Friday, September 17, 2010

The Call of the North?

"NHLers love the idea of playing in Toronto".

We've all heard some variant of this said at some point, and many of us have probably uttered it ourselves. Intuitevely, this statement makes sense. The Leafs are the wealthiest, most storied franchise in the league (that's right, f%$* you Montreal) with a fanbase that exibits a level of devotion usually reserved for religious extremists. Toronto has all the amenities a guy pulling down a six- or seven-figure salary could want - luxury condos in the city and cottages in Muskoka, world-class dining, high-end fashion and jewelry for the wife/girlfriend in Yorkville and even a Ferrari dealership on Avenue Rd. It's hard to imagine any player deciding they'd rather play in an armpit like Detriot or New Jersey or in a market like Nashville or Atlanta where most residents can't even spell 'hockey', let alone care enough to go see a game.

Although Lord knows that I would salivate at the prospect of suiting up for the Blue and White, is it reasonable to expect the players in league really feel the same way? Let's consider some of the cons:

1) Big-market teams aren't for everyone. For those of us who have achieved neither fame nor fortune it is difficult to imagine anyone willingly turning down either. But hockey players are an aberration in the world of zero-loyalty,look-at-me pro athletes. Hockey players are a remarkably down-to-earth bunch, and many of them would prefer not to be in the spotlight. I recall an interview with Joe Thornton when he was traded from the Bruins to the Sharks in which he said that he was looking forward to being able to walk down the beach without being stopped by every other guy wanting to talk about last night's game. Now not every NHLer is going to be as shy as Jumbo Joe, but even among the Roenicks and Ovechkins of the league there is a further consideration:

2) Toronto isn't the biggest 'brand name' city in the league. Certainly, Toronto may be the biggest stage in the hockey world and Leaf players are assured to be well-known within the city and frequently mentioned in the media (for better or for worse). However, NHL players are mostly 20-somethings, and many of them are likely to be influenced by the cachet that a city conjures up. For these guys, taking their talents to South Beach, Broadway or Hollywood is going to be more attractive than Bay Street.

3) The weather here kind of sucks. I say 'kind of' because we can always claim that at least the mercury doesn't drop to minus thirty-two here in the T-dot-O. But Toronto still can't compete with the likes of Miami, Tampa, LA, San Jose, Vancouver and co. Canadians, Russians and Scandanavians aren't too likely to complain, but a lot of players (and their wives) would probably prefer a more sun-intensive destination if given the choice.

4) If money's your thing, Toronto isn't. Income tax rates are higher in Canada and higher still in Ontario -  the only American States that pay close to Canadian levels of income taxes are California and New York and, as noted above, they can make up for it in glitz, glamour and (in California's case) better weather. It gets even better if you play in Texas or Florida, where the absence of a State income tax means players can expect to keep about 20% more of their income than if they played in the Great White North. That might not matter much to a top-flight NHL star making $5-10 mil a season - they could probably make up the difference with endorsement deals - but it probably matters to the majority of rank-and-file players who don't command such large salaries. And forget about Americans lining up to play here - not only do they have to pay Canadian sales and property taxes while they're living here, they still have to pay American income taxes even while they're living here.

5) Sensitive? This isn't the place for you. This is similar to point #1, but it bears noting - the media can be highly critical of players here in Toronto - often unfairly so. Some people are more sensitive to criticism than others, and pro athletes are no different. So if getting smeared in the morning paper is going to ruin your day, then you'd almost certainly rather play somewhere like Dallas or Phoenix where the media is likely to be too concerned with their NFL QB's most recent mistake to pay your neutral zone turnover last night any notice.  

You often hear hopeful Leaf fans talk about how they can reasonably expect this free agent or that to sign with Toronto at a discount, but the fact is this - playing here already represents a discount for a lot players due to the higher taxes alone. When you consider the other factors, it becomes clear that Toronto is only a big draw for superstars or players who are willing to put playing for a big-name team above higher pay or better weather. To be clear - Toronto is still likely to be the most attactive NHL posting in Canada, with the possible exception of Vancouver. However, with 80% of the teams in the NHL located south of the border, that doesn't mean as much as it used to.


SBurtch said...

Just something to point out, and I'm not sure how it works in the NHL, but you pay income tax on the work you do in different locations.

Thus I assume NHL players who are playing games in Canada, NY, California, etc. are paying the local income tax rates for the periods of time they work in those locations.

If I was the government of Ontario, and I had 72 players working on a given Saturday night in Toronto and Ottawa, I'd be pretty damn sure I was collecting my share of their income for the night in question... whether they played for the Dallas Stars or the Florida Panthers.

Brendan T said...


American and Canadian income taxes work differently. The US is one of the few countries that taxes its citizens' income regardless of where they live and work, whereas the Canadian government only taxes income earned while working in Canada (so long as you don't try to bring money earned abroad back with you). The net result is that it is a financial gain for Canadian players to play in the States because they'll end up paying lower, American income tax, but Americans have no financial incentive to come play here.

Don't worry, Dalton definitely gets his cut on NHL games played in Ontario - taxes on tickets, alcohol and concession sales, property taxes on the home team's arena and, of course, income taxes on the home team's players and staff to name just a handful.

Leaf.Fan.Gordo said...

I think its even more specific than that. Some states dont tax athletes specifically.

And the Miami Heat were able to do what they did with those mercenaries because Miami doesn't have income taxes or something like that.

All I know for sure is its complicated and your point (that taxes are higher here than almost anywhere else) is going to be true no matter what the case is.