THN: How NHL players get paid and their taxes.

[Fugu]

In case you haven't seen it yet, THN has revamped its website and has added several new features and writers. Rand Simon is a certified NHLPA agent from Newport Sports Management Inc., who will contribute weekly articles on subjects that might be of interest to the Business of Hockey readers. He finally explains what happens to an NHL's players paycheck and who else gets a piece of the pie. Players are paid every two weeks during the regular season, but here's how the rest of it breaks down and how player agents track it.

Rand Simon blog at THN.com:

The first paycheck typically arrives in mid-October and the last one in mid-April, making for 13 pay periods throughout the season.
...

The first step is to calculate the player's daily rate of pay. This season there are 187 days for NHL players and 194 for those in the AHL. So, a player with a salary of $1 million in the NHL earns $5,347.59 per day before escrow while an AHL player with a salary of $50,000 will receive $257.73 per day.

Players in the minors are not subject to escrow even if they are on a one-way contract. Therefore, a player such as Denis Gauthier is actually making more money by being in the AHL than he would if he were in the NHL and subject to an escrow withholding of 9.5 percent.
...

In fact, players are responsible for paying tax in every state (and some cities) in which they play and earn above a certain income threshold. One player whose file I was working on recently and is currently with the St. Louis Blues had to file all the following returns in 2006: United States and Canadian Federal, States of Arizona, North Carolina, Minnesota, Missouri, Ohio, California, Colorado, New Jersey, New York, Massachusetts, Illinois, Pennsylvania and the City of St. Louis.

This won't be news to many here, but it's nice to have it all in one place for future reference and searches.

Click to read more...

 

[Timmy]

Q: "You see the size of Weight's entourage?"


A: "Those are his accountants."

 

[RandV]

So are agents accountants or lawyers? That's one thing I've been wondering about. In the old NHL, an agent would attempt to obtain the most $$$ possible for his client, and recieve a percantage of that amount for himself. In the new cost-certainty NHL however, players are now guaranteed 54% of revenue. So aside from undercutting fellow PA members what value is there paying an agent 10% or whatever they make to negotiate a contract? You could say they earned their money before the lockout, but if they're making 10% now they're just taking in a fixed 5.4% of total revenues.

 

[coolguy21415]

So are agents accountants or lawyers? That's one thing I've been wondering about. In the old NHL, an agent would attempt to obtain the most $$$ possible for his client, and recieve a percantage of that amount for himself. In the new cost-certainty NHL however, players are now guaranteed 54% of revenue. So aside from undercutting fellow PA members what value is there paying an agent 10% or whatever they make to negotiate a contract? You could say they earned their money before the lockout, but if they're making 10% now they're just taking in a fixed 5.4% of total revenues.

From the NHL, sure. Agents negotiate other contracts as well such as endorsement, advertising, etc.

 

[oilers9799]

Agents typically take a 3% commission, the NHL does not have a commission cap like some other leagues. But agents take a 10-15% commission on endorsements because the ability to negotiate endorsements is more conducive to an agent's ability. Most agents are lawyers but some agents' practices have a finance component so they can assist players in financial management.

 

[RandV]

Agents typically take a 3% commission, the NHL does not have a commission cap like some other leagues. But agents take a 10-15% commission on endorsements because the ability to negotiate endorsements is more conducive to an agent's ability. Most agents are lawyers but some agents' practices have a finance component so they can assist players in financial management.

Ok, that makes a lot more sense.

 

[kdb209]

Agents typically take a 3% commission, the NHL does not have a commission cap like some other leagues. But agents take a 10-15% commission on endorsements because the ability to negotiate endorsements is more conducive to an agent's ability. Most agents are lawyers but some agents' practices have a finance component so they can assist players in financial management.

[Arli$$'s Tombstone]

He always gave 95%.

[/Arli$$'s Tombstone]

Ob Hockey reference - JR guest starred on Arli$$ three times.

 

[braindead]

I'd like to see him write about the tax impact on comparing salaries from different franchises (perhaps he already has). For instance, there is no state income tax in Tennessee (also true of Texas and perhaps NC and Fla?) so $3M goes further than, say, $3M from a New York team (allowing Mike Modano to feed his dogs as compared to Sean Avery probably being forced to keep a turtle as a pet). I wonder if West pays less in taxes than East when visiting other cities-- I would guess yes. If so, the change in schedule could cost players in the West and save Sid the Kid and friends money by going west more.

Would any of this be a consideration in weighing offers for a free agent?

 

[missK]

Yes, Lecavalier pays no state tax for his 41 regular season games in TAMPA and the 4 away games vs the Panthers in Sunrise. So he enjoys more of his earned money than say, if he played in Montreal

 

[The Thomas J.*]

In case you haven't seen it yet, THN has revamped its website and has added several new features and writers. Rand Simon is a certified NHLPA agent from Newport Sports Management Inc., who will contribute weekly articles on subjects that might be of interest to the Business of Hockey readers. He finally explains what happens to an NHL's players paycheck and who else gets a piece of the pie. Players are paid every two weeks during the regular season, but here's how the rest of it breaks down and how player agents track it.

Rand Simon blog at THN.com:




This won't be news to many here, but it's nice to have it all in one place for future reference and searches.

great write up

 

[Kagee*]

"The first paycheck typically arrives in mid-October and the last one in mid-April, making for 13 pay periods throughout the season. "

This helps with calculations, thanks for the share!

 

[leoleo3535]

I'd like to see him write about the tax impact on comparing salaries from different franchises (perhaps he already has). For instance, there is no state income tax in Tennessee (also true of Texas and perhaps NC and Fla?) so $3M goes further than, say, $3M from a New York team (allowing Mike Modano to feed his dogs as compared to Sean Avery probably being forced to keep a turtle as a pet). I wonder if West pays less in taxes than East when visiting other cities-- I would guess yes. If so, the change in schedule could cost players in the West and save Sid the Kid and friends money by going west more.

Would any of this be a consideration in weighing offers for a free agent?[/QUOTE]

Taxes are a huge consideration.
Alberta has no taxes as well.
Most agents charge 3-8%......above 5 is rare.
Keep in mind in most cases the agent has worked on the players behalf for free years prior to the player ever turning pro...and then most don't turn pro so the agent has worked for 2, 3, 4, 5, 6 years on the players behalf for free and never ever will see a nickel.

 

[Jumptheshark]

Agents typically take a 3% commission, the NHL does not have a commission cap like some other leagues. But agents take a 10-15% commission on endorsements because the ability to negotiate endorsements is more conducive to an agent's ability. Most agents are lawyers but some agents' practices have a finance component so they can assist players in financial management.

it must have gone down

3 former nhl players who I played junior hockey with paid their agents an average of 8 to 12% commission on their contracts

I had an agent briefly when it looked like I might be good enough for the deep minors--but that dream vanished quickly when I got the "look for a real job" talk from a coach(even on a bad teams I played on 3rd 4th lines--so i knew I sucked already)

 

[mike14]

Figure this would be an appropriate place to ask:
Is it listed in the CBA that players salaries must be made public?

It seems kind of odd that something that should be quite private is published for anyone and everyone to see.

 

[jkrdevil]

I don't know if it is in the CBA, but it is the NHLPA that publishes. The reason for that is so everyone knows what each player makes and that ends up driving up the salaries as top players in general want to be paid the most.

Before salaries were published teams in negotiations would make it seem that the players were paid more in comparison to their peers than they actually were.

 

[mike14]

I don't know if it is in the CBA, but it is the NHLPA that publishes. The reason for that is so everyone knows what each player makes and that ends up driving up the salaries as top players in general want to be paid the most.

Before salaries were published teams in negotiations would make it seem that the players were paid more in comparison to their peers than they actually were.

Cheers for the reply. Makes a lot of sense but I would have thought that the NHLPA would have wanted to keep it 'in house' so only those that need the info have access to it rather than just let it into the public domain.

 

[Hoser]

Taxes are a huge consideration.
Alberta has no taxes as well.

wat


Alberta has a flat income tax rate of 10%.

 

[leoleo3535]

wat


Alberta has a flat income tax rate of 10%.

yep my error was looking at provincial sales tax......effed up

 

[jol]

I wonder how their tax return looks like, i.e. US Federal? What kind of deductions, all the paid state taxes, what about escrows, pension planning etc?

JOL