The league originally docked the club a first-round pick in either 2011, 2012, 2013 or 2014 along with a third-rounder in 2011 and US$3 million for trying to give the Russian star a contract that lasted until his mid-40s just to even out the cap hit.
Instead, the Devils will be given the 30th pick in the draft and thus not eligible for the lottery if they don't make the playoffs. The pick cannot be traded.
New Jersey's fine was also reduced, the league announced. TSN, which first reported the story, said the team was getting back US$1.5 million.
Kovalchuk leaving for the KHL last summer appeared to be the reason for the change.
"The Devils recently applied to the League for reconsideration and relief from a portion of the original penalty, citing primarily changes in circumstances which, in the club's view, changed the appropriateness of the sanctions initially imposed," the NHL said in a statement. "After due and thorough consideration, the League has decided that a modification of the original circumvention penalty associated with the Kovalchuk contract is warranted and, accordingly, has amended the sanctions."
The league said it does not plan to comment further on the modified punishment.
New Jersey opted to keep its first-rounder each year, taking Adam Larsson fourth in 2011, Stefan Matteau 29th in 2012 and trading its 2013 pick to the Vancouver Canucks for Cory Schneider when the draft was at Prudential Center in Newark.
Based solely on the reverse standings as of Thursday morning, the Devils would have had the 11th pick in the 2014 draft, absent any lottery changes.
General manager Lou Lamoriello and the Devils signed Kovalchuk to a US$102-million, 17-year deal in the summer of 2010 when he was a free agent. They had acquired him in a February trade with the Atlanta Thrashers.
The league ruled it to be ineligible.
"The contract has been rejected by the league as a circumvention of the collective bargaining agreement," deputy commissioner Bill Daly said in a statement July 20, 2010. "Under the CBA, the contract rejection triggers a number of possible next steps that may be elected by any or each of the NHLPA, the player and/or the club. In the interim, the player is not entitled to play under the contract, nor is he entitled to any of the rights and benefits that are provided for thereunder."
The Devils amended their deal with Kovalchuk to be for US$100 million over 15 years, and that was accepted.
In September 2010, the NHL announced the Devils were being punished with a forfeiture of draft picks and US$3 million for violating Section 26.13(c) of the collective bargaining agreement that has to do with cap circumvention. New Jersey did not have any of its cap space taken away.
"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 Sept. 13 statement read.
Kovalchuk played 195 more games for the Devils under that contract before choosing to "retire" this past off-season and head home to play for St. Petersburg of the KHL. New Jersey accepted the decision and the rest of the contract was voided.Suggest a correction