Key takeaways from the GM Meetings:
Goal scoring is up, power plays are down.
Landeskog is attempting a comeback.
With Commissioner Gary Bettman confirming CBA negotiations with the NHLPA, it’s time to delve into the often-avoided subject: taxes.
Taxes are universally disliked – calculating, paying, and even thinking about them. Hockey is meant to be a refuge from such concerns, but that’s no longer the case.
It has taken time to recognize that states with no income tax, such as Florida, Nevada, Tennessee, Texas, and Washington, possess a competitive edge. Every location has its pros and cons, and life involves leveraging both.
Moreover, poor management cannot be masked by low taxes.
Perhaps it’s a Canadian perspective, or the declining Canadian dollar alongside Canada’s 31-year Stanley Cup drought, or the belief that the NHL and NHLPA should not take devoted fans for granted. Eventually, fans may lose faith if they doubt their teams’ chances of winning.
Maybe it’s the personal ambition to cover a Canadian team’s championship run. Any of the seven Canadian teams would do, as long as it happens before retirement. Despite looking young for 54, the end of my career is closer than the start.
Any viable solution must be part of the CBA talks. This might be a long shot unless enough teams and players prioritize it. Players in Canada or California should advocate for it, while those benefiting from low taxes may resist.
Regardless, ideas have been considered. The most appealing one suggests that teams in non-zero tax areas should receive minor relief when signing players to unrestricted free agency contracts.
Most players attain UFA status at 27 or after seven seasons. Some reach it sooner, like undrafted players or those unsigned post-draft, or those with limited NHL games early on. However, for this discussion, the ’27-and-seven’ criterion is the focus.
Auston Matthews serves as a prime example. The Maple Leafs drafted him, not his choice. Thus, no team relief applies initially.
Before his entry-level deal ended, Matthews signed a five-year extension with an $11.634 million cap hit. He wasn’t UFA-eligible until the final year. Toronto could match offers in the first four years, so no relief during that period.
However, in year five, relief would apply. Matthews then chooses to stay in Toronto. (Using Connor McDavid as another example, Edmonton wouldn’t get breaks for the first four years of his current eight-year contract, but would for the last four.)
When Matthews extends for four more years in 2023, each year qualifies for this ‘credit.’ Relief only comes when a 27-and-seven player commits UFA years in a tax-heavy market.
Several questions need addressing:
First, eligibility: California and Canadian teams are clear, but where’s the cutoff? Many teams have rates between zero and Quebec’s. To simplify matters for Bettman, each team’s discount could be based on their effective tax rate relative to no-tax teams. (The NHL/NHLPA could cap the discount if differences are too extreme. On a $10 million player, the Rangers’ rate is roughly 18 percentage points higher than no-tax teams; Montreal, Ottawa, and Toronto around 17. This might be seen as excessive.)
Second, how to manage extra salary outside the cap? Historically, in 2005 and 2013, teams could buy out players without cap implications. This stopped because teams hesitated to pay salaries outside the 50/50 revenue split.
It remains to be seen if this will happen. Possibly not. However, the primary audience is Canada, and fans are passionate about this. The golden goose shouldn’t be taken for granted.
32 THOUGHTS
1. GM meeting notes: Labour peace seems likely in 2025. The salary cap is set for three more seasons (barring unforeseen economic issues). No major philosophical disagreements hinder progress.
Players might request a share of expansion revenue, and the league might seek shorter contracts or changes to bonus structures. While both sides are assertive, neither is looking for conflict. Bettman hopes to announce a CBA update at his annual Stanley Cup address. Ambitious, but achievable if focusing on amending the current CBA rather than a complete rewrite.
Tristan Blackwood