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Unlocked Athletic content that includes their best stuff from this year.

This story is a great read on the expenses for these guys that most would not consider.

Not like they are in soup lines at Christmas or anything but it does expose the perils of being a young guy with a bunch of money if you are unaware of hw things work.

The numbers look huge to a kid whose main source of income in the previous three or four summers is washing dishes in a relative’s restaurant for $8 an hour: $643,000 (all figures U.S.) to play in the big league, $65,000 to play in the minors. The deal includes a signing bonus of about $260,000, which in this case is paid out in six equal installments over the three years of the entry-level contract.

So what’s the first thing you do when you’re 19 and that first check arrives?

“I bought a Lexus ISF,” Buffalo Sabres defenceman Marco Scandella said. “It was a good life lesson.”

“It was hilarious, he came to my parents’ backyard … he had about $300,000 saved up, I asked him what it’s invested in, do you like how they’re investing it?” Shannon said, who now runs Fortra V, a sports management consultancy that works with more than a dozen hockey players. “And he was like, ‘What do you mean?’ Well, what stocks do you own, do you have any ETFs and he’s looking at me like I’m speaking a different language.”

“I had no idea what I was doing,” Scandella said.

First thing: roughly $641,000 will be returned to the league via the escrow mechanism in the collective bargaining agreement between the owners and the NHLPA. Hockey players are employees of their respective teams and it’s a union shop; their income taxes are deducted at the source, the same is true for things like escrow.

So $4.75 million is de facto $4.109 million after escrow.

Because Scandella plays in the U.S., he is eligible to contribute to a 401(k) retirement account; the maximum contribution limit for 2019 is $19,000. Thus, the overall number drops to $4.090 million.

The U.S. federal marginal tax rate is 37 percent, according to Shannon’s estimations a player making $4.75 million can expect to pay roughly $1.84 million in income tax. Players also pay between zero percent (in Texas, Nevada, Tennessee, Florida and, soon, Washington) and 13.35 percent (California) in state tax. Canadian-born players who play in their home country can expect to be dinged for average combined tax rates that range from 47.2 percent in Alberta to 52.73 in Ontario.

https://theathletic.com/1133282/2019...-as-you-think/