Banned
Joined: Jun. 2018
Posts: 19,215
Likes: 4,837
Let me say this about what MTL did here and why it will hurt the NHL in total.
The contract was all in signing bonus. Only 750, league min in salary.
The way that works out is, the signing bonus is paid in the place of player residence. It is not payed in the state of the signing.
So if Aho is a resident of say, FL, he pays 0 state tax on it. He would also pay American, not Canadian tax on it. Again a large savings.
I image that this will be the way players ask for contracts from now on.
Why this is bad for the NHL, is that it puts small market teams as larger disadvantages. We already know there was an imbalance between tax free states and the rest of the league.
But this makes the gap even larger for smaller market teams that don't have the revenue of larger market teams and can't pay everything up front.
It's creating a snow ball effect of imbalance to the league. Making it harder to keep competition level even.
This wasn't just 8.5 million. It was 8.5 million at a lower tax rate. Much like what FL can offer which is probably where the bonus was going to be paid. Giving it a bump into the same amount of take home pay as would have been 9+ in carolina on salary. The small market teams can't pay all the bonus while the larger market teams can. The only teams that can get around it, are the handful of teams in tax free areas.
Teams working on budgets have to use their generated revenue through the year to pay the bills. They can't simply splash down all the cash at once.
Things like this will lead to greater imbalances in the league.