How Taxes affect Teams Salary Cap

[Rick Blight]

1 minute ago, Sean Monahan said:

Fair point, but could that be because Florida ownership doesn’t want to get stuck with bigger money contracts and players are willing to make concessions to stay there? I see the clauses as working against the argument. It’s the player wanting more positives to their deal in order to sign in that city. 

But if the whole premise of this thread is that players prefer to play where they pay less taxes why would a player want to lock himself into a contract to stay in Winnipeg? Similarly, why wouldn't a player in the lower taxed cities not seek NTC/NMC's as much as possible to ensure they are not traded to a Winnipeg?

 

I guess I just don't see evidence of personal income tax rates being an issue for teams retaining or acquiring new players. 

[Sean Monahan]

Just now, ForsbergTheGreat said:

I have to act why is leveling the playing field even more than it already is a good thing.  What is the goal you think you want to accomplish. Vs what is the goal the NHL wants to accomplish.   Think of it from an nhl business perspective. The NHL’s main goal is to bring in as much revenue as possible, so how would this help them achieve that. 

 

For example. If florida is so appealing to ufa’s because of there tax advantage. how come there are in the bottom 2 for team revenue generated.

 

Also it’s easy to see that canadian teams will generate revenue regardless of tax advantages/disadvantages. So adjusting the cap would have zero overall affect on the NHL’s main goal . 

 

Adding a new cap structure the way the nhl is currently set, would in theory go against and hurt the NHL accomplishing there main goal. 

That makes sense. It’s jusr frustrating from a fan perspective. I wonder how much it really factors in to a UFA’s decision. 

[Sean Monahan]

2 minutes ago, Rick Blight said:

But if the whole premise of this thread is that players prefer to play where they pay less taxes why would a player want to lock himself into a contract to stay in Winnipeg? Similarly, why wouldn't a player in the lower taxed cities not seek NTC/NMC's as much as possible to ensure they are not traded to a Winnipeg?

 

I guess I just don't see evidence of personal income tax rates being an issue for teams retaining or acquiring new players. 

Wouldn’t a player signing that contract with the NMC at least want to know that they’ll have stability? Rather than being uprooted and sent to another place, potentially with high tax rates as well, and having to settle in once again. To me it’s just a way of getting a little more peace of mind. 

[Rick Blight]

1 minute ago, Sean Monahan said:

Wouldn’t a player signing that contract with the NMC at least want to know that they’ll have stability? Rather than being uprooted and sent to another place, potentially with high tax rates as well, and having to settle in once again. To me it’s just a way of getting a little more peace of mind. 

That is exactly why they sign those contracts. But again, if players are so committed to playing where income tax rates are lower why does a player on Winnipeg, with high tax rates, lock himself in so that he can't go elsewhere when he hits UFA status or be traded without consent?

PK Subban was visibly upset when he was traded from Montreal (highest tax rate) to Nashville (lowest tax rate) so I really question how much players worry about tax rates. It may be considered as a UFA but I really doubt it is a huge factor in their decision making.

[Sean Monahan]

8 minutes ago, Rick Blight said:

It may be considered as a UFA but I really doubt it is a huge factor in their decision making.

That’s what I wonder and I’d like to see a player poll on it. It’s frustrating as a fan but I bet it’s something we care about more than players do. Regardless of where they sign they’re still pretty dam rich. 

[ForsbergTheGreat]

40 minutes ago, Sean Monahan said:

That makes sense. It’s jusr frustrating from a fan perspective. I wonder how much it really factors in to a UFA’s decision. 

Personally I think it gets way overblown. Realistically how much do we thinks this is affecting parity? Really it’s only the superstars signing for big, long term deals that it really has an effect on and typically they have bigger reasons for signing in a specific city.

 

Things like;

-contending vs not 

-good place to raise there family 

-Childhood fav (Tavares)

-lifestyle (Martin st.louis/ panarin)

-hockey markets vs non

-geographic location (east vs west coast)

-and then on top of that which teams have available cap space. 

 

Really how how many cups has this had an affect on?  The majority of cup winners are all teams that would be considered “disadvantaged”

 

Has this ever negatively affected Vancouver? Not that I can think of. We’ve landed plenty of attractive UFA’s (sundin, hamhuis, eriksson lol) and we’ve  never failed to resign a player for those reasons.

 

So in my opinion this is a far smaller issue than people make it out to be. 

[Boeserker]

On 4/19/2019 at 9:24 AM, Slegr said:

How difficult would it be for the NHL to address this inequity by combining the state / province tax factor into a formula that makes each team's salary cap unique to create an even playing field? That's the whole point of a salary cap, isn't it? For an even playing field? Yet this table indicates that teams like Dallas and Tampa can pay 125%+ over teams like Ottawa and Montreal for quality players. Five of the eight bottom teams hindered by tax are Canadian teams. Perhaps not a surprise that no Canadian team has won the cup in the salary cap era..

 

I think it would completely change the structure of the NHL. I know that U-haul registers all their vehicles out of Arizona because of the low tax rate. There would have to be one umbrella company set up in the lowest taxed state, then the owners would become franchisees? Or partners? Would lead to league wide corruption and fixing/game management, basically destroy the competitive nature and turn the league into a full on entertainment package instead of a true sport.

 

Teams in other sports all have to deal with local tax/funding/crowd base size etc. It's what makes teams unique, gives them their own set of challenges to deal with.

 

 

[IBatch]

On 4/19/2019 at 1:39 PM, Rick Blight said:

I have no idea where they come up with these numbers but it is pretty hard to take this chart seriously when they show Pittsburgh having a $13M advantage over Philadelphia when players on both teams pay the exact same taxes for the exact same salary. Why would there be a discrepancy between Toronto/Ottawa or Calgary/Edmonton or Rangers/Islanders, etc?

This chart is flawed in more ways than one,  but this is an issue that I’ve brought up a dozen or so times that needs to be addressed sooner than later,  I’m hoping at the next CBA.   How it really works is very different than this chart, only both Florida teams and Vegas have no state tax and Dallas falls as the next up (Dallas is not the least taxed team).  And it’s only for home games, they pay tax in each building they play in which makes it more convulated.   Overall TB, Vegas and FLD have about 8 million more in cap space or about 10% than the majority of the rest of the league (but not Dallas they are close behind).   Thats a big advantage, and considering the cap is supposed to level the playing it really isn’t.  

[Mackcanuck]

Number of Series Won Among Canadian NHL Teams Since 2004-05 Lockout

(aka The Salary Cap Era)

#GoSensGo 7

#Canucks 6

#GoHabsGo 6

#LetsGoOilers 4

#GoJetsGo  2 

 #Flames 1 

 #LeafsForever 0