Salary cap ideas on reforms

[Gaud]

What cap friendly lacks is all of the various write-offs, deductions, investment structures and so on and what player uses what. Without seeing a year end tax return, none of us really know what they pay.

The net is entirely dependent on the above mentioned. Yes, tax accounts/finance people can figure that out for you, but that information typically isn't privy to the league/team.

Yeah you are right, it doesn't cover the write-offs, but it doesn't counter the argument that the player will touch less money in some markets than others. My argument isn't that the players will pay the entirety of the percentage on capfriendly or even that some locations have deductions that may change the ranking of that list; im saying that there are markets where you will have more money in your pocket over others, and some to the point where it is markedly advantageous to go there.

Also, these writeoffs dont affect the cap hit, meaning that if Superstar A wants X amount net money, Team A needs to pay X, while Team B may need to pay X+10%

I was thinking some kind of calculator like the one on cap friendly where the cap is augmented according to those number for higher-taxed areas. If there are deductions that are decidedly advantageous in some markets, im all for that being part of the considerations. I am just trying to address how some teams would have to go over the cap by X (10%?) to have the same team as in another market.

 

[dekelikekocur]

Yeah you are right, it doesn't cover the write-offs, but it doesn't counter the argument that the player will touch less money in some markets than others. My argument isn't that the players will pay the entirety of the percentage on capfriendly or even that some locations have deductions that may change the ranking of that list; im saying that there are markets where you will have more money in your pocket over others, and some to the point where it is markedly advantageous to go there.

Also, these writeoffs dont affect the cap hit, meaning that if Superstar A wants X amount net money, Team A needs to pay X, while Team B may need to pay X+10%

I was thinking some kind of calculator like the one on cap friendly where the cap is augmented according to those number for higher-taxed areas. If there are deductions that are decidedly advantageous in some markets, im all for that being part of the considerations. I am just trying to address how some teams would have to go over the cap by X (10%?) to have the same team as in another market.

I don't honestly think it's a concern of the leagues. There's what ~800 players in the NHL? You would need either one of the Big 4 to take it on or a few smaller firms to handle that many clients and all of the structures. And that's assuming the individual players cared to share that info with the league/team to begin with.

Then we get into endorsements, other tax schemes etc. Then you get into recent studies which reflect on tax burden by state (looks at the total tax picture and not just income).

State and Local Tax Burdens, Calendar Year 2022

Tax burdens rose across the country as pandemic-era economic changes caused taxable income, activities, and property values to rise faster than net national product. Tax burdens in 2020, 2021, and 2022 are all higher than in any other year since 1978.

taxfoundation.org

 

[StreetHawk]

I'd like to see the RFA process changed.
Step 1- add a 1-2 year ELC extension/ team option that's matrix/slot based
Step 2- remove the right match Offersheets for RFA's that have had their option expire

For the option team can either negotiate a standard SPC as they do now, or elect to exercise their ELC option. Players do not have RFA rights upon conclusion of ELC

ELC option calculates the players contract via formula, something like the greater of the their actual year 3 earnings x 1.2, or their hypothetical earnings if they were eligible for all schedule A&B bonuses, at Schedule rates. Player elects 1 or 2 years.

Upon conclusion of either a negotiated SPC that doesn't get them to UFA, or their ELC option, the player is an RFA subject to offersheet, but the team can't match.

Might as well just lower UFA age down than have all of these restrictions. This might be the price to pay for the NHL to drop contract lengths down to 6/5 or 5/4 with buyout % adjusted down and what not.

 

[Golden_Jet]

Yeah you are right, it doesn't cover the write-offs, but it doesn't counter the argument that the player will touch less money in some markets than others. My argument isn't that the players will pay the entirety of the percentage on capfriendly or even that some locations have deductions that may change the ranking of that list; im saying that there are markets where you will have more money in your pocket over others, and some to the point where it is markedly advantageous to go there.

Also, these writeoffs dont affect the cap hit, meaning that if Superstar A wants X amount net money, Team A needs to pay X, while Team B may need to pay X+10%

I was thinking some kind of calculator like the one on cap friendly where the cap is augmented according to those number for higher-taxed areas. If there are deductions that are decidedly advantageous in some markets, im all for that being part of the considerations. I am just trying to address how some teams would have to go over the cap by X (10%?) to have the same team as in another market.

It’s quite complicated, more so with 7 Canadian teams.
Matthew’s for instance, American players that spend 1/2 the year in the states at their principal residence , but play for a Canadian team.
He gets a big tax discount because 95% of his salary is a signing bonus, he can get taxed at something like 15% on a big portion of that. Marner or JT don’t get that same relief as they are Canadians.

Now if team doesn’t include big signing bonuses, then could use RCA’s,( though not as good as the signing bonus version)

How do you account for teams that, can or cannot provide the signing bonus, to pay less tax.

This is literally one example of numerous nuances, that would be hard to implement.

What happens when a state or province changes the tax percentages, or alters some other rules around tax.

It would be nice, but just seems hard to implement.

 

[WTFMAN99]

Maybe lower the salary cap while concurrently only counting a player's take home pay as their cap hit?

Kucherov's 9.5M probably nets him the same or better than Matthews' 13.25M salary

That does not create an equal playing field.

 

[Golden_Jet]

Maybe lower the salary cap while concurrently only counting a player's take home pay as their cap hit?

Kucherov's 9.5M probably nets him the same or better than Matthews' 13.25M salary

That does not create an equal playing field.

Matthews pay less tax than Kuch probably, at least similar, he’s unique with his signing bonus, and playing in a different country, with principal residence in US.
See post above yours.

 

[WTFMAN99]

Matthews pay less tax than Kuch probably, at least similar, he’s unique with his signing bonus, and playing in a different country, with principal residence in US.
See post above yours.

Informative...Matthews is a bit unique because of location he is playing and his passport.

Harder for Marner or JT perhaps?

I personally just want to even the playing field as much as possible.

 

[Golden_Jet]

Informative...Matthews is a bit unique because of location he is playing and his passport.

Harder for Marner or JT perhaps?

I personally just want to even the playing field as much as possible.

Ya JT and MM can’t get the 15% rule, as Canadian. AM must spend a 183 days I believe in the US to get it, and have a principal residence there.

This is what JT is fighting with the CRA I believe, on the year he left the NYI in the summer, he got a signing bonus in Toronto, (so tried for the 15% on the signing bonus portion)
CRA stance could be the 183 days or possibly the principal residence (not sure just taking a stab at reason).

 

[4thline]

Might as well just lower UFA age down than have all of these restrictions. This might be the price to pay for the NHL to drop contract lengths down to 6/5 or 5/4 with buyout % adjusted down and what not.

I see it as a give and take- teams get 1-2 more cheap years if they elect to use the option, players get more freedom- but the team still gets compensated unlike if UFA was lowered

 

[Osakahaus]

Contract restructures should be possible in the NHL

 

[StreetHawk]

Contract restructures should be possible in the NHL

Would need to alter cap calculations.

In the NFL, how cap charges work, is that anything declared as a "Signing Bonus" can be pro-rated over the length of the contract, even with the team adding voidable years. Base salary and roster bonuses, team takes a cap hit of that amount each year. Teams regular convert part of a scheduled base salary into a bonus to push the cap charges into the future.

NHL currently averages the cap hit. So, if a player was paid more than the cap hit taken to date, what happens to that say $4 million that the player was paid but has not hit the salary cap if you want to do a contract restructure? And if the player doesn't want to restructure, then what? Or is this only for players who are willing to do it?

 

[Qwijibo]

Contract restructures should be possible in the NHL

You think the lockouts over a salary cap were long? Try taking guaranteed contracts away from the players. Lol