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Official - Canucks Agree in Principle on Deal with Sergei Shirokov

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06-17-2009, 11:23 AM
  #351
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It does not look like a lengthy court battle. I was aware of the abortive injunction attempts.

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06-17-2009, 11:33 AM
  #352
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There is no players contract. By definition, a free agent is not under contract. When a contract expires all of the T's and C's expire as well.

Restricted free agency can be established through different means, but it is most likely either in a collective bargaining agreement between the KHL and the players association (if one exists?), or it is a by-law adopted by the league and binding upon KHL teams through the league constitution.

There is no legal instrument obliging the NHL to respect KHL league rules or terms of their CBA (if one exists).
Then there should be no compensation payable for Vancouver signing any RFA? Those contracts have expired so have not all their T & C's?

The NHL has said as a matter of policy they will not allow member teams to sign players who are not free of contractual obligations to their foreign club teams. Now whether or not the NHL will consider this to be one of those prohibited contractual provisions has yet to be decided as far as I know and that is likely why there is a hold-up in announcing the contract. The NHL may well take the position that for its purposes the Canucks are free to sign Shirokov.

Restrictions on free agency in the NHL predated the NHLPA. Players rights can be held pursuant to contract alone.

This is quite similar in effect to the old reserve clause in baseball. In the US it took the Curt Flood Act to overturn that in baseball. In Russia it is permitted by legislation of the Russian Parliament and it is also part of contract the player signs. There is nothing wrong with a contract that assigns future rights, they are enforceable all the time.

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06-17-2009, 12:34 PM
  #353
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...
Its nice having our resident legal expert back on these boards.

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06-17-2009, 03:10 PM
  #354
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Then there should be no compensation payable for Vancouver signing any RFA? Those contracts have expired so have not all their T & C's?

The NHL has said as a matter of policy they will not allow member teams to sign players who are not free of contractual obligations to their foreign club teams. Now whether or not the NHL will consider this to be one of those prohibited contractual provisions has yet to be decided as far as I know and that is likely why there is a hold-up in announcing the contract. The NHL may well take the position that for its purposes the Canucks are free to sign Shirokov.

Restrictions on free agency in the NHL predated the NHLPA. Players rights can be held pursuant to contract alone.
Are you being obtuse on purpose? What are you not understanding here?

RFA status goes to a player "rights", that is, within a league, a member team's exclusive rights to negotiate with and/or form a contract with a player. Players' rights are assigned, traded, released, transferred, and held for various amounts of time by various leagues unilaterally without the consent of the player. In the recent KHL entry draft, Spartak drafted (obtained rights to) Victor Hedman. So if Tampa Bay also drafts Hedman, by your reasoning they shouldn't be able to sign him, or would be obliged to pay some sort of compensation to Spartak? Rights do not infer a contract.

The Canucks can't sign just any NHL RFA without compensation because the Canucks are a member of the NHL. The NHL has a CBA with the NHLPA in which restricted free agency and compensation for signing an RFA is spelled out.

The Canucks can sign a KHL RFA because the Canucks are not a member of the KHL and are therefore not bound by any internal KHL rules or collectively bargained obligations. The NHL CBA is binding on the NHL and the players with respect to employment in the league. But it is not binding on the KHL anymore than the KHL free agency rules are binding on the NHL.

Sergei Shirokov's KHL exclusive rights are held by the Central Red Army (CSKA) Moscow. The Canucks have exclusive rights to Shirokov by way of the NHL entry draft. As the player's contract has now expired, either team has the right to negotiate and sign him to a contract within their respective leagues. The first one to do so has a contract that will (should) be enforced in either league.


Quote:
This is quite similar in effect to the old reserve clause in baseball. In the US it took the Curt Flood Act to overturn that in baseball. In Russia it is permitted by legislation of the Russian Parliament and it is also part of contract the player signs. There is nothing wrong with a contract that assigns future rights, they are enforceable all the time.

I'm a lowly MBA, not a lawyer, but in most jurisdictions in North America, I don't believe you can assign future rights to a human being outside of a freely negotiated collective bargaining agreement. You certainly can't in any of the so called "right to work' states such as California.

Secondly, one outcome of the Curt Flood case was that the court ruled that the anti-trust exemption was only valid for major league baseball. Also, without doing a whole bunch of research, my understanding is that the MLB reserve clause was upheld because of the existence of a CBA. But that wouldn't have stopped a player from playing in Japan, or the Domincan Republic (once their MLB contract expired).

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06-17-2009, 04:47 PM
  #355
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So if he does come over, does he play in the NHL or AHL? I've heard that the KHL is a bit better league than the AHL and he seemed to put up some pretty good numbers in that league.

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06-17-2009, 04:48 PM
  #356
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Quote:
Originally Posted by LeftCoast View Post
Are you being obtuse on purpose? What are you not understanding here?

RFA status goes to a player "rights", that is, within a league, a member team's exclusive rights to negotiate with and/or form a contract with a player. Players' rights are assigned, traded, released, transferred, and held for various amounts of time by various leagues unilaterally without the consent of the player. In the recent KHL entry draft, Spartak drafted (obtained rights to) Victor Hedman. So if Tampa Bay also drafts Hedman, by your reasoning they shouldn't be able to sign him, or would be obliged to pay some sort of compensation to Spartak? Rights do not infer a contract.

The Canucks can't sign just any NHL RFA without compensation because the Canucks are a member of the NHL. The NHL has a CBA with the NHLPA in which restricted free agency and compensation for signing an RFA is spelled out.

The Canucks can sign a KHL RFA because the Canucks are not a member of the KHL and are therefore not bound by any internal KHL rules or collectively bargained obligations. The NHL CBA is binding on the NHL and the players with respect to employment in the league. But it is not binding on the KHL anymore than the KHL free agency rules are binding on the NHL.

Sergei Shirokov's KHL exclusive rights are held by the Central Red Army (CSKA) Moscow. The Canucks have exclusive rights to Shirokov by way of the NHL entry draft. As the player's contract has now expired, either team has the right to negotiate and sign him to a contract within their respective leagues. The first one to do so has a contract that will (should) be enforced in either league.





I'm a lowly MBA, not a lawyer, but in most jurisdictions in North America, I don't believe you can assign future rights to a human being outside of a freely negotiated collective bargaining agreement. You certainly can't in any of the so called "right to work' states such as California.

Secondly, one outcome of the Curt Flood case was that the court ruled that the anti-trust exemption was only valid for major league baseball. Also, without doing a whole bunch of research, my understanding is that the MLB reserve clause was upheld because of the existence of a CBA. But that wouldn't have stopped a player from playing in Japan, or the Domincan Republic (once their MLB contract expired).
My god. I repeat, in case me and Wetcoaster weren't clear enough. A contract can have future clauses. It appears like one of these clauses implied a compensation if/when Shirokov would change team. Call it right, call it wrong, but it looks like Shirokov actually signed that piece of paper.
But I still believe that Shirokov will be a Canuck.

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06-17-2009, 04:49 PM
  #357
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Originally Posted by ItsAllPartOfThePlan View Post
So if he does come over, does he play in the NHL or AHL? I've heard that the KHL is a bit better league than the AHL and he seemed to put up some pretty good numbers in that league.
A bit better? Uh?

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06-17-2009, 04:51 PM
  #358
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A bit better? Uh?
I really don't know much about the level of play in the KHL...so I am going on what I've heard.

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06-17-2009, 04:57 PM
  #359
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The KHL is probably twice as strong as the AHL.

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06-17-2009, 06:29 PM
  #360
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Originally Posted by Alessandro Seren Rosso View Post
My god. I repeat, in case me and Wetcoaster weren't clear enough. A contract can have future clauses. It appears like one of these clauses implied a compensation if/when Shirokov would change team. Call it right, call it wrong, but it looks like Shirokov actually signed that piece of paper.
But I still believe that Shirokov will be a Canuck.
You can write anything you want into a contract, but getting it enforced is another thing. Restraint of trade, non-compete clauses, etc. all have to pass the reasonableness test. In such cases, the burden of proof for reasonableness is on the ex-employer, not the employee. The court starts with the assumption that the restriction is invalid.

The ex-employer needs to prove that the restriction is reasonable to protect business interest (such as trade secrets etc. not simply maintaining the services of the employee).

Such restrictions are generally to be found unreasonable if they are too broad in terms of geographic scope or in length of time. Since the geographical scope of the KHL is Europe, a reasonable restriction on an individual's right to work would likely be similarly scoped. Courts also consider asymmetry in bargaining power; say a 20 year old versus a professional hockey team.

I also don't think the Canucks will have to contest this in a Russian court. They will simply bring him over here and let CSKA try to win an injunction from a Canadian court. The right of an individual to work or trade in his profession is not something the courts are going to strip away without a really good reason.

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06-17-2009, 06:40 PM
  #361
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Are you being obtuse on purpose? What are you not understanding here?

RFA status goes to a player "rights", that is, within a league, a member team's exclusive rights to negotiate with and/or form a contract with a player. Players' rights are assigned, traded, released, transferred, and held for various amounts of time by various leagues unilaterally without the consent of the player. In the recent KHL entry draft, Spartak drafted (obtained rights to) Victor Hedman. So if Tampa Bay also drafts Hedman, by your reasoning they shouldn't be able to sign him, or would be obliged to pay some sort of compensation to Spartak? Rights do not infer a contract.

The Canucks can't sign just any NHL RFA without compensation because the Canucks are a member of the NHL. The NHL has a CBA with the NHLPA in which restricted free agency and compensation for signing an RFA is spelled out.

The Canucks can sign a KHL RFA because the Canucks are not a member of the KHL and are therefore not bound by any internal KHL rules or collectively bargained obligations. The NHL CBA is binding on the NHL and the players with respect to employment in the league. But it is not binding on the KHL anymore than the KHL free agency rules are binding on the NHL.

Sergei Shirokov's KHL exclusive rights are held by the Central Red Army (CSKA) Moscow. The Canucks have exclusive rights to Shirokov by way of the NHL entry draft. As the player's contract has now expired, either team has the right to negotiate and sign him to a contract within their respective leagues. The first one to do so has a contract that will (should) be enforced in either league.

I'm a lowly MBA, not a lawyer, but in most jurisdictions in North America, I don't believe you can assign future rights to a human being outside of a freely negotiated collective bargaining agreement. You certainly can't in any of the so called "right to work' states such as California.

Secondly, one outcome of the Curt Flood case was that the court ruled that the anti-trust exemption was only valid for major league baseball. Also, without doing a whole bunch of research, my understanding is that the MLB reserve clause was upheld because of the existence of a CBA. But that wouldn't have stopped a player from playing in Japan, or the Domincan Republic (once their MLB contract expired).
Obtuse? Me - definitely not. Are you?

I am quite familiar with negotiating NHL contracts and I am quite well-versed in the CBA.

Contracts generally at law can make provisions for future events and they can remain enforceable after the term of the contract has expired.

One of the better known examples in the real world would be non-compete clauses in employment contracts.

Flood lost his case and it took the US Congress to re-write the law.

In this case the Russian Parliament has written a law that recognizes a team has ongoing rights in what we would refer to as RFA status and it is also reflected in the player contract that Shirokov signed (assuming that he signed the standard KHL player contract as I have been told). Shirokov has assigned his future rights to his club team and the contract makes provision for him to buy out those rights in certain circumstances.

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06-17-2009, 06:53 PM
  #362
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As the player's contract has now expired, either team has the right to negotiate and sign him to a contract within their respective leagues. The first one to do so has a contract that will (should) be enforced in either league.
But...did he not actually sign a contract with CSKA first? And it appears part of the terms he freely agreed to was that there would be compensation to CSKA if he left CSKA - no matter where he went to play....?

If that is the case, this seems pretty cut and dried, CSKA is owed compensation. I'm a little surprised Auqilini hasn't simply written a check already. Is someone at NHL HQ telling him not to? Are there severe cap implications if he does?

 
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06-17-2009, 06:59 PM
  #363
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If that is the case, this seems pretty cut and dried, CSKA is owed compensation. I'm a little surprised Auqilini hasn't simply written a check already. Is someone at NHL HQ telling him not to? Are there severe cap implications if he does?
I'm too lazy to go find it but I seem to remember mention elsewhere on HFBoards that the NHL does not want teams negotiating compensation on their own.

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06-17-2009, 07:06 PM
  #364
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Contracts generally at law can make provisions for future events and they can remain enforceable after the term of the contract has expired.

One of the better known examples in the real world would be non-compete clauses in employment contracts.
See above re: non-compete, restraint of trade clauses.

Quote:
Flood lost his case and it took the US Congress to re-write the law.

In this case the Russian Parliament has written a law that recognizes a team has ongoing rights in what we would refer to as RFA status and it is also reflected in the player contract that Shirokov signed (assuming that he signed the standard KHL player contract as I have been told). Shirokov has assigned his future rights to his club team and the contract makes provision for him to buy out those rights in certain circumstances.
In Flood v. Kuhn, the Supreme Court simply upheld the 1922 anti-trust exemption. In 1998, Clinton signed the Curt Flood Act removing the historical anti-trust exemption. None of this applies to hockey.

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06-17-2009, 07:07 PM
  #365
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I can totally see how the NHL main office would want control of the compensation process. Beginning to wonder if perhaps Gillis made a bit of a rookie mistake in the way this deal was handled/announced (not a criticism, we all do it) either with CSKA or Bettman's office.

 
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06-17-2009, 07:08 PM
  #366
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Originally Posted by LeftCoast View Post
You can write anything you want into a contract, but getting it enforced is another thing. Restraint of trade, non-compete clauses, etc. all have to pass the reasonableness test. In such cases, the burden of proof for reasonableness is on the ex-employer, not the employee. The court starts with the assumption that the restriction is invalid.

The ex-employer needs to prove that the restriction is reasonable to protect business interest (such as trade secrets etc. not simply maintaining the services of the employee).

Such restrictions are generally to be found unreasonable if they are too broad in terms of geographic scope or in length of time. Since the geographical scope of the KHL is Europe, a reasonable restriction on an individual's right to work would likely be similarly scoped. Courts also consider asymmetry in bargaining power; say a 20 year old versus a professional hockey team.

I also don't think the Canucks will have to contest this in a Russian court. They will simply bring him over here and let CSKA try to win an injunction from a Canadian court. The right of an individual to work or trade in his profession is not something the courts are going to strip away without a really good reason.
When you are dealing with a professional athlete (or an actor or actress or singer) with rare and unique skills the courts look at things somewhat differently than the standard sort of non-compete case.

There is line of cases going back to Lumley v. Wagner in 1852 (a singer) dealing with performers who have "exceptional and unique knowledge, skill and ability". In such a case while a court could not force Shirokov to play for CSKA Moscow (or what ever KHL team may have his rights) (i.e. specific performance to render personal services) but it can grant injunctive relief to prevent a party from performing personal services for another party.

In fact the NHL SPC makes this clear (as does the KHL SPC) and imports the common law into the contractual language:
Quote:
NATIONAL HOCKEY LEAGUE
STANDARD PLAYER'S CONTRACT
(2005 FORM)
...
6. The Player represents and agrees that he has exceptional and unique knowledge, skill and ability as a hockey Player, the loss of which cannot be estimated with certainty and cannot be fairly or adequately compensated by damages. The Player therefore agrees that the Club shall have the right, in addition to any other rights which the Club may possess, to enjoin him by appropriate injunctive proceedings without first exhausting any other remedy which may be available to the Club, from playing hockey for any other team and/or for any breach of any of the other provisions of this SPC.
An example of the application of this principle was WARNER BROTHERS PICTURES INC v NELSON [1937] 1 KB 209 - you may know Ms. Nelson by her stage name of Bette Davis.
Quote:
The conclusion to be drawn from the authorities is that, where a contract of personal service contains negative covenants the enforcement of which will not amount either to a decree of specific performance of the positive covenants of the contract or to the giving of a decree under which the defendant must either remain idle or perform those positive covenants, the court will enforce those negative covenants; but this is subject to a further consideration. An injunction is a discretionary remedy, and the court in granting it may limit it to what the court considers reasonable in all the circumstances of the case ...

The cases before me is, therefore, one in which it would be proper to grant an injunction unless to do so would in the circumstances be tantamount to ordering the defendant to perform her contract or remain idle or unless damages would be the more appropriate remedy.

With regard to the first of these considerations, it would, of course, be impossible to grant an injunction covering all the negative covenants in the contract. That would indeed, force the defendant to perform her contract or remain idle; but this objection is removed by the restricted form in which the injunction is sought. It is confined to forbidding the defendant without the consent of the plaintiffs, to render any services for or in any motion picture or stage production for any one other than the plaintiffs.

It was also urged that the difference between what the defendant can earn as a film artiste and what she might expect to earn by any other form of activity is so great that she will in effect be driven to perform her contract. That is not the criterion adopted in any of the decided cases. The defendant is stated to be a person of intelligence, capacity and means, and no evidence was adduced to show that, if enjoined from doing the specified acts otherwise than for the plaintiffs, she will not be able to employ herself both usefully and remuneratively in other spheres of activity, though not as remuneratively as in her special line. She will not be driven, although she may be so tempted, to perform the contract, and the fact that she may be so tempted is no objection to the grant of an injunction.
At this point we do not know what position the NHL will take on the Shirokov contract. If it follows those from last off-season there will likely be some form of arbitration or investigation under the IIHF's auspices. Jason Krog had a KHL contract but it was determined by the IIHF that he had a valid out clause allowing him to sign with the Canucks.

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06-17-2009, 07:10 PM
  #367
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But...did he not actually sign a contract with CSKA first? And it appears part of the terms he freely agreed to was that there would be compensation to CSKA if he left CSKA - no matter where he went to play....?

If that is the case, this seems pretty cut and dried, CSKA is owed compensation. I'm a little surprised Auqilini hasn't simply written a check already. Is someone at NHL HQ telling him not to? Are there severe cap implications if he does?
The NHL forbids its teams from paying compensation to European clubs absent a transfer agreement with the IIHF and NHL.

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06-17-2009, 07:12 PM
  #368
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The NHL forbids its teams from paying compensation to European clubs absent a transfer agreement with the IIHF and NHL.
So...what is Gillis doing? I find it hard to believe nobody read the kid's existing contract before signing him to an NHL contract.

 
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06-17-2009, 07:12 PM
  #369
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I can totally see how the NHL main office would want control of the compensation process. Beginning to wonder if perhaps Gillis made a bit of a rookie mistake in the way this deal was handled/announced (not a criticism, we all do it) either with CSKA or Bettman's office.
As far as I can determine it was reported in Russia and not leaked by the Canucks.

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06-17-2009, 07:16 PM
  #370
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So...what is Gillis doing? I find it hard to believe nobody read the kid's existing contract before signing him to an NHL contract.
Gillis is a lawyer... and quite a good one. The position may well be that the RFA compensation clause under Shirokov's contract and as set out under Russian labour law should be ignored as it is not the sort of contractual obligation the NHL should recognize.

OTOH Bettman has said he is hopeful of getting an IIHF transfer fee agreement in place in the near future and he may not want to poke the Russian bear.

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06-17-2009, 07:19 PM
  #371
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Thanks, WC, that clarified a few things.

 
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06-17-2009, 07:33 PM
  #372
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When you are dealing with a professional athlete (or an actor or actress or singer) with rare and unique skills the courts look at things somewhat differently than the standard sort of non-compete case.

There is line of cases going back to Lumley v. Wagner in 1852 (a singer) dealing with performers who have "exceptional and unique knowledge, skill and ability". In such a case while a court could not force Shirokov to play for CSKA Moscow (or what ever KHL team may have his rights) (i.e. specific performance to render personal services) but it can grant injunctive relief to prevent a party from performing personal services for another party.
In Lumley v. Wagner, Wagner was still under contract to perform during the period in question. Lumley did not attempt to restrain Wagner beyond the term of the contract.

It still comes back to reasonableness.

Even MLB did not try to impose a global indefinite reserve clause.

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06-17-2009, 07:40 PM
  #373
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In Lumley v. Wagner, Wagner was still under contract to perform during the period in question. Lumley did not attempt to restrain Wagner beyond the term of the contract.

It still comes back to reasonableness.

Even MLB did not try to impose a global indefinite reserve clause.
It is my understanding (subject to correction) that Japanese baseball teams have a similar contract and as such MLB has to purchase the players rights even if there is no playing contract currently in force.

I believe this is so in soccer as well.

Since at the time MLB was basically the only game in town at an elite level it was pretty much global.

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06-17-2009, 07:49 PM
  #374
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Wow what a headache!!!

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06-17-2009, 07:58 PM
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Wow what a headache!!!
I cannot see it bothering Gillis all that much - look at all the negative press and criticism he endured before landing Sundin. he just keeps his eye on the puck and keeps going forward.

Never underestimate how stubborn and committed Gillis can be. Burke may talk the talk but Gillis walks the walk and has since he decided to take on Alan Eagleson when everyone told him it was not possible to take on the Eagle at the height of his power.

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