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Last year Bertuzzi was traded after an extension wasn’t what he’d hoped for. Free agency this summer may bring about something that could lead to shifts in agent representation. I’m calling it “the boomerang free agent”.
At the end of the year, a good agent takes a player’s states in relation to time on ice and finds every favorable comparison. The GM essentially looks at the other side of the coin and the two sides try to find common ground or go their separate ways. We saw a couple of trade deadline deals (Markstrom to New Jersey and some unspecified package out of Detroit) fall through. At the end, teams who’d wanted 1st round picks settled for 3rd.
An increase in teams lowering the roster count had one or two agents on alert last year, and the same trend could be a theme in the summer. The top candidates will find their deals and the others will weight the options. A projected 4.25m bump in the cap (which still isn’t fully confirmed and has to be approved) does little to stem the tide of perceived value versus actual space or internal budgets.
The boomerang is this. After a month in free agency a player agent could well call back and ask if the original deal is still on the table. It may not be. We’ve seen teams go and grab plan B and use the space. All of a sudden the deal that wasn’t good enough is now even less and a player wants to grab a spot. If 22 fewer players had jobs in the NHL last year, that’s a team’s worth. We remember the New Jersey debacle of icing reduced rosters due to budgeting issues several years back. That isn’t a trend anyone wants to see grow.
So, here is the question. If you were an agent right now, how would you prepare for the preseason. So long as it didn’t violate tampering laws, I’d speak to agents with similar clientele and see what type of offers are being made. Find the trend and potentially look at less term. New advertising partners and streaming deals could enter the fray over the next few years and either a raise schedule or negotiations under more favorable conditions could help a great deal. I.E. - if HRR increases beyond inflation at a 10 or 15% margin through increased revenue player A qualifies for a 10% bonus.
This talking point is going to be one of the least popular and most avoided. Fan bases are starting to see the cap ceiling and how few teams have room for a full roster without making some changes. Let me know your thoughts. Do you think players may find the market to be soft and return to offers previously refuted? It will be an interesting summer to be sure.
* - the second part of the article deals with specific tax law and an ongoing appeals case. It may not interest you at all, fair warning.
In the past I’ve gotten more than a little grief when talking about how players are taxed and the loopholes that were available. The link above shows tax rates for high earners like Tavares at about 53% in Canada and around 48% in New York (not NYC, which has some additional fees). Compound that with agent fees and escrow the past few years (3 straight years at 20%) and you can see where there complaints were coming in.
The signing bonus was a way around some of the taxes and fees. It was covered by the “capitol gains tax” at around 16%. This was a tool Toronto took full advantage of (wisely) allowing players to get the bulk of their annual pay before the season. That tax is in talks to go up to 38% in Canada and 44% in the U.S. Still less than the salary rate, but the twist in Tavares’s cases is a retroactive look at the signing bonus as salary. His 13m signing bonus turned into a 5m signing bonus. So what?
This puts back on the table players looking at states with lower withholding. While the desk personalities say that’s not even a consideration, ex GM Brian Burke has said that no trade clauses focused often on cities with higher withholding, even if they were the player’s home town or province.
There is a lot more to the proposal but that essentially covers the current lawsuit. Last year the NHLPA made it a priority to get Arizona into a place where they were bringing more to the table. At the very least, “The Outlaws” or whatever the final name ends up being will play in a professional arena. The PA has brought in some fairly smart consultants. For the “I don’t feel bad for someone making 5 million”, absolutely that’s a ton of take home. It’s also a career that can end in a second where most players seem to retire before 40. Add to that a roughly 2/3 divorce rate after retirement and that money starts to disappear quickly.
I care because revenue affects the sport. I know at least one of you who spoke to someone in jr hockey and the tax rate wasn’t at the listed 53%. That’s probably because you don’t make an average of 2 million - 2.5 million in jr hockey. Whatever your feeling, the players are starting to get past upset at the Escrow, taxes and underperforming franchises that hurt HRR. It’s well worth keeping an eye on. The owners? Probably loving the new rule. More franchises are moving away from bonuses as expenses shift. We’ll see how Tavares does on appeal but this is another issue that will have a specific impact in certain markets.
Detroit Red Wings Blogger • 
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