Paying a player taxes
View Single Post
07-09-2006, 07:21 PM
Join Date: Sep 2003
Location: Out There
Originally Posted by
Son of Steinbrenner
What if a team pays a players wife? Lets say the Rangers after giving Shanahan 4 million a year choose to pay his wife (no idea if he is a married but lets say he is) 2 million a year as a scout?
All agreements a club and/or a player enter into must be disclosed even those specifically permitted by the CBA such as endorsements.
That would be likely be considered an indirect payment and would be prohibited per Article 26.3 (a) - Clubs or Club Actors (entering into agreements which may have the effect of defeating the salary cap) and (b) Players or Player Actors entering into agreements which may have the effect of defeating the salary cap, team payroll range or free agency. If she was in fact a bona fide scout then an exception might be available if the agreement was reported but that seems highly unlikely.
Also 26.3(d) provides that no club or club actor or player or player actor may commit any act through a third party (for example a wife) where if such activity were attributed to the club or player himself would constitute a circumvention. Such activities carried out or even attempted to be carried out shall be then attributed to the club and/or player as the case may be and then the quite severe penalties for circumvention or attempted circumvention would kick in such as fines (minimum $1 million up to $5 million which also reduces a club's next year's salary cap by a like amount) and loss of draft picks for clubs and for the player forfeiture of the value of the agreement as well as fines of the lesser of $1 million or 25% of his salary. Player contracts and extensions may be voided
Also the Commissioner has complete authority to strip as many draft picks as he thinks approriate in any year or years and even declare whatever games affected by the circumvention to be forfeit. The player, player agent or club employees guilty of circumvention can be suspended for whatever time the Commissioner determines in his absolute discretion.
BTW failing to report any fact or circumstance by clubs. players and/or agents that MIGHT be a circumvention, is also classed as circumvention and subjects the club, agent and/or player to penalties.
Player agents must file a yearly certificate that they have no knowledge of any agreement, fact or circumstance or any proposed action which might be considered a circumvention per article 26. Failure to file costs an agent his certification and therefore he is unable to represent players. The new CBA brings agents under this system.
Similarly GM's, Chief Financial officers and Club Presidents must file a similar certificate or lose their jobs. This also applied to Clubs who must file through on of its Governors.
There are Investigators (the NHL commissioner or the Executive Director of the NHLPA) who can start an investigation on any grounds either on their own initiative or in response to a complaint from any party. The finding of the Investigator is not binding on a System Arbitrator who hears the case.
System Arbitrtator can order complete disclosure of any and all documents and information to the Investigator related to the circumvention being investigated including tax records, e-mails, any income or revenue information of the player or clube, etc.
There are independent judges (System Arbitrators) who determine if there has been a circumvention or attempted circumvention of the system. The System Arbitrator is permitted to consider direct or circumstantial evidence and even conclude that there is no reasonable explantion for aterm or an agreement other than circumvention.
The language on this is pretty tight and well-tested as this has been in force in similar contract language in the NBA and NFL for a number of years.
I do not think that clubs or players will want to ake a chance of being found to have circumvented the system - it is just too expensive. And failure to report can cost agents, players and club personnel their jobs as well as money.
View Public Profile
Find More Posts by Wetcoaster