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CHL Class Action Part 2.5

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Old
07-05-2016, 06:56 PM
  #101
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Originally Posted by Canadiens1958 View Post
The use of cash payments is very interesting. Time for the GST/PST/HST boys to have a look.
Giving players cash would not be a hst issue it might be a income tax issue if a players gets $6000 and does not claim it as income they could be in serious trouble.

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07-05-2016, 07:25 PM
  #102
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Interesting article, however I thought it would involve top tier players and major dollars being handed out under the table. Teams don't get fined 100's of thousands of dollars and multiple top picks for infractions of the Gottzman level. Side note, has anyone ever heard of this player? If he is getting a side deal, it begs the question if higher profile players get substantially bigger side deals.

Connecting the dots on Malcolm Subban getting "$0.50 from every Bulls ticket sold" - Belleville averaged about 2,500 fans/game so with estimated 40 home games (season + playoffs) that is 100,000 fans/year, or $50k/year to Subban if true. These kinds of under the table player payments would seemingly trigger the big types of fines mentioned in the article.

If the small market team financials cited in the article are to be believed, it also shows revenue and expenses of about $3.0 million for small market teams. Now look at large market teams (Quebec, London, Halifax, Portland) with 2-4x the revenue based on higher attendance (perhaps better sponsorships) and the same cost base and you see these teams generate multiple millions of profit annually.

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07-05-2016, 07:59 PM
  #103
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Originally Posted by BigGreenAlum View Post
Interesting article, however I thought it would involve top tier players and major dollars being handed out under the table. Teams don't get fined 100's of thousands of dollars and multiple top picks for infractions of the Gottzman level. Side note, has anyone ever heard of this player? If he is getting a side deal, it begs the question if higher profile players get substantially bigger side deals.

Connecting the dots on Malcolm Subban getting "$0.50 from every Bulls ticket sold" - Belleville averaged about 2,500 fans/game so with estimated 40 home games (season + playoffs) that is 100,000 fans/year, or $50k/year to Subban if true. These kinds of under the table player payments would seemingly trigger the big types of fines mentioned in the article.

If the small market team financials cited in the article are to be believed, it also shows revenue and expenses of about $3.0 million for small market teams. Now look at large market teams (Quebec, London, Halifax, Portland) with 2-4x the revenue based on higher attendance (perhaps better sponsorships) and the same cost base and you see these teams generate multiple millions of profit annually.
Sure but how many were sold tickets I know there has been some rumors many Ohl teams give away more tickets out then they sell.

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07-05-2016, 08:11 PM
  #104
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Originally Posted by Lord J T Shark View Post
http://www.tsn.ca/talent/former-ohl-...stake-1.521583

I actually forgot about these lawsuits and now that stuff is coming out the information is interesting






a different player
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Sure but how many were sold tickets I know there has been some rumors many Ohl teams give away more tickets out then they sell.
Your guess is as good as mine but no matter what Subban getting 5 figures annually under the table if he actually got $0.50 per ticket sold. I know of a few 6 figure annual deals for stars in big markets. When you look at the economics breakdown I illustrated it is pretty clear the large market teams have money available for large under the table payments. I am not saying everyone does make under the table payments but rather pointing out thy have the means to do so.

Per the article "In 2012, the Windsor Spitfires were fined $250,000 and lost two first-round and two second-round draft selections after they violated the OHL’s player benefit and recruitment policies." I suspect Windsor's under the table payments were far in excess of what Erie did with Gottzman.

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07-05-2016, 08:59 PM
  #105
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White Money

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Originally Posted by jason2020 View Post
Giving players cash would not be a hst issue it might be a income tax issue if a players gets $6000 and does not claim it as income they could be in serious trouble.
Assuming that white money was involved all the way down the trail and across the league is not a safe assumption.

Few years ago the semi-pro senior league in Québec had similar issues and it was the PST/GST that was in play. Québec has not entered the HST agreement.

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07-05-2016, 09:19 PM
  #106
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My concern is the courts will say yes the players should be paid but must pay there own room and board and players are shocked when reality hits with what the costs really are.
If they can't afford to, then they'll have to pay higher wages otherwise children won't be going this route for their hockey career.

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07-05-2016, 10:34 PM
  #107
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As part of the litigation, the plaintiff's counsel procured a study comparing the various experiences CHL players had across the three leagues:

http://www.chlclassaction.com/wp-con...h-exhibits.pdf

The whole thing makes for interesting reading if you're interested in surveys, research methodology, etc - otherwise, the responses themselves start at page 90 of the document.

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07-06-2016, 01:24 PM
  #108
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If they can't afford to, then they'll have to pay higher wages otherwise children won't be going this route for their hockey career.
Take Ottawa a small condo is $900 a month then factor in other costs but in Gatineau for that same condo its $500 now should a player get paid the same in both markets if so you could see serious push back.

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07-06-2016, 06:25 PM
  #109
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The billet nightmare story is disturbing, I've always heard great stories about billet families, I wonder how many similar negative experiences kids have. The teams should be monitoring that and if necessary find another billet if a kid is unhappy with his situation.

I don't think they should be paid a salary, the NCAA doesn't ... yet. The NCAA does provide a much better standard of living though. They should be paid an allowance that takes care of incidentals - 50 bucks is a joke. And if a kid comes from a family that is under a certain household income those kids should be given a larger allowance.

CHL is going to lose this lawsuit, only question is what changes the court will force the CHL to make and how much the league is going to have to pay out to those players covered by the class action.

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07-06-2016, 06:57 PM
  #110
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CHL franchises are worth millions and can afford to pay players according to a Brock Univ. Asst. Professor of Sports management.

http://www.tsn.ca/talent/chl-franchi...study-1.522306

As described, not a scientific study. In what world is the Mississauga Steelheads (44.85 mil) worth more than the London Knights (32.02 mil) ?

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07-06-2016, 07:55 PM
  #111
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Originally Posted by Mightygoose View Post
CHL franchises are worth millions and can afford to pay players according to a Brock Univ. Asst. Professor of Sports management.

http://www.tsn.ca/talent/chl-franchi...study-1.522306

As described, not a scientific study. In what world is the Mississauga Steelheads (44.85 mil) worth more than the London Knights (32.02 mil) ?
Someone posted a side by side photo (don't know how to post it here) but essentially if you take the cities that each OHL team resides in and order them according to population, it just so happens to match up with the monetary order from the above article. That's some good math there huh? Lmao

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07-06-2016, 08:58 PM
  #112
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Originally Posted by Kingpin794 View Post
Someone posted a side by side photo (don't know how to post it here) but essentially if you take the cities that each OHL team resides in and order them according to population, it just so happens to match up with the monetary order from the above article. That's some good math there huh? Lmao
Just did the same thing with just the OHL using the team values from the research posted in the TSN article. Thought it would be interesting to see if each city's values could have been based on population. After looking up populations on Wikipedia and Google, my guess is that's what the values are based off of. But who knows...


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07-07-2016, 12:31 AM
  #113
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Author of that tsn piece is going to catch a lot of heat for that insane piece. Mississauga 44 million?

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07-07-2016, 01:12 AM
  #114
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When I played junior hockey (seems like 1000 years ago), school was actively discouraged by team staff. "You're a student or you're a hockey player" was the standard line. And in those days one could quit school at age 16, so the choice was easy for most of us. What teenage boy wants to spend the day in class when the rink and weight room are available? And I know some people won't want to believe this, but if all of my teammates had been told "we'll pay for your university studies after you finish playing," we'd have looked at them like they were nuts. Didn't want it, didn't need it, likely wouldn't even be eligible for admission anyway -- couldn't I just have a dozen or so new Sherwood PMPs instead? Wouldn't mind trying out a few Kohos, too.

But lots has changed. Most of the guys I played with had dads who worked on the line at the plant and moms who either stayed at home or worked as filing clerks. Blue collar folks. My own dad was a high school dropout who worked a blue collar job his whole life. Mom worked at a canning factory. Today, go to even a midget AAA hockey game and the parking lot is filled with expensive SUVs. Dads are accountants and lawyers, moms are real estate agents and doctors. They're educated people with money. Totally different class of people compared to years ago. What happened to all the farmers kids?

These new folks see options for their kids and junior hockey is just one. In a lot of ways the whole "CHL education package" is just bribing parents to nudge their kids in the direction of junior hockey. The part about it that makes me shake my head is that a single season of elite Novice AAA hockey in Canada costs more money than a single year of undergraduate tuition at a typical Canadian university. Families that have already spent more than $100K on their kids' youth hockey development and would find 3-4 years of university tuition far less onerous are really caving pretty cheaply.

One thing is for sure. Junior hockey is intended to produce hockey players, not scholars. The NHL doesn't drop $10 million dollars per year on the CHL because the players have high Grade Point Averages. A coach or general manager of a losing team doesn't get to keep his job because a high percentage of former players are using their education packages. One could argue that he'd be more likely to keep his job if a LOW percentage of former players are drawing on this money. After all, what business rewards employees who cost them money?

Junior hockey isn't about "student athletes" or post-secondary education or anything like that. Never has been, and lots of teams are in places that don't even have a university. No, the CHL is a 60-franchise factory farm operation in two countries designed to generate profits and grow hockey players. If the CHL sent 99% of its aged-out players to university and 1% to professional hockey, the entire enterprise would be a failure.
The other thing to consider though, having personally been on the other side of it... for every single kid that plays in the CHL, there are 100 other kids who want their spot.

As much as some would argue CHL players are "employees", I'd argue that CHL players are also students gaining crucial job skills for free (with room and board!) that most kids would kill for. There really is something to be said for immersing yourself in a the game without having to worry about the rest of general life, getting access to high level coaching staff, being able to surround yourself in high level players, having access to the high level facilities... and that is even ignoring the fantastic life experience one gains from playing sport at a high level and gaining that camaraderie and experience travel the country with buddies.

Honestly, ignoring abuse situations and other oversights, I think anyone disappointed with their junior experience needs to take a look in the mirror, because I would bet that you could completely eliminate all fiscal compensation entirely, including room and board, and the entire CHL would still be full to the brim with Prospects wanting to play there.

I have never heard a single person who played in the CHL be negative about their experience. I know about a hundred people on the flip side who were inches away from it but didn't have the size, got cut in camp, or just didn't preform when the scouts were out who were completely heart broken about missing that opportunity.

I worry that these lawsuits will take this tremendous opportunity from many kids due to smaller markets folding. Teams like Swift Current, Owen Sound, Acadie-Bathurst, etc. A solid 75% of CHL teams only hit just over 2k people on average. If anything we want more Major Junior Players, not less.

I think the only one that benefits here are Lawyers and Unions. Both of these **** me off on most days.

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07-07-2016, 01:59 AM
  #115
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I agree and i'm very pro union. The whole thing feels overly litigious.

I'll readily admit that there isn't a comparable, non hourly wage, workplace to the CHL. But it's unique, and I don't think it's a bad thing. And i'm not convinced that more than a handful of teams are seriously profiting(marginally, sure)

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07-07-2016, 02:10 AM
  #116
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And i'm not convinced that more than a handful of teams are seriously profiting(marginally, sure)
Which is irrelevant since we don't just let companies skip paying their employees.

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07-07-2016, 05:30 AM
  #117
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Which is irrelevant since we don't just let companies skip paying their employees.
The differences is we don't say a worker at local grocery store should get a huge salary should it be fair yes but should a grocery worker be making $100,000 a year and not have to pay taxes no.

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07-07-2016, 05:36 AM
  #118
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Originally Posted by BiPolarBear View Post
The billet nightmare story is disturbing, I've always heard great stories about billet families, I wonder how many similar negative experiences kids have. The teams should be monitoring that and if necessary find another billet if a kid is unhappy with his situation.

I don't think they should be paid a salary, the NCAA doesn't ... yet. The NCAA does provide a much better standard of living though. They should be paid an allowance that takes care of incidentals - 50 bucks is a joke. And if a kid comes from a family that is under a certain household income those kids should be given a larger allowance.

CHL is going to lose this lawsuit, only question is what changes the court will force the CHL to make and how much the league is going to have to pay out to those players covered by the class action.
I could see the courts hand them $60 million but order the players to pay back room and board lets say $10 million plus this will have to pay back taxes etc another $20 million.

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07-07-2016, 05:52 AM
  #119
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Right now, the court proceeding is solely about receiving certification as a class. That's the only motion before the court.

If you look closely at the various documents available on the website of the plaintiff's legal representatives, nearly everything is intended to demonstrate a commonality of experience for the players in the proposed class and a commonality of actions by the employers (all of the teams).

Ontario's Class Proceedings Act (1992) sets the legal test the proposed class must meet. Here's an excerpt from Section V:
Certification
5. (1) The court shall certify a class proceeding on a motion under section 2, 3 or 4 if,

(a) the pleadings or the notice of application discloses a cause of action;

(b) there is an identifiable class of two or more persons that would be represented by the representative plaintiff or defendant;

(c) the claims or defences of the class members raise common issues;

(d) a class proceeding would be the preferable procedure for the resolution of the common issues; and

(e) there is a representative plaintiff or defendant who,

(i) would fairly and adequately represent the interests of the class,

(ii) has produced a plan for the proceeding that sets out a workable method of advancing the proceeding on behalf of the class and of notifying class members of the proceeding, and

(iii) does not have, on the common issues for the class, an interest in conflict with the interests of other class members. 1992, c. 6, s. 5 (1).

Right now, meeting these statutory requirements is the singular goal of the proposed plaintiffs.

In other words, there's still a long way to go before we get the really juicy stuff, and there's a reasonable chance we never will. My understanding is that Saskatchewan and Nova Scotia already passed legislation that at least partially exempts CHL clubs in those jurisdictions from broader labour standards requirements, and BC is soon to do the same. If this trend continues, the CHL should have a clear path moving forward. If that proves to be the case, the league may wish to dispose of the current proposed class action via settlement, secure in the knowledge that it's a one time thing.

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07-07-2016, 06:59 AM
  #120
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The defendants also have a website that has everything on it - it makes for interesting reading: http://www.chldefence.com/

I noticed that in the affidavit of Denise Burke, a co-owner for the Ice Dogs, she claimed that the community events that the players were participating in were voluntary, no one was required to attend - but if you look at the billet handbook that it attached as an exhibit, it specifies that all community events are compulsory ("not optional") for the players

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The other thing to consider though, having personally been on the other side of it... for every single kid that plays in the CHL, there are 100 other kids who want their spot.

As much as some would argue CHL players are "employees", I'd argue that CHL players are also students gaining crucial job skills for free (with room and board!) that most kids would kill for. There really is something to be said for immersing yourself in a the game without having to worry about the rest of general life, getting access to high level coaching staff, being able to surround yourself in high level players, having access to the high level facilities... and that is even ignoring the fantastic life experience one gains from playing sport at a high level and gaining that camaraderie and experience travel the country with buddies.

Honestly, ignoring abuse situations and other oversights, I think anyone disappointed with their junior experience needs to take a look in the mirror, because I would bet that you could completely eliminate all fiscal compensation entirely, including room and board, and the entire CHL would still be full to the brim with Prospects wanting to play there.

I have never heard a single person who played in the CHL be negative about their experience. I know about a hundred people on the flip side who were inches away from it but didn't have the size, got cut in camp, or just didn't preform when the scouts were out who were completely heart broken about missing that opportunity.

I worry that these lawsuits will take this tremendous opportunity from many kids due to smaller markets folding. Teams like Swift Current, Owen Sound, Acadie-Bathurst, etc. A solid 75% of CHL teams only hit just over 2k people on average. If anything we want more Major Junior Players, not less.

I think the only one that benefits here are Lawyers and Unions. Both of these **** me off on most days.
This is the same rationale when people try to justify jobs that are masquerading as unpaid internships. However, the demand for a position or the enjoyability of the experience don't change its ultimate character.


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07-07-2016, 08:31 AM
  #121
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Author of that tsn piece is going to catch a lot of heat for that insane piece. Mississauga 44 million?
Did you even read the article? Those aren't his figures. He even points out that the numbers don't line up and did his own research to contradict some of the findings:

Quote:
His study is sure to draw scrutiny after he valued the Knights, a franchise that has repeatedly led the OHL in attendance in recent years and has a virtual monopoly in its market, for so much less than franchises in Ottawa and Mississauga, Ont., where major junior teams compete against NHL clubs for attention and sponsorship dollars.

[...]

To be sure, some of the estimates used in Mongeon’s study are widely off.

He estimates that the Knights generate $1.1 million from ticket sales each season and that the Kitchener Rangers, whose average attendance of 7,012 in 2015-16 was second in the OHL to London, made $646,410 from ticket sales.

The Rangers are controlled by a group of about 4,500 community-based owners and the team’s annual report, which is distributed to those owners, shows the Rangers make far more money than Mongeon’s estimate.

The Rangers generated regular-season ticket revenue of $3.4 million for the year ended May 31, 2015, according to a copy of the team’s 2015 annual report obtained by TSN.

The Rangers made an additional $2.4 million in sponsorships.
Westhead is a pretty smart dude and has been tracking the CHL story for some time. He knows what he's talking about.

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07-07-2016, 10:03 AM
  #122
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The differences is we don't say a worker at local grocery store should get a huge salary should it be fair yes but should a grocery worker be making $100,000 a year and not have to pay taxes no.
Because I'm not paying to see the clerk. And grocery shopping isn't on Sportsnet or sponsored by CCM.

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07-07-2016, 02:52 PM
  #123
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Because I'm not paying to see the clerk. And grocery shopping isn't on Sportsnet or sponsored by CCM.
So in your mind a jr player should be making more then a adult who has had 10 years of education.

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07-07-2016, 03:07 PM
  #124
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So in your mind a jr player should be making more then a adult who has had 10 years of education.
A typical junior hockey player has more than 10 years of formal education. Am I missing a larger point you wish to make?

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07-07-2016, 07:06 PM
  #125
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This is the same rationale when people try to justify jobs that are masquerading as unpaid internships. However, the demand for a position or the enjoyability of the experience don't change its ultimate character.
Do you have a problem with unpaid internships? It is the same concept...I mean, if you are just making someone coffee then that isn't really an internship. But if you are learning valuable life / career skills and getting a huge boost to your Resume, can you really say it is exploitative? It might not be fair that some people can't afford to do an unpaid internship, but that is really no different than people being unable to afford post secondary. Or even not being able to afford a new car.

If someone is willing to sign a contract to say they will "work" without financial compensation, why would that be an issue? Especially when the vast majority of the actual "work" is you being a liability to someone else who has to train you with competent well paid staff, and you leave just as you are getting useful.

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