According to Nick Kypreos of sportsnet.ca, the NHL is rejecting the contract.
"Word I'm hearing is the league has rejected Kovalchuk 17 year NJ contract," Kypreos reported via Twitter. "NHL deems Kovy contract 'a retirement contract,' says it 'artificially drops cap hit.' Also states it's too overloaded the first 10 [years]."
TSN also reported that the deal was rejected "on the grounds that it circumvents the NHL's salary cap."
Kovalchuk agreed to sign the unprecedented 17-year deal on Monday. It would pay him $102 million dollars over the course of the contract, but it was heavily front-loaded. The contract would pay him $6 million each of the next two seasons, $11.5 million for the following five seasons, $10.5 million in the 2017-18 season, $8.5 million for the 2018-19 season, $6.5 million in 2019-20, $3.5 million in 2020-21, $750,000 the following season and $550,000 for the final five.
Because of the small price tag on the final five years of the deal, the cap hit for the Devils was only $6 million per year.