NHL Lockout – The cost of NHL players

Posted: September 24, 2012 in Uncategorized
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Unless you’ve been living under a rock. the NHL has been locked out. AGAIN! Since I’ve been following the sport from an early age from the 80s, this is now the third lockout of the league. There has been a lot of talk about who is to blame for the lockout, whether it’s the owners/NHL or whether it is the players. In my humble opinion, it takes two to tango and there has to be blame placed on both parties. If the NHL and the NHLPA knew that the Collective Bargaining Agreement (CBA) was coming to its end, why did they not start negotiating about it sooner? There was talk on the likes of TSN that the CBA issue would have been discussed at the annual GM’s meeting in Florida, but alas it was not something that was featured heavily on the agenda.

 

However, rather than ponder the causes and the colossal failure on getting the season started in the NHL, I wanted to focus on something that has fans anticipating and holding their breath over: “Which NHL players will play in Europe?”

 

While the KHL has been a big draw, specially to the Russian born NHL players, there are players heading out to Switzerland and other leagues, like the Swedish second tier, Allesvenskan, the Finnish SM-Liiga and so on.

 

But what is the biggest hold up or, barrier for NHL players on coming over to Europe? The answer can come down to six letters: TTD and ITC

 

TTD:

Apart from players’ salaries during the lockout, there is one thing that can often be a barrier to players playing in Europe or other leagues, and that is Temporary Total Disability Insurance. Each locked out NHL player needs to have a TTD-Insurance in case their career comes to an abrupt end during the lockout.  During the last lockout, the cost of the TTD insurance was in the tens of thousands of Euros.

 

According to TSN, the costs of the TTD insurance can range between $2,500 to $20,000 per month. Basically, the better the player, the higher the cost. Obviously the cost of the insurance depends on the contract wage and the offer that teams/players receive from the insurance companies. It was reported in Savon Sanomat (24/09/2012) that NHL’s top scoring talent, Steven Stamkos, had been offered to SM-Liiga team Porin Assat. Not once but twice, but the team had to turn it down with speculation of Stamkos’ insurance costing the team €40,000 per month. Usually, though, players have been known to contribute towards their own insurances. 

 

Imagine if a player like Sidney Crosby went to an European league. The cost of his insurance could be astronomical.

 

ITC:

Another thing that can hold up any transfer is that NHL players moving to an European league under the IIHF is the International Transfer Card (ITC). The ITC is needed for any player wishing to play in an European league, and as far as I know, all NHL players wishing to play in the IIHF events such as the Olympics or the World Championships need an ITC card. I know from personal experience that the ITC can be a pain as I had to obtain one to play higher than rec hockey.

 

The ITC cost, for an unlimited card, can be in the region of €1,000/$1,295. Sure it’s not as much as the insurance, but for a piece of paper that doesn’t take more than a few clicks to sort out, it is a lot of money for a team/player to shell out. With the influx of NHL players heading to Europe, the IIHF has struggled a little bit to get everything sorted out and there has been a backlog of transfers that the IIHF has had to shift through.

 

The other thing that players need to consider is the taxation. For example, if a player signs in the Finnish league and stays in the country for over six months out of the year, he will be taxed in accordance with the Finnish taxation system. I personally would not be at all surprised if we would see an influx of North American players signing in countries where the tax regulations aren’t as strict as they are in some other countries. For the Russian players, I can understand why the KHL is the number one choice. It is a chance to spend a prolonged period in their native, which I can’t fault. I can’t comment on the Russian taxation system and how it all works in the KHL in terms of tax and whether it still is as wild as back in the days when some players picked up their salaries in cash and carried it away in their hockey kit bag.

 

So there, that’s some insight to take into consideration into when players are looking to sign in Europe. Sure it would be great to have Brad Richards playing in the UK (seriously someone made this claim), but when you think about it with all the factors included, there might be only a handful of teams that can justifiably recruit NHL players on to their rosters.  In addition, considering the fact that some teams in Europe are not turning a profit, so as big as the temptation might be, financially it might not make sense

 

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