NBC article ranking NHL cities in for tax

[Locke]

Originally Posted by Violator

With the amount of money these guys are making how much tax are they really paying you'd think they would have a good accountant and Lawyers.

In hockey there are limits as to waht they're allowed to do, its not like each player is a corporation thats spinning dividends off or divesting their income into investments, as per the NHL CBA I think they all have to be employees.

By the same token, there are still some loopholes and ways around that kind of thing as well.

[Brewmaster]

Making the assumption that this article is close to accurate and the athletes playing for these teams are paying that tax rate, that gives the Flames and Oilers a huge advantage. For players signing as free agents, after-tax dollars would be their primary focus (city, team & family aside). PK Subban's new $9M/year deal in Montreal would be the equivalent of $6.7M/year in Alberta.

Using a $69M cap in 2014/15 we could convert this to an 'after tax' salary cap of:

Calgary $42.4M
Edmonton $42.4M
....
Anaheim $32.4M
LA $32.4M
San Jose $32.4M
Montreal $31.7M

[seattleflamer]

Originally Posted by Locke

In hockey there are limits as to waht they're allowed to do, its not like each player is a corporation thats spinning dividends off or divesting their income into investments, as per the NHL CBA I think they all have to be employees.

By the same token, there are still some loopholes and ways around that kind of thing as well.

Not for profit organizations. Golf charities seem to be very popular with hockey players right? Sounds innocuous enough for worthy causes. Events like these are setup and funded through charitable trusts, foundations or pooled together via donor advised funds and are tax havens for entertainers.

They get positive branding, current year tax deduction, limitless tax deferral on the donated amount, expense accounts that would make auditors blush and the ability to hire family or friends to run the non profit. A lot of abuse and loopholes with charitable trusts, CRUTs etc..

[Weitz]

Originally Posted by Brewmaster

Making the assumption that this article is close to accurate and the athletes playing for these teams are paying that tax rate, that gives the Flames and Oilers a huge advantage. For players signing as free agents, after-tax dollars would be their primary focus (city, team & family aside). PK Subban's new $9M/year deal in Montreal would be the equivalent of $6.7M/year in Alberta.

Using a $69M cap in 2014/15 we could convert this to an 'after tax' salary cap of:

Calgary $42.4M
Edmonton $42.4M
....
Anaheim $32.4M
LA $32.4M
San Jose $32.4M
Montreal $31.7M

I think the only advantage to this is if you could convince someone to take a paycut and argue they would make more.

But in reality if they could make 9 million in montreal they would ask for 9 million here.

[timbit]

Originally Posted by Weitz

I think the only advantage to this is if you could convince someone to take a paycut and argue they would make more.

.

It is fact.

No need to argue.

[Brewmaster]

Originally Posted by Weitz

I think the only advantage to this is if you could convince someone to take a paycut and argue they would make more.

But in reality if they could make 9 million in montreal they would ask for 9 million here.

If players don't understand that what goes into their bank account is after tax, then they need to find a new agent. I suspect the tax consideration is a much larger part of free agent negotiating than we see from the outside.

[Weitz]

I meant if you get a guy to sign here for 8 million instead of 9 million... And argue well you would make more than playing in Montreal!

It wouldn't work because they would still ask for 9 million and know they just get more money in the bank.

[Brewmaster]

How could it not work? Let's say I am a 30 year old UFA looking to cash in and I get 3 identical offers from Calgary, Montreal and Toronto at 9 Million per season gross salary. Here are how the offers break down for take home pay according to the NBC study:

Calgary
$5.5M/season net

Toronto
$4.6M/season net

Montreal
$4.1M/season net

That is a huge difference in what goes into your bank account. The GM, the agent and the player are all aware of this and would negotiate accordingly.

[Weitz]

Originally Posted by Brewmaster

How could it not work? Let's say I am a 30 year old UFA looking to cash in and I get 3 identical offers from Calgary, Montreal and Toronto at 9 Million per season gross salary. Here are how the offers break down for take home pay according to the NBC study:

Calgary
$5.5M/season net

Toronto
$4.6M/season net

Montreal
$4.1M/season net

That is a huge difference in what goes into your bank account. The GM, the agent and the player are all aware of this and would negotiate accordingly.

Thats not what I was saying. I thought someone mentioned you could lure people for a contract for less money.

For example 8 million a year here is similar to 9 million a year in Toronto after tax. Since they are the same take home amount I thought some said you could use that to get someone to sign for 8 million instead of 9 million which wouldn't happen.

[Brewmaster]

Originally Posted by Weitz

Thats not what I was saying. I thought someone mentioned you could lure people for a contract for less money.

For example 8 million a year here is similar to 9 million a year in Toronto after tax. Since they are the same take home amount I thought some said you could use that to get someone to sign for 8 million instead of 9 million which wouldn't happen.

I am saying that it would happen, all other things being equal. A player signing for $8M/season would theoretically take home $4.9 in Alberta, which would still be significantly more than playing for $9M in Toronto or Montreal. The only risk to the player would be if the team trades him to a city with a higher tax rate after he signed in Alberta at a 'tax friendly' discount.

This being said, there are certainly many more complexities to the tax structure than what this article implies. American citizens would have to file and pay American taxes even if they played in a Canadian market with the recent system changes. I would be interested to hear what an NHL agent would say on the matter, since they probably work through this as part of the negotiation with teams.

[troutman]

Could be you have far greater endorsement potential in Toronto and Montreal, compared to Calgary and Edmonton.

[Hack&Lube]

Originally Posted by troutman

Could be you have far greater endorsement potential in Toronto and Montreal, compared to Calgary and Edmonton.

Yeah player endorsements/sponsorships and their profile is way higher in major cities.

Cammelleri had a few contracts left over from his Montreal days but I don't see any other Flames players getting those endorsements aside from bad Country Hills Toyota ads.

[Brewmaster]

Other than a few superstar players, I don't think endorsement deals make up much of a players pay. Base on the article below, only 4 players make more than $1M/season on endorsements and I would say that has more to do with their individual success and team success than the city they play in. Less than 10 players have endorsements greater than $250,000/year if you believe the article... the source might be a bit questionable given they can't get Jarome's name correct.

http://sportschatplace.com/nhl-picks...ngs-in-the-nhl

[Machiavelli]

Originally Posted by Brewmaster

Other than a few superstar players, I don't think endorsement deals make up much of a players pay. Base on the article below, only 4 players make more than $1M/season on endorsements and I would say that has more to do with their individual success and team success than the city they play in. Less than 10 players have endorsements greater than $250,000/year if you believe the article... the source might be a bit questionable given they can't get Jarome's name correct.

http://sportschatplace.com/nhl-picks...ngs-in-the-nhl

Subban must make more than 250K on endorsements.