What measures are there to keep teams from paying players under the table?

Discussion in 'Fugu's Business of Hockey Forum' started by Impossibles, Aug 8, 2005.

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  1. Impossibles

    Impossibles Registered User

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    Who's to say the Flyers ownership isn't donating $1,000,000 a year to a Peter Forsberg charity on the side?

    Has the NHL made any mention of what they are going to do to keep track of this?

    If college sports has this going on, I'm sure there will be teams who will try this.
     
  2. Dave is a killer

    Dave is a killer Dave's a Mess

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    charities are for charity! ... not individual bank accounts :shakehead
     
  3. broadwayblue

    broadwayblue Registered User

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    well there are penalties in place for teams who are caught trying to evade the cap rules. first time it's $1 million fine plus actual value of the infraction, second time it's a $5 million fine. there must be more to it than that...as that would really just make it a soft cap with an "evasion" fee.
     
  4. GSC2k2*

    GSC2k2* Guest

    I imagine the contract in question is voided as well.

    It won't happen.
     
  5. Impossibles

    Impossibles Registered User

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    That's what I was wondering. I hadn't heard of any penalties.

    And don't say it won't happen. Minnesota got caught in the NBA for doing this, and were penalized 5 first round draft picks.

    A friend of mine got some cash under the table to go to a certain Canadian University to play football. If it happens in CIS sports, I'm sure it could happen in pro sports.
     
  6. txomisc

    txomisc Registered User

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    not to mention that its illegal and would cause the player to be guilty of tax fraud
     
  7. ClosetOilersFan

    ClosetOilersFan Registered User

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    Impossibles - Any conduct such as this would actually be illegal and highly risky. The possibility of being caught when in the spotlight of the media is far too high for MOST people to try such things. However, that's not to say no one wont try, but I doubt many GM's/Owners would take these risks to sign a player.

    In regards to CIS Sports, I'll break it down for you like this:

    Small Business: Shady, incoherent accounting practices [generally]

    Big Business: Generally strict and disciplined accounting [Yes, there are companies like Enron, but they are the minority]

    Why? Governments watch the big boys.

    Same goes for sports, and on top of that, you have the media who is watching.

    -J
     
  8. Resolute

    Resolute Registered User

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    And college teams get busted for it.

    Charities have to be registered, and have to release the names of donors. Should the Flyers, or anyone associated with them appear as a major donor to Forsberg's charity, it would obviously be revealed.

    According to Ken King, management personel had to sign contracts stating they wouldnt attempt to violate the terms of the salary cap. Otherwise they faced stiff penalties that escelated rapidly.
     
  9. SJeasy

    SJeasy Registered User

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    I believe that I saw draft picks in addition to fines for violations. We will know for sure when the 600 comes out.
     
  10. mackaveli

    mackaveli Registered User

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    would it be possible for a team owner to buy a player a house or something? lets say an UFA doesn't want to sign with another team cause he doesnt want to build a home or spend money on another home. Can a team say, dont worry we'll cover that and buy you a new house with a new car. Or any other incentives like instead of keeping the house you can sell it and keep the money?

    can that happen?
     
  11. GSC2k2*

    GSC2k2* Guest

    Nope. You know who would stop it?

    The NHLPA would. In a heartbeat.

    I continue to be amused by people thinking that a group of 30 owners who burned hundreds of million in revenue going forward would want to circumvent the success that they achieved.
     
  12. SJeasy

    SJeasy Registered User

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    Additionally, it would lower the cap for everyone, because it would lower revenue and therefore the following years cap.
     
  13. ClosetOilersFan

    ClosetOilersFan Registered User

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    mackaveli - Legally, anything such as a house, a car, etc. count towards taxable income. In otherwords, 4.5 million + a $400,000 house + $100,000 sports car would count as $5 million in income; in other words, it would count as $5 million towards their cap.
     
  14. hockeyfan33

    hockeyfan33 Registered User

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    Sure, you get an appraiser to appraise the house at below costs, and you buy a brand new Mercedes, drive it for 30 miles then sell it to the player at 20k below cost. (you know the "driving it off the lot deceases value" ... :sarcasm: )


    There will eventually be some ways around the cap but VERY minor ones, eventually the smart GM's will figure it out. In the long run it won't be anything significant enough to cause the disparity of the previos cba.
     
  15. HockeyCritter

    HockeyCritter Registered User

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    I would think that this an any other loophole you can think of has been covered somewhere in that 600 page document.
     
  16. nyrmessier011

    nyrmessier011 Registered User

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    The owners spent 301 days finding loopholes. If Glen Sather wanted to take Jagr out to lunch for a cheeseburger I'm sure it would count $7.99 towards the cap.
     
  17. Timmy

    Timmy Registered User

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    The appraiser would lose his or her license for breaching their code of conduct.

    Keep trying, though, everybody. There simply must be a way around this silly little cap that hasn't been thought of yet. ;)
     
  18. Resolute

    Resolute Registered User

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    I can easily believe that there are at least six owners who would love to find ways around this cap.

    Personally, I find it quite foolish to assume that there isnt at least one owner who would willingly violate the cap if the opportunity presented itself. Same reason why atheletes - including hockey players - take illegal drugs. It's all about winning.

    That said, the amusing part, to me anyway, is how obvious the "loopholes" people are coming up with. Chances are, almost anything that we as a group come up with has been covered. Chances are that envelopes full of money changing hands under the table isnt what is going on.
     
  19. dwkdnvr

    dwkdnvr Registered User

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    I think the opportunity for this type of shady deal is not so much directly with the owners/teams themselves, but with local sponsors/boosters (much like NCAA football, where the alumni are frequently the ones sliding the players money).

    Terry Frei actually mentioned this in one of his articles - what's to stop Pepsi from coming to Peter Forsberg during contract negotiations and saying something like "We'll give you $1mil in endorsements if you sign with the Avs, because then more people will come to the Pepsi center. If you sign with anyone else, get lost". After that Kronke quietly reworks the contracts with Pepsi in all his multiple holdings.

    The obvious/straightforward abuses will get caught through basic accounting/auditing. For complex ownership scenarios, though, it certainly seems possible that folks could slide some money around, although it would be difficult enough that there would have to be some pretty significant upside.
     
  20. GSC2k2*

    GSC2k2* Guest

    Well stated, Res. I can always hear the lightbulbs popping on and the synapses going off.

    Eureka!!!!! lol
     
  21. GSC2k2*

    GSC2k2* Guest

    .

    Easily caught by an audit. Plus, the CEO and CFO of Pepsi go to jail for breaching Sarbanes-Oxley.
     
  22. DINO22CICCARELLI

    DINO22CICCARELLI Registered User

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    The NHL cannot do anything if you create an enity ( not related to te team ) and have that company pay him. :teach:
     
  23. GSC2k2*

    GSC2k2* Guest

    Yes, they can.

    The CBA covers payments from all related companies. The amazingly creative arrangement you suggest is undoubtedly covered by the definitions of "affiliated entities" that will be in the CBA.

    :teach: my a** :shakehead . Learn a little accounting before you :teach: , please.

    What's next? Plain envelopes left on park benches full of unmarked bills?
     
  24. HockeyCritter

    HockeyCritter Registered User

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    Hey, that could work. :D
     
  25. Montrealer

    Montrealer What, me worry?

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    You're right!!!!!

    Oh NOES THey ARE BRAKEING THE RULEZ LETS TELL BETTMANN

    You are the first guy ever to bring this up, really.
     
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