Call of the Wilde: The Taxman cometh
Published Sunday, March 20, 2016 12:40PM EDT
Montreal Canadiens general manager Marc Bergevin speaks to the media at a press conference Thursday, July 2, 2015 in Brossard, Que. (THE CANADIAN PRESS/Ryan Remiorz)
Marc Bergevin has faced harsh criticism for not adding a single top six forward to his roster in four years as general manager. It is easy to say “How inept is this guy, that he hasn't made one unrestricted free agent signing to fill such an obvious hole in the roster?”
Why can't he just get a guy like other teams do and improve the roster?
Well, let me tell you how it will be. There's one for you and 19 for me. Cause I'm the taxman. Yeah, the taxman.
Yes, as the Beatles sang, the base of Bergevin's UFA woes could very well be in the Canadian taxation system.
The tax bracket for an athlete in Canada when he is making tremendous amounts of money is over 50 per cent.
Even though PK Subban is making $13 million Canadian, he is taking home six to seven million. In the USA, depending on which state a player is in, he can be taxed at 30 per cent. Subban in Dallas could take home $9 million Canadian dollars. This is a significant difference.
That means for Marc Bergevin to convince a player to come to Montreal, he has to entice them on market variables like, he can win a cup here, or the weather in the winter is awesome, or the tradition of the proud Canadiens franchise trumps all.
Let's be serious here: there's no market variable in the world that comes even close to trumping 20 cents on the dollar; 200 thousand on a million, one million dollars in your pocket on five million.
So Bergevin has to overpay to win the rights to an unrestricted free agent. This is a doable task in a hockey crazy market like Montreal. The Habs make way more money so they can spend way more money. Screech!!!!
No it's not a doable task at all. It was doable before the salary cap when rich teams like Montreal were free to overspend. However, now the salary cap stops the Habs from spending more. Their one advantage of making huge sums of money because of a rabid fan base filling the Bell Centre with exorbitant prices on tickets, parking, beer, and merchandise isn't an advantage at all. Sure it's an advantage to Geoff Molson to line his pockets, but not to Bergevin, who isn't allowed to spend those profits and who, because the taxman cometh, has to overpay for a free agent. And if he's overpaying for one free agent, then he's at a big disadvantage on another player. Overpaying by 20 per cent to get Stamkos means he's underpaying other players by 20 per cent to get Stamkos.
Should 5 percent appear too small, be thankful I don't take it all. Cause I'm the taxman. Yeah, I'm the taxman.
This year there will be no Canadian teams in the NHL playoffs. This is rare. Certainly I am not making the argument that the Canadian taxation system is so taxing (sorry) that a Canadian team can't even make the playoffs, but I am sure that you can see that it doesn't help.
It has now been 23 years since a Canadian team won the cup. Twenty-three years in a row an American team with a 20 per cent advantage to sign unrestricted free agents will celebrate by hoisting Canada’s obsession over their heads. Canada comprises almost a quarter of the franchises but has won the Cup zero per cent of the time with only five finals appearances in 23 years.
The system, though, isn't just free agents in the NHL. The amount of unrestricted free agents per team isn't that high, really. The playing field is completely even for players in the first three years of their careers. However, that is the only time it is even. After three years, the playing field begins to tilt in America's favour as soon as any form of free agency begins.
Is it a complete coincidence that Canada can't win the Cup? I don't think it is. However, it's very difficult to make this thesis entirely quantifiable.
So many factors come in to play. The fact remains, though, that a Canadian GM can't make a mistake starting the game at a 20 per cent disadvantage. Bergevin is down a rook and a knight before the game is afoot.
To me, it feels like a Canadian GM starts with a disadvantage and has to be perfect in his roster moves and player evaluation to make up for the fact that when an agent like Don Meehan does the math for a player free agent with two offers in front of him, one from Canada and one from America, the player says "Wow, they have to overpay me in Canada, and if they have to do that, how are they going to get me some awesome teammates when they're already against the cap because of me?"
Food for thought. It makes me think Bergevin heading into his fifth season, still pathetically not acquiring one top six forward may not all be his fault.
Cause I'm the tax man, oh oh oh, the tax man.