] However, in 2015, Commissioner Bettman and the NHL Board of Governors agreed to eliminate the rule and returned to the “permission first” model.[16]


Therefore, as in this situation, once Meruelo received a request from another team to speak to Chayka, he had the authority to permit the discussion or deny the request.


Based on early reports, Meruelo initially denied the request.[17] And understandably so. Just last November, Chayka signed a contract extension with the Coyotes through the 2023-24 season.[18] For Meruelo, the plan was to keep Chayka on board for the long haul.


Reportedly, however, Meruelo eventually gave in and allowed the conversation between the mystery team and Chayka to happen.[19] What happened in the time between Meruelo’s rejection of the meeting and his eventual acceptance is unknown, but given that he permitted the meeting, the Coyotes likely thought at the time that there to no risk in losing Chayka. According to someone close to the Coyotes, Chayka apparently told Meruelo that these meetings were all apart of his process in building and networking relationships around the league.[20] Other reports suggest that Chayka has been pursuing “another professional opportunity” for weeks and had previously asked for his release from the organization.[21]


IV. The Coyote’s (Alleged) Breach of Contract Accusations.

Accordingly, it has been suggested that Meruelo may argue here that Chayka lied to him, representing to Coyotes ownership that he had no intention of leaving.[22] Apparently, this meeting with the mystery team ended with a huge offer on the table for Chayka, not simply a lateral move to become a general manager of another team.[23] Rather, this may have included ownership groups in other professional sports leagues.[24]


Because of this, the Coyotes seem to be prepared to argue that, per Chayka’s contract with the team, discussions like this are limited to “lateral moves,” such as with other NHL teams.[25] In this case, that would mean that Chayka is only free to discuss “General Manager” and “President of Hockey Operations” positions – or related titles – with the 31 other clubs, so long as Meruelo grants permission for the parties to speak.[26]


Thus, if the Coyotes could show that the meeting discussed other options and prove that Chayka did not plan to make a “lateral move,” Chayka may be in violation of the terms of his contract.[27]


Being accused of lying is one thing; breaching contractual terms is another. And the latter is much more effective in an arbitration dispute.


Other speculation includes an alleged request for compensation, presumably by the Coyotes to the other team involved.[28] This, as explained earlier, is not permitted in the NHL. However, if a non-NHL team is involved in these negotiations, this situation may enter a new “grey-area” for teams to see what they can negotiate in return.[29] Although there remains a clear policy that does not permit compensation between teams, there does not seem to be anything regarding compensation for lost executives under contract to non-NHL Member Clubs.


Without a settlement on the horizon, the bad blood between the parties is likely heading for a showdown at the hands of Commissioner Bettman.


V. What are the Stakes?

Given everything surrounding the dispute, including the impending arbitration, it is still not clear whether the now terminated Chayka may actively pursue other opportunities. Craig Morgan of the Athletic NHL reported that, according to a source close to the matter, “Chayka is not permitted to serve as president of hockey operations or GM of another team for the life of his contract.”[30] If that is the case, Bettman must decide whether (a) this provision survives the termination of the contract, and (b) whether or not Chayka nevertheless breached the contract in his discussions for a non-lateral move with another organization.


Until then, as always, money hangs in the balance. The situation here likely depends on the terms of the contract and the relevant termination provisions. If Commissioner Bettman believes the conversations between Chayka and the mystery team were valid under the terms of the Chayka/Coyotes agreement, the Coyotes may still be on the hook to pay-out Chayka for the remainder of the contract. If not, the Coyotes may have a case to be relieved of any money owed due to Chayka’s violation.


VI. Missed Opportunities

In the end, Chayka’s time with the Coyotes left a lot to be desired. Prior to the stoppage of play on March 12, 2020, the Coyotes were four points out of the last wild card position in the Western Conference with twelve games remaining. Entering the new restart format, the Coyotes are now set to play the Nashville Predators in the best-of-five play-in round starting August 2nd in Edmonton. Since being hired before the 2016-17 season, Chayka failed to reach the playoffs in each season, finishing as high as fourth in the Pacific Division and four points out of the final playoff spot in 2019.


Fans of the team, or anyone closely following the NHL, would tell you that the Coyotes are trending upward. For years, at the beginning of each season, they seemed like the popular sleeper pick to compete for a playoff spot and make a legitimate splash in the post-season. Unfortunately, from key goaltending injuries to underperforming core players, the Coyotes could never really put it all together at the same time. Add that to the merry-go-round of ownership problems and unsustainable fan base support, and you could easily start to convince yourself that Chayka had a good case to explore other opportunities.


Following the termination of Chayka, former NHL player Steve Sullivan was announced as the interim General Manager for the Coyotes. Sullivan previously acted as Chayka’s Assistant General Manager.


Entering their first “playoffs” since 2012, Sullivan inherits a ton of on-ice talent, while also taking the reigns of the never ending off-ice drama that has come to define the business side of the Arizona Coyotes organization.


This is an ongoing story and may be updated with new information.



--------------------

Matt is a rising 3L at Penn State Law.


[1] See Greg Wyshynski, Arizona Coyotes GM John Chayka resigns ahead of postseason, ESPN (July 26, 2020), https://www.espn.com/nhl/story/_/id/29543845/arizona-coyotes-gm-john-chayka-resigns-ahead-postseason. [2] See id. [3] See Elliotte Friedman, Coyotes owner to ask Bettman to adjudicate split with Chayka, Sportsnet (July 26, 2020),https://www.sportsnet.ca/hockey/nhl/coyotes-owner-ask-bettman-adjudicate-split-chayka/; Craig Morgan, NHL source: ‘John Chayka is a liar and a quitter’, AZ Coyotes Insider (July 26, 2020), https://azcoyotesinsider.substack.com/p/nhl-source-john-chayka-is-a-liar. [4] Morgan, supra note 2. [5] See Sean McIndoe (@DownGoesBrown), Twitter (July 26, 2020, 3:56 PM), https://twitter.com/DownGoesBrown/status/1287476959484706816. [6] Morgan, supra note 2. [7] Morgan, supra note 2. [8] NHL Constitution, Art. 6.3(b)(3). [9] NHL Constitution, Art. 6.3(b). [10] See Friedman, supra note 2. [11] Friedman, supra note 2. [12] See Friedman, supra note 2. [13] See Dan Rosen, NHL to end coach and executive compensation policy, NHL.com (Dec. 8, 2015), https://www.nhl.com/news/nhl-to-end-coach-and-executive-compensation-policy/c-791590. [14] See id. [15] See id. [16] See id. (“Commissioner Bettman said the Board agreed fully with reverting to the previous policy”). [17] See Friedman, supra note 2. [18] See NHL.com Staff, Chayka signs extension to remain general manager of Coyotes, NHL.com (Nov 11, 2019), https://www.nhl.com/news/john-chayka-extends-contract-to-remain-gm-with-arizona-coyotes/c-311174196. [19] See Friedman, supra note 2. [20] See Morgan, supra note 2. [21] See Morgan, supra note 2. [22] See Friedman, supra note 2. [23] See Friedman, supra note 2. [24] See Friedman, supra note 2. [25] See Friedman, supra note 2. [26] See Friedman, supra note 2. [27] See Friedman, supra note 2. [28] See Friedman, supra note 2. [29] See Friedman, supra note 2. [30] See Morgan, supra note 2.

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