Devils fined and lose draft picks for first Kovalchuk contract

NEW YORK (Reuters) - The New Jersey Devils were fined $3 million and will forfeit two draft picks for trying to circumvent the salary cap when they submitted a contract for high-scoring Ilya Kovalchuk in July, the NHL ruled on Monday.

In addition to the hefty fine, the league said the Devils must forfeit their third-round pick in 2011 and a first-round pick in one of the next four drafts.

"We disagree with the decision. We acted in good faith and did nothing wrong," Devils General Manager Lou Lamoriello said in a statement. "We will have no further comment."

Kovalchuk, who has scored 40 or more goals in each of the past six seasons, was the most sought after unrestricted free agent on the market this year.

He signed a blockbuster $102 million, 17-year contract with New Jersey in July that was rejected by the NHL, which claimed the contract was front-loaded.

The Russian winger was scheduled to earn $95 million over the first 10 years of the contract and only $7 million over the last seven, which reduced the annual salary cap hit to the Devils to $6 million.

An arbitrator ruled in favor of the NHL in August and rejected the Russian sniper's deal. But Kovalchuk later agreed to a 15-year, $100 million contract that the league approved.

The NHL said it is up the Devils when, within the next four years, they will forfeit their first-round pick and that they must inform the league following the conclusion of the Stanley Cup Final in the calendar year in which the choice will be forfeited.

"The league now considers the matter closed and will have no further comment on the situation, including with respect to the discipline that was imposed today," the NHL said in a statement.

(Reporting by Frank Pingue in Toronto; editing by Nick Mulvenney)