Salary Cap: Parity not really?

[New User Name]

Based on the amount of signings in the first hour of free agency a team that didn't make any of them really has nothing to worry about.

Are we naive enough to believe Edmonton didn't make financial offers to Lucic before 12:01pm on July 1 yet think that a random report would get the Leafs in trouble for a player they didn't sign and actually scared off with his in depth and overwhelming their proposal was?

Obviously I'm not talking a "random report"
If Stamkos or his agents came out (I don't think they would) and stated that in fact the Leafs did make a concrete offer before July 1, the league would treat that seriously.

 

[Jerkini]

Is that 5 years thing (re: Stamkos) true?

 

[New User Name]

Just because you play hockey for a Canadian NHL franchise doesn't imply you're a Canadian tax resident. All of this speculation on taxes seems so misinformed and ridiculous

Very true. Phil Kessels contract (when he was with the Leafs) included a hefty bonus. Because he is a resident of Florida, his signing bonus is only taxed in Canada at 15%.

 

[ACC1224]

Is that 5 years thing (re: Stamkos) true?

Doesn't seem to be, unless I can remember where I heard it.

 

[Jack Bauer]

Obviously I'm not talking a "random report"
If Stamkos or his agents came out (I don't think they would) and stated that in fact the Leafs did make a concrete offer before July 1, the league would treat that seriously.

Of course. But that will never happen so it's kind of a pointless discussion.

If the league was at all concerned with the process this would have been the perfect year to look into it as the activity just past noon proved there were financial discussions that shouldn't have taken place.

 

[Jack Bauer]

Doesn't seem to be, unless I can remember where I heard it.

I never heard anything about any term/money specifics.

The story goes that they met Monday evening, we brought in CEO's of major companies which is 100% allowed, Stamkos left that meeting and only wanted to talk to Yzerman as he was overwhelmed by the Leafs presentation and didn't want to continue that process.

Sounds like that's the point where he decided that there was no reason to move forward with looking at other organizations and had his agents start to wrap things up with Tampa.

 

[Wafflewhipper]

I don't click links, what does it say?

T-bay, Florida, Dallas and Nashville are the 4 states with 0% tax rates. Montreal is the highest tax rate followed by Manitoba etc.

Most states are significantly lower taxed than all Canadian provinces basically.

 

[Frk It]

Hasn't the tax structure been the same in these various markets for years now?

Why is this all of a sudden a factor for players? I don't remember ever hearing about Florida or Texas teams having this advantage prior to just recently with Stamkos.

 

[Jack Bauer]

Hasn't the tax structure been the same in these various markets for years now?

Why is this all of a sudden a factor for players? I don't remember ever hearing about Florida or Texas teams having this advantage prior to just recently with Stamkos.

I really don't think it is.

It's become more of a media obsession as they try breaking down random factors that may influence someone to go elsewhere.

I'm sure at some point teams would show a player what they'd earn in relation to others but it not something just getting on the radar. It's more of it being something new for the media to discuss to death while playing no bigger factor today then it has in the past when it was never discussed.

 

[Wafflewhipper]

Just because you play hockey for a Canadian NHL franchise doesn't imply you're a Canadian tax resident. All of this speculation on taxes seems so misinformed and ridiculous

The highest % of Nhl players are Canadians. You care to enlighten us because i don't understand what you mean at all.

 

[Frk It]

I really don't think it is.

It's become more of a media obsession as they try breaking down random factors that may influence someone to go elsewhere.

I'm sure at some point teams would show a player what they'd earn in relation to others but it not something just getting on the radar. It's more of it being something new for the media to discuss to death while playing no bigger factor today then it has in the past when it was never discussed.

Yeah, I mean couldn't Stamkos have compensated for the salary lost in taxes by more endorsement opportunities in Toronto?

I really doubt the basis for his decision was based on taxes.

 

[Joey Hoser]

Is there any actual proof that this has ever been an issue?

I don't think we have written record of a player signing in a particular place for the sole reason of taxation level, because that would be a really ****in' weird thing to have. Where would that even come from?

Obvious taxation levels will matter though. It affects how much you get paid, by a significant margin. I don't have any idea why you're trying to dismiss it.

 

[Wafflewhipper]

P.K. Subban is singing some Johnny Cash in Nashville ironically lol.

 

[Budsfan]

Hasn't the tax structure been the same in these various markets for years now?

Why is this all of a sudden a factor for players? I don't remember ever hearing about Florida or Texas teams having this advantage prior to just recently with Stamkos.

Hockey players are now making millions of dollars and now you can be talking millions in a contract, if signed in a tax friendly place.

If that's true, then why didn't they put a team in Quebec, it was supposedly because the Canadian dollar was so weak, ask yourself why that would matter.

They did, however, put one in Las Vegas, that hotbed of hockey.

Frankly it's been around for a while but now with Canadian Teams not in the playoffs, it becomes a real bone of contention.

 

[Wafflewhipper]

Hockey players are now making millions of dollars and now you can be talking millions in a contract, if signed in a tax friendly place.

If that's true, then why didn't they put a team in Quebec, it was supposedly because the Canadian dollar was so weak, ask yourself why that would matter.

They did, however, put one in Las Vegas, that hotbed of hockey.

Frankly it's been around for a while but now with Canadian Teams not in the playoffs, it becomes a real bone of contention.

Canadians need to relax on their expectations for their teams to win every year and be tolerant for complete rebuilds too. If our market is in agreement with a conplete rebuild i believe all Canadian Nhl cities would emvrace them too.

In reality with all the stumbling blocks to running a successful franchise in Canada, we should be selling off and rebuilding more than American teams. I hope fans of teams here come to realize you have to blow it up occasionally and build through the draft for atleast three years.

We would be wise to lower our expectations for another year as leaf fans i believe. If we turn out to be a surprise fine. I'm not holding high expectations tbis year though. We can beat this system and take the cup back. Hopefully we are the team that brings the cup back first.

 

[Jerkini]

It's hard to accurately comment considering the level expertise on the subject needed, but if the articles are correct in that players are earning approximately $2m extra per season in certain cities, then that's a vast enough number that absolutely needs to be taken into salary cap consideration.

 

[Budsfan]

We could be like the Yankees and spend as much as we want to heck with caps, or we could be like successful NBA teams and have a luxury tax but they don't share money with the have nots north of the border, so they can just spend and have super teams and why not, they get lots of revenue that way and can share it with the luxury tax, by the way do we get any of that monies?

 

[Wafflewhipper]

It's hard to accurately comment considering the level expertise on the subject needed, but if the articles are correct in that players are earning approximately $2m extra per season in certain cities, then that's a vast enough number that absolutely needs to be taken into salary cap consideration.

Simply put and i agree. Likely though it is another hurdle Canadian teams predominantly will be unfairly burdened with. I actually liked Canadian teams getting all these top draft picks this year.

 

[Daisy Jane]

Is that 5 years thing (re: Stamkos) true?

that's what is being floated ot there for a while now.
we basically offered the same amount of money Tampa did when Tampa's offer first came out.

He chose Tampa. because of the extra 3 years (which was given on the 29th - that was never on the table before that).

 

[BoredBrandonPridham]

The highest % of Nhl players are Canadians. You care to enlighten us because i don't understand what you mean at all.

Nationality doesn't mean anything for taxes, nor the nationality of the company you're working for, at least not in Canada and probably the US. If you play hockey for a Canadian NHL franchise, but your main residential home and family are elsewhere, it's likely you don't pay any Canadian tax at all so long as you spend less than 183 days (half a year) outside of Canada, which NHL players can likely make happen.

I don't know all the details myself, but I can certainly tell when a bunch of non-accountants are making a tax fuss about something they don't know anything about.

 

[TheProspector]

First off as others have stated when playing in Canada you are paid in US but you buy everything in Canadian meaning you are actually making more money than if you played in the states and made the exact same salary.

Secondly you are vastly underestimating what those with very high salaries can do with money to ensure that they pay the least amount of money in taxes.

This is because most people with very large incomes don't do it with salary. If you run your own business, there are many creative things you can do with your tax liability. If you're receiving your phat income in salary, no, there isn't actually a lot they can do.

 

[mix1home]

No it's not.

If your contact is 1 million US. At 15% exchange rate it's 1,150,000 Canadian.

Yeap. And then you suddenly realize that prices you pay for everything from food to BMW are 30% lower in USA, so now your 1mil US in Canada can only buy equivalent of 850K in US. Ever wondered why Black Friday is so popular in Canada even with our currencies where they are?

 

[Buds17]

I could see taxes playing a part if a number of other factors are equal, but we apparently offered considerably less term, aren't contending like TB is, and he's spent his entire career there. Unless he wanted to be a Leaf above all else, what transpired isn't surprising.

 

[Canada4Gold]

The numbers aren't as drastic as articles like that make you believe. For example you apparently pay tax for everywhere you play. So only half your games are in Tampa for Stamkos for example. Then there's also to take into account how signing bonuses work. How do they get taxed? Based on where you live? If you live in a state with no state tax can the team work around their bad taxes by paying out a contract in signing bonuses and still get the "cap bump" in their favour? Then there's everything people do to get around taxes, that can't as easily be quantified the same across the board.

I wouldn't hate a cap system where teams do get cap bumps based on tax but it wouldn't be as simple or as drastic as the writer of that article did, obviously that was just an example.

They'd need to work in the game location breakdown to figure out how much tax affects things(it's not as drastic as people pretend it is), then if the signing bonuses tax differently they'd have to take that into account too, so if a team uses them to get a player for less they lose from their "cap bump" whatever percentage of cap they gained by using signing bonuses.

I would like something like that to be incorporated but I'm not sure the league wants to get that complicated with the cap.

Also to add to the conversation earlier. Yes all contracts are paid out in USD so with a 15% exchange rate, and someone exchanging to Canadian Dollars a 1 million dollar contract gets them 1.15 million Canadian. However this money is just as valuable as 1 million USD. Often times you're paying more Canadian for the same commodity in USD. You're not gaining much if anything at all, and sometimes you may be losing.

Often times people make it seem like, because they're both called "Dollars" it seems like you're getting more money. If I got 1 million dollars and went and exchanged it for 107.24 million Japanese Yen I wouldn't be getting so much more money. I'd have more units of that currency but not more value. When buying thing with Yen I'm paying a lot more Yen than Dollars.

 

[Golden_Jet]

That's correct you pay taxes on the amount you make in each state and province over the year. Signing bonuses taxed differently.