What if we bought out OEL? (Updated June 16 2023)

[Ghostsof1915]

On 12/8/2022 at 10:24 AM, HKSR said:

June 16, 2023:  UPDATED TO INCLUDE OEL BUYOUT with MULTI YEAR FORECAST.

 

SEE UPDATED SPREADSHEET HERE:

 

 

A crazy idea, but what do things look like if we bought out OEL?

 

The cap hits are as follows:

2023-24:  $146,667

2024-25:  $2,346,667

2025-26:  $4,766,667

2026-27:  $4,766,667

2027-28:  $2,126,667

2028-29:  $2,126,667

2029-30:  $2,126,667

2030-31:  $2,126,667

 

I'm gonna assume the following:

- Trade Myers with $2M retained for nothing but a pick or prospect

- Trade Pearson with $1.2M retained for a pick or prospect

- Horvat re-signed at $8M AAV

- Kuzmenko re-signed at $7M AAV

- Various raises for the other pending FAs (Hoglander, Bear, etc)

 

 

Buys us some time to move Boeser later = more leverage in a deal. 

Would be a lot easier to find a solid shut down top 4 LHD.

 

Thoughts?

It's all your fault.

[DefCon1]

5 hours ago, NewbieCanuckFan said:

The LARGE cap dumps that Arizona took at LONG OFF their books.  Meanwhile they got a 1st round pick for their troubles.  

You also know that this hurts Arizona big time since they just lost 1 of the 3 retained salary slots for the next 8 years. They only have 2 left.

[NewbieCanuckFan]

3 minutes ago, DefCon1 said:

You also know that this hurts Arizona big time since they just lost 1 of the 3 retained salary slots for the next 8 years. They only have 2 left.

Hello Arizona?  This is Vancouver, we've got this Myers contract that was front end loaded.

 

Every GM makes mistakes (even good ones).  I'm sure there's going to be an opportunity for them to acquire another high cap hit but low salary contract.

Edited June 17, 2023 by NewbieCanuckFan

[Timråfan]

11 hours ago, Xanlet said:

This team won't be competitive now until the mid 2030s, great job management.

We are competative now. Especially with the addition on D they planned for.

Or we don’t need that with Hirose coming in.

We can play exactly as good as we played the second part of the season.

Actually better since Hronek and Mikh is back.

But probably it will come in some 3/4 D that takes over.

Well, it seems PA wants to compete for the cup straight away.

[DownUndaCanuck]

Thing is, a lot of average teams have dead cap. Minnesota lead the way and are still somehow competitive with bargain stars. However, look at the final top-4 of the last year's playoffs:

 

Vegas - no dead cap

Carolina - no dead cap

Dallas - no dead cap

Florida - like 1.2M dead cap for Yandle for a couple of years

 

Contending teams play to their fullest potential. Buying out OEL means we probably aren't going to fully contend any time soon, but we can be an average playoff team and get away with it. 

 

That being said PA didn't have much of a choice, one of OEL or Myers had to go - I thought Myers would be the easier one to move but evidently not, so the buyout is the only way. In a year's time we'll have rid us of both the elephants which is fair play to PA, he can finally start from scratch.

[Xanlet]

5 hours ago, DownUndaCanuck said:

Thing is, a lot of average teams have dead cap. Minnesota lead the way and are still somehow competitive with bargain stars. However, look at the final top-4 of the last year's playoffs:

 

Vegas - no dead cap

Carolina - no dead cap

Dallas - no dead cap

Florida - like 1.2M dead cap for Yandle for a couple of years

 

Contending teams play to their fullest potential. Buying out OEL means we probably aren't going to fully contend any time soon, but we can be an average playoff team and get away with it. 

 

That being said PA didn't have much of a choice, one of OEL or Myers had to go - I thought Myers would be the easier one to move but evidently not, so the buyout is the only way. In a year's time we'll have rid us of both the elephants which is fair play to PA, he can finally start from scratch.

Dallas and Florida have zero state income tax, which in reality translates to something like $10m extra cap space. If a team like Vancouver, which already has high local taxes, ALSO has dead cap, the team has a MASSIVE salary cap handicap. It's just extremely unlikely any success will come with that big of a disadvantage.

[Alflives]

9 minutes ago, Xanlet said:

Dallas and Florida have zero state income tax, which in reality translates to something like $10m extra cap space. If a team like Vancouver, which already has high local taxes, ALSO has dead cap, the team has a MASSIVE salary cap handicap. It's just extremely unlikely any success will come with that big of a disadvantage.

NHL Players take taxes very seriously with contracts_VP8.webm

Plays choose US cities because they can live in complete anonymity. The tax laws up here are good for them because they play all over the US too. Plus living up here and being paid in US funds adds almost 30% to their cheque after conversion. 

[Xanlet]

3 minutes ago, Alflives said:

Plays choose US cities because they can live in complete anonymity. The tax laws up here are good for them because they play all over the US too. Plus living up here and being paid in US funds adds almost 30% to their cheque after conversion. 

Did you listen to the clip? He gives a direct example of Radulov $31.25m over 5 years and he will save $4.4m on that contract in Dallas that he would have had to pay in taxes if that same contract were signed in Montreal. That's MASSIVE money. That's a salary cap handicap.

[NewbieCanuckFan]

2 hours ago, Xanlet said:

Did you listen to the clip? He gives a direct example of Radulov $31.25m over 5 years and he will save $4.4m on that contract in Dallas that he would have had to pay in taxes if that same contract were signed in Montreal. That's MASSIVE money. That's a salary cap handicap.

He won't be able to dress up as a member of KISS in that state though.

Edited June 17, 2023 by NewbieCanuckFan

[Fred65]

Here's some thing I've always wondered about. Do players earn their money in their home location or should the pay taxes on the basis of where they actually play. ie if Vcr players play a game in Dallas ie earn thier income for that game in dallas why would they pay taxes as though they were in Vancouver ?

[alt kilgore]

On 6/17/2023 at 12:16 PM, Fred65 said:

Here's some thing I've always wondered about. Do players earn their money in their home location or should the pay taxes on the basis of where they actually play. ie if Vcr players play a game in Dallas ie earn thier income for that game in dallas why would they pay taxes as though they were in Vancouver ?

Yeah logically, it seems like if a person is earning their money in another country, which Canuck players are for a good size minority of their games in the season, they should only be  paying tax on that earned money based on the tax laws that exist in that State.  Even more logical for American born players.

 

But alas, the Canadian government is not so generous.  It has a lot to do with the employer, where they are located. Even if you are American, if you signed that contract in Canada for a team based in Canada, owned by a Canadian, even if its in US dollars, you pay Canadian tax.  And if you are a Canadian, there are still laws that say you pay Canadian taxes no matter where it comes from.

 

The only thing you can do is avoid double taxation by applying for that each year. As both countries have this set up.  But all that means is you are garanteed that you  don't pay any more than you would in Canada. So  it does no good for say Miller to apply for this, for games in no tax States, or even lower tax States, as he'd get zero subtraction from his Canadian bill.

 

https://turbotax.intuit.ca/tips/the-usa-canada-tax-treaty-explained-14788

 

 

Edited June 18, 2023 by kilgore

[alt kilgore]

On 6/16/2023 at 8:46 PM, brbetts542 said:

But does Petterson resign in this kind of environment ?

Well, I wouldn't blame him for resigning based on the sh!#show in Vancouver since he got here.

 

But if you are talking about re-signing, it won't be based on a buyout for OEL. There is also a strong team bond and fellow countryman bond.  I highly doubt he'd go to management and demand OEL be bought out before he'd  ever consider a long term deal here. If that was what you were inferring.  And as wai_lai416 pointed out, if he and his agent were smart, they'd maybe be more concerned, as I am, about kicking the can down the road to deal with the added cap problems later, just when Petey and co. will be in a better position to go further, with another piece added......if they had only been even one year more patient  before any buyout.

[Fred65]

16 minutes ago, kilgore said:

Yeah logically, it seems like if a person is earning their money in another country, which Canuck players are for a good size minority of their games in the season, they should only be  paying tax on that earned money based on the tax laws that exist in that State.  Even more logical for American born players.

 

But alas, the Canadian government is not so generous.  It has a lot to do with the employer, where they are located. Even if you are American, if you signed that contract in Canada for a team based in Canada, owned by a Canadian, even if its in US dollars, you pay Canadian tax.  And if you are a Canadian, there are still laws that say you pay Canadian taxes no matter where it comes from.

 

The only thing you can do is avoid double taxation by applying for that each year. As both countries have this set up.  But all that means is you are garanteed that you  don't pay any more than you would in Canada. So  it does no good for say Miller to apply for this, for games in no tax States, or even lower tax States, as he'd get zero subtraction from his Canadian bill.

 

https://turbotax.intuit.ca/tips/the-usa-canada-tax-treaty-explained-14788

 

 

Yeah we ran into this problem in Business. If we shipped for example 50,000 tons of coal from India to Cape Town and made a profit why do we need to pay tax on the profit. It was never earned in Canada. It was challenged but there's no arguing with the tax man, logic and common sense simply were dismissed.  

[Jaimito]

42 minutes ago, kilgore said:

Yeah logically, it seems like if a person is earning their money in another country, which Canuck players are for a good size minority of their games in the season, they should only be  paying tax on that earned money based on the tax laws that exist in that State.  Even more logical for American born players.

 

But alas, the Canadian government is not so generous.  It has a lot to do with the employer, where they are located. Even if you are American, if you signed that contract in Canada for a team based in Canada, owned by a Canadian, even if its in US dollars, you pay Canadian tax.  And if you are a Canadian, there are still laws that say you pay Canadian taxes no matter where it comes from.

 

The only thing you can do is avoid double taxation by applying for that each year. As both countries have this set up.  But all that means is you are garanteed that you  don't pay any more than you would in Canada. So  it does no good for say Miller to apply for this, for games in no tax States, or even lower tax States, as he'd get zero subtraction from his Canadian bill.

 

https://turbotax.intuit.ca/tips/the-usa-canada-tax-treaty-explained-14788

 

 

They all pay federal taxes regardless of where they work. Tax treaty with Canada makes it more complicated, but you don't pay twice the income tax.  

 

And as a US citizen, you pay taxes regardless where you live or work in the world. The only way to avoid it is to relinquish US citizenship.  Not so with Canada. You just need to declare as a non resident for tax to stop paying CRA. You can keep your citizenship. 

[Fred65]

2 hours ago, Jaimito said:

They all pay federal taxes regardless of where they work. Tax treaty with Canada makes it more complicated, but you don't pay twice the income tax.  

 

And as a US citizen, you pay taxes regardless where you live or work in the world. The only way to avoid it is to relinquish US citizenship.  Not so with Canada. You just need to declare as a non resident for tax to stop paying CRA. You can keep your citizenship. 

Yeah I knew that my brother lived in the good old USofA. My kids can apply for US citizenship and there are accountants who up here handle US tax returns but it's just an additional expense

[IBatch]

One disadvantage to owning a home in the US - say a snow bird thing, you then have to file a tax return with the US.   Doesn't mean you have to pay the man,  but it is annoying.   Unless that's changed recently anyways.   We've looked at it, when you could buy something that would cost 2-3 million in the lower mainland for 100k during the 2009 financial crisis.    Turns you off a little.   

 

At the end of the day these guys all get paid in US funds.   But where they play and live is where they pay taxes.   One little interesting tidbit, is players in WSH, have three options for where they live in that city.   Two are 4-5% lower than one of them.   Canucks ... doesn't take long to get to 53% plus tax bracket.    League min pay half ... by the time you're making 1.5ish you're getting the full meal tax bracket.    Most US teams pay way less taxes than any Canadian team.   Alberta teams actually aren't as bad (low provincial taxes), better than CALI and NY teams.    The Canucks used to be the same as Alberta teams during the peak Sedin era and WCE era.   

 

JR said he was wrong about what he thought it would take to move money out and sign guys in this market.   Used to PIT and 41% bracket.    JB .. always seemed to have to add a year in his deal or an extra couple hundred K.     Miller lost 550k per year after his trade to Vancouver.   He for sure did the team a solid with his next deal...that's like 6.5 in TB.  
 

The other thing is a certain amount of taxes is owed when playing in certain US cities, only for players in US states.   That gets complicated.  Fortunately there is a calculator by gavingroup, those things are all built in.   Have a look anyone.   It's pretty shocking.   Bobrovsky, Barkov and anyone else making 10 million in no state tax teams - take home a little more than McDavid does at 12.5.   COL also has low taxes.   McKinnon is making a lot more than McDavid too. 

Edited June 19, 2023 by IBatch

[IBatch]

As an aside to the tax inequities, there is a simple solution.   Either do all contracts in net pay, or create a new monetary system the uses math wizards.   And pay them in "NHL dollars".     As it is right now, it puts some teams at a big disadvantage to others.   Especially when signed UFAs, but also when signing RFAs to a degree.    

 

Some teams like TO and NYR have other advantages.   NYR has high taxes, but for as long as i've been watching the sport, UFAs consider it a desirable landing spot or players later on in their careers.   TO of course draws from 50% or more of all Canadians.   A lot want to go there later on too.    MTL of course has all the French Canadians.  

 

 Can see why Vancouver is making a special focus on Swedish players.   It's on small competitive advantage we have to work with, might as well focus on it.   Vancouver is also a great city to live in, especially if you have a lot of money to enjoy it.   Up there with MTL, NY, LA.    

 

The current generation of NHLers, are flocking to the US.     Canadian players no longer want to stay in Canada as much.  

 

I'd sure like to see a bigger focus on drafting WHL players ... especially ones born in BC, because of course they will be Canuck fans.   Pat Quin brought home a lot of guys.   Adams, Courtnall, Ronning etc.  

 

Would also be nice if taxes were reversed in BC, back to the Alberta level of things.    
 

Doubt MTL would have made it to the final in a normal system.   Boston and TB.    

 

If you look at all the teams who made it to the final four, or the final since 2011.   It's noticeably becoming more and more frequent that no or low state tax teams make it.   LA had a different generation of guys on that team.    SJ too.   

 

Vegas, Dallas, Florida CAR.   3 no state tax teams, and one of the lowest after that.     COL also low tax team.   TB "118 million over the cap" t-shirts by Kucherov lol.    NMC become like golden tickets for those states.   Won't be shocked to see Seattle manage something quickly as well.   One of the six teams that have a 16-17% tax advantage over VAN, MTL, TO and OTT. 

[IBatch]

17 hours ago, Fred65 said:

Yeah we ran into this problem in Business. If we shipped for example 50,000 tons of coal from India to Cape Town and made a profit why do we need to pay tax on the profit. It was never earned in Canada. It was challenged but there's no arguing with the tax man, logic and common sense simply were dismissed.  

You pay the tax man from the corporation's address.   So if your business is in Canada, and this deal made you money, you will pay taxes on it.   If the corporation that did this transaction was in a different country, then that company pays taxes for it.   

 

One of the way to create a better economy, is have low corporate tax rates and try and draw new headquarters into the area.    Scotland did this at one point.    Same even at the municipal level.    If your property taxes are low for commercial entities, it draws in business.    If it's high then it makes a difference in the opposite way.    Small towns can get a boost or even a boom from that.  

Edited June 19, 2023 by IBatch

[RomanP]

On 6/19/2023 at 7:47 AM, IBatch said:

One disadvantage to owning a home in the US - say a snow bird thing, you then have to file a tax return with the US.   Doesn't mean you have to pay the man,  but it is annoying.   Unless that's changed recently anyways.   We've looked at it, when you could buy something that would cost 2-3 million in the lower mainland for 100k during the 2009 financial crisis.    Turns you off a little.   

 

At the end of the day these guys all get paid in US funds.   But where they play and live is where they pay taxes.   One little interesting tidbit, is players in WSH, have three options for where they live in that city.   Two are 4-5% lower than one of them.   Canucks ... doesn't take long to get to 53% plus tax bracket.    League min pay half ... by the time you're making 1.5ish you're getting the full meal tax bracket.    Most US teams pay way less taxes than any Canadian team.   Alberta teams actually aren't as bad (low provincial taxes), better than CALI and NY teams.    The Canucks used to be the same as Alberta teams during the peak Sedin era and WCE era.   

 

JR said he was wrong about what he thought it would take to move money out and sign guys in this market.   Used to PIT and 41% bracket.    JB .. always seemed to have to add a year in his deal or an extra couple hundred K.     Miller lost 550k per year after his trade to Vancouver.   He for sure did the team a solid with his next deal...that's like 6.5 in TB.  
 

The other thing is a certain amount of taxes is owed when playing in certain US cities, only for players in US states.   That gets complicated.  Fortunately there is a calculator by gavingroup, those things are all built in.   Have a look anyone.   It's pretty shocking.   Bobrovsky, Barkov and anyone else making 10 million in no state tax teams - take home a little more than McDavid does at 12.5.   COL also has low taxes.   McKinnon is making a lot more than McDavid too. 

Simply looking at the numbers in the screenshot tell me this calculator is bs. Income tax is progressive tax. You don’t pay the top tax rate on your entire income. Here goes the credibility…

[IBatch]

2 hours ago, RomanP said:

Simply looking at the numbers in the screenshot tell me this calculator is bs. Income tax is progressive tax. You don’t pay the top tax rate on your entire income. Here goes the credibility…

Lol.   Go look at it.   Spend some time changing the amount.   Read the small print too.   Try the 750 minimum.   The sliding scale bites around 1.5.   Why are you taking one look at a photo, and deciding there isn't any credibility based on that?   Your going to see what your saying, is factored in pretty quickly.   It won't take long to get there in other words.    What is total BS, and have been beating this bush for years now, in a "cap era", it should be at least within a 5% range take home pay.   Not a difference of 16-17%.    Have fun with the calculator.   How long does it take to get to the "max tax".     BC at least isn't as bad as Ontario and Quebec in that respect, but for sure it has something to do with housing prices and a "living wage".     I know all about BC max tax bracket.  Well what it used to be in the 90's and 2000's anyways. 

Edited June 21, 2023 by IBatch