THN: What a NHL player pays in taxes depending on team

[Enoch Root]

Originally Posted by FlamesAddiction

Sales tax would seem like something that would be more applicable to straight-up cost of living comparisons since they are reflected in prices.

It would be interesting to see some kind of ranking if you factor in taxes and cost of living though. Like which markets will make you richer overall.

A cost of living factor would be interesting, but I don't think it matters a great deal for athletes, as they aren't burning their entire salary. Large homes, yes, but anyone making more than lower-end contracts has or will have more than one home anyway, so location isn't a huge factor in that regard. (Plus, home prices rise, so even if expensive in that city, they'll get it back when they leave.

More importantly, I think, is savings. When you make several million, you better not have a 100% burn rate, you better be building significant equity. And in that regard, cost of living is irrelevant. The only thing that matters is how much am I clearing, after tax?

[butterfly]

Originally Posted by Enoch Root

For the ones that don't exercise it - are they getting a higher number to stay (because of their tax environment)? It doesn't require players hitting the open market for this to have an effect.

I don’t know. Are they? Or does “demanding” an extra year from the current team make all these problems go away?

I’d like to do a scatterplot of win% and the tax list just to read the explaining away, but I don’t have my computer.

[Tiger]

what I would want to see added to this is a cost of living adjuster. I'd assume with cost of living then NYR and LA would probably go to the top.

Also probably needs property tax in comparable neighbourhood. Property taxes in good school districts in the states does add up too.

[butterfly]

Yeah. States that have zero income tax transfer the burden to property taxes. So what makes optimal financial sense is to max your income and live in as modest a place as possible. They aren’t fantastic places to retire because of that. In Texas you can mitigate your tax burden by claiming a homestead exemption on your primary residence.

[GreenLantern2814]

Now that everyone knows about all these deferred money deals, I assume Canadian teams will deploy that liberally.

Seems like a pretty elegant way to get around the tax issue without altering the CBA.

Originally Posted by butterfly

You can buy a really impressive house in Dallas with a $3M salary. In Seattle it will be nice but nothing special.

Because Dallas sucks and Seattle is nice.

[Oil Stain]

Originally Posted by YyjFlames

It's nearly $400k and on a three year contract at $3m a year, it's well over a million. On an 8-year, 10 million contract, it's $10m in the player's pocket (Tkachuk, for example, is taking home $5m more in Florida than if he had stayed in Calgary with the deal he signed).

Winning and lifestyle are important, but that's a lot of cake to think that it's not a big deal.

This is a fantastic piece. Old school informative journalism.

https://cardinalpointathleteadvisors...ax-calculator/

There is a website that shows this. You can punch in the numbers and compare cities. Numbers appear to be a little different, but not much.

There is a reason teams like Tampa get "sweetheart" deals and others don't.

I personally think the cap should be calculated post tax. Some cities are already fighting weather and desirability. At least taxes you can even out.

[Strange Brew]

This is a great analysis. Two things struck me:

Savings of up to $390K on $ million in earnings is extremely consequential, and I'm surprised anyone would think it isn't. On an after tax basis, your pay is almost 28% higher in Seattle vs. Montreal. Compound that over a few years and it is massive.

It also shows the great benefit of athletes wanting to defer their money. For an athlete in California, that is a potential 13% kicker (depending where you choose to live after playing) to your after tax rate of return to for each dollar you defer.

[Goriders]

That is a boat load of tax. Big advantage for the lower tax regions.

[butterfly]

Originally Posted by Strange Brew

This is a great analysis. Two things struck me:

Savings of up to $390K on $ million in earnings is extremely consequential, and I'm surprised anyone would think it isn't. On an after tax basis, your pay is almost 28% higher in Seattle vs. Montreal. Compound that over a few years and it is massive.

It also shows the great benefit of athletes wanting to defer their money. For an athlete in California, that is a potential 13% kicker (depending where you choose to live after playing) to your after tax rate of return to for each dollar you defer.

You’re ignoring the time value of money. Would you rather have a high taxed dollar now or a moderately taxed dollar in 10 years?

[GreenLantern2814]

Originally Posted by butterfly

You’re ignoring the time value of money. Would you rather have a high taxed dollar now or a moderately taxed dollar in 10 years?

I myself would love to continue drawing $1 million check from my employer 10 years after I left.

Call me old-fashioned.

[butterfly]

Originally Posted by GreenLantern2814

I myself would love to continue drawing $1 million check from my employer 10 years after I left.

Call me old-fashioned.

When you could have had the money the entire time, directed the investment, and pulled whatever check you needed.

I’ll happily plan you a fixed benefit retirement like that. I wouldn’t advise it, because it isn’t in your best interest, but simplicity can sell.

[Enoch Root]

Originally Posted by butterfly

You’re ignoring the time value of money. Would you rather have a high taxed dollar now or a moderately taxed dollar in 10 years?

They were referring to deferred contracts like the one Vatrano just signed. It isn't a dollar now vs a dollar later, at a lower tax rate. It's the PV now at a high tax rate vs the FV later (i.e. pre-tax equivalents), at a lower tax rate.

[Strange Brew]

Originally Posted by butterfly

You’re ignoring the time value of money. Would you rather have a high taxed dollar now or a moderately taxed dollar in 10 years?

No that is not how deferred compensation plans work. Your deferred comp continues to earn a return (tax free) until it is paid out.

[GreenLantern2814]

Originally Posted by butterfly

When you could have had the money the entire time, directed the investment, and pulled whatever check you needed.

I’ll happily plan you a fixed benefit retirement like that. I wouldn’t advise it, because it isn’t in your best interest, but simplicity can sell.

But you couldn’t have both - you can have whatever massive salary you decide now, plus ten future years of $900k in a lower tax jurisdiction.

Or you can have all of it now and invest it and make it up later.


Since at this point we are dealing with the funniest of money, just do what makes you delighted the most on July 1 the next 13 years.

Either way, there’s no point pretending anyone in this situation hasn’t already won.

[troutman]

Do players in Canada have greater opportunity for endorsements?

[blankall]

Originally Posted by troutman

Do players in Canada have greater opportunity for endorsements?

Crosby, even though he played in a USA market, seemed to have a plethora of Canadian endorsements. If you are the big name in hockey, you get the big sponsorships, regardless of what market you play in. There's not really a huge amount of endorsement deals beyond that.

Perhaps you might have more opportunity for smaller local endorsements if you play in a big hockey market. Is Brady Tkachuk promoting Don's Discount Auto in Kemptville, Ontario?

[Enoch Root]

Originally Posted by troutman

Do players in Canada have greater opportunity for endorsements?

good question

less competition (from other athletes), but they probably earn less as well (other than maybe Toronto)

[Strange Brew]

You don't see much in the local market for Flames players. Lanny was making some spare change for Apollo Muffler and that fur company back in the day.

Maybe they get something from the hockey equipment companies?

[sureLoss]

I also read that the agent's fee for endorsements can reach as high as 50%. So not as lucrative as one might think.

[FlamesAddiction]

Originally Posted by troutman

Do players in Canada have greater opportunity for endorsements?

I have no data or anything to back it up, but my gut feeling is that for the superstar players, it doesn't matter. A superstar player in the states can still get endorsement deals with big companies that do business in Canada and the U.S.

For lower profile players, I think getting local and regional endorsement deals in Canada is probably easier just based on the popularity are visibility of those players in Canadian markets compared to many American markets.