EDMONTON – According to key figures within the National Hockey League and the NHL Players` Association, who are currently engaged in negotiating a new collective bargaining agreement, the issue of state income tax and its influence on player decisions and team performance is not considered a significant problem.
NHL Deputy Commissioner Bill Daly acknowledged that “Certainly, it’s an issue that some of our franchises have raised as a concern.” However, speaking in Edmonton on Wednesday evening, he clarified the league`s stance: “What I’d say at this point is, we don`t share the level of concern that they have.” Daly pointed out that these tax disparities are not new, stating, “These imbalances have existed forever. Like, there’s nothing new here.” He added that numerous factors influence a player`s choice of location, team, or coach, many of which “have nothing to do with the tax situation in that market.” Consequently, he does not anticipate this issue being proactively addressed in the upcoming collective bargaining negotiations.
The recent dominance of teams from no-tax states – the well-managed Florida Panthers reaching three consecutive Stanley Cup Finals, taking over from the equally well-managed Tampa Bay Lightning, and the Vegas Golden Knights from tax-free Nevada making it to three Finals since their 2017-18 debut – has prompted complaints of unfairness from general managers and fans in areas with high tax rates.
However, NHLPA Assistant Executive Director Ron Hainsey expressed his “baffled” reaction to state tax rates becoming such a prominent topic of discussion.
Hainsey referenced the period from 2008 to 2020, when the league saw success from teams like Pittsburgh, Chicago, Los Angeles, Detroit, and Boston. He argued that star players from these teams, such as Brad Marchand, Patrice Bergeron, Zdeno Chara, Sidney Crosby, Evgeni Malkin, and Kris Letang, could have potentially earned higher net salaries elsewhere but chose to remain. Their reasons, he suggested, were tied to playing for a good team, liking where they lived, and not wanting to move. He contrasted this 12-year span with the recent six years of Tampa Bay and Florida`s success, asking, “Just going off the previous 12, I guess we`ve got to wait six more years to see if there even is an issue, right?”
Winning championships, according to Panthers GM Bill Zito, is not solely dependent on free agents accepting lower nominal salaries offset by tax advantages. Zito highlighted committed ownership, cultivating a winning and inclusive team culture, and strategically addressing roster needs through trades as more crucial elements.
Zito succinctly stated, “The tax thing is marginal at best.”
Attempting to build a state and provincial tax adjustment clause into the salary cap structure would be highly complex. This is further complicated by varying costs of living in each NHL city and the unique financial position of Canadian players who earn in U.S. dollars but manage expenses in Canadian currency.
The question remains whether the perceived advantage of playing in states with no income tax is being overblown.
Panthers defenseman Seth Jones admitted that players naturally prefer larger paychecks, which could contribute to the decision-making process. However, he suggested the current trend might simply be “just the way it`s happening right now,” possibly a cyclical phenomenon. He also pointed out that successful teams often benefit from strong drafting, retaining players for their entire careers. Jones concluded that perhaps the issue is “looked into too much.”
Hainsey confirmed that the topic occasionally comes up within the Players` Association but firmly believes the concern is exaggerated.
He argued that it is an overreaction to complain about Florida and Tampa Bay`s current success when good players chose to stay with good teams, just as happened with other successful teams over the prior 12 years. Hainsey questioned whether it “Is it really an issue?” and doubted “if we could expect Florida and Tampa to not be great at some point in the cycle.”
Duncan Priestley