HFBoards

Go Back   HFBoards > General Hockey Discussion > The Business of Hockey
Mobile Hockey's Future Become a Sponsor Site Rules Support Forum vBookie Page 2
The Business of Hockey Discuss the financial and business aspects of the NHL. Topics may include the CBA, work stoppages, broadcast contracts, franchise sales, NHL revenues, relocation and expansion.

Question: Illegal Payments

Reply
 
Thread Tools
Old
08-16-2009, 12:56 AM
  #1
kyle evs48
No words needed
 
kyle evs48's Avatar
 
Join Date: Feb 2008
Location: New Jersey
Country: United States
Posts: 30,056
vCash: 500
Question: Illegal Payments

I was reading Grisham's Bleachers, and one of the protagonists (a college athlete) would "find" large sums of cash (illegal, "anonymous" payments from his school).

So it made me think; do NHL players "find" sums of cash at times? Do franchises "anonymously" pay players in this illegal manner, as a means of slightly sneaking around the salary cap?

kyle evs48 is offline   Reply With Quote
Old
08-16-2009, 01:08 AM
  #2
kdb209
Global Moderator
 
kdb209's Avatar
 
Join Date: Jan 2005
Posts: 13,051
vCash: 500
Quote:
Originally Posted by LL Kyle View Post
I was reading Grisham's Bleachers, and one of the protagonists (a college athlete) would "find" large sums of cash (illegal, "anonymous" payments from his school).

So it made me think; do NHL players "find" sums of cash at times? Do franchises "anonymously" pay players in this illegal manner, as a means of slightly sneaking around the salary cap?
Very unlikely - the benefit is greatly outweighed by the potential sanctions for circumvention if caught - not to mention the possible federal charges for income tax evasion.

kdb209 is offline   Reply With Quote
Old
08-16-2009, 01:10 AM
  #3
LadyStanley
Elasmobranchology-go
 
LadyStanley's Avatar
 
Join Date: Sep 2004
Location: North of the Tank
Country: United States
Posts: 58,871
vCash: 500
It's a circumvention of the CBA and cap to do so. While NCAA fines teams/schools and can keep them out of playoffs, the penalties are a bit more severe for NHL. Teams can lose draft picks, be fined (team, personnel and player), forfeit games or even lose their franchise.

LadyStanley is offline   Reply With Quote
Old
08-16-2009, 01:24 AM
  #4
kdb209
Global Moderator
 
kdb209's Avatar
 
Join Date: Jan 2005
Posts: 13,051
vCash: 500
Quote:
Originally Posted by LadyStanley View Post
It's a circumvention of the CBA and cap to do so. While NCAA fines teams/schools and can keep them out of playoffs, the penalties are a bit more severe for NHL. Teams can lose draft picks, be fined (team, personnel and player), forfeit games or even lose their franchise.
Methinks you are slightly ovestepping the leagues authority here.

The penalties for Circumvention are circumscribed by Article 26.13 of the CBA. Draconian yes, but they do not hold grounds for revoking a franchise.

Quote:
Originally Posted by CBA Article 26.13(c)
(c) In the event that the System Arbitrator finds that a Circumvention has
been committed by a Player or Player Actor, the System Arbitrator may impose any or all
of the following penalties and/or remedies set forth below. In the event that the System
Arbitrator finds that a Circumvention has been committed by a Club or a Club Actor, the
Commissioner may impose any or all of the following penalties and/or remedies set forth
below:
(i) Impose a fine of up to $5 million in the case of a Circumvention by
a Club or Club Actor, but in no circumstances shall such fine be
less than $1 million against any Club or Club Actor if such party is
found to have violated Article 50 of this Agreement. If such a fine
is assessed against a Club (except in the case of a financial
reporting violation), that Club's Payroll Room shall also be
reduced by such amount for the following League Year, and if
such reduction of the Club's Payroll Room renders the Club out of
compliance with the Payroll Range (i.e., the Club does not have
sufficient Payroll Room to accommodate its Player commitments
comprising Club Salary) for such following League Year, then the
Club must take such steps as are necessary (e.g. Assignment, Buy-
Out, Waivers, etc.) and as are permitted by this Agreement to
ensure that the Club will be in compliance with Article 50 of this
Agreement upon commencement of the following League Year;

(ii) Impose a fine against a Player of up to the lesser of $1 million or
twenty-five (25%) percent of a Player's Paragraph 1 Salary in the
case of a Circumvention by a Player or Player Actor, but in no
circumstances shall such fine be below the lesser of $250,000 or
twenty-five (25%) percent of the Player's Paragraph 1 Salary.
Notwithstanding the $1 million limitation set forth above, any
additional amounts by which the Player has been unjustly enriched
due to the Circumvention shall be ordered to be disgorged;

(iii) Direct a Club to forfeit draft picks (the number, placement, and
League Year of which shall be determined in the Commissioner's
sole discretion);

(iv) Declare a forfeiture of any NHL Game(s) determined to have been
affected by a Circumvention;

(v) Direct a Club to disclose and report to the Independent
Accountants all information required by this Agreement, including,
without limitation, by the provisions of Article 50;

(vi) Void any SPC, or any extension of an SPC, between any Player
and any Club when both the Player or Player Actor and the Club or
Club Actor are found to have committed such a violation with
respect to such SPC or extension; and

(vii) Suspend any Club employee, Player, or Certified Agent involved
in such a violation for a period of time determined in the sole
discretion of the Commissioner, the System Arbitrator, or the
NHLPA, respectively.
And violation of the terms of the CBA would not fall under the grounds in the NHL Constitution for Involuntarily Termination of membership under Article 3.9 (violations of the CBA do not fall under the "Violation of this Constitution or the By-Laws or Rules of the League" clause) - especially since the itself CBA contains the explicit mechanisms for investigating and punishing those violations.

kdb209 is offline   Reply With Quote
Old
08-16-2009, 12:39 PM
  #5
FissionFire
Registered User
 
FissionFire's Avatar
 
Join Date: Dec 2006
Location: Portland, OR
Country: United States
Posts: 10,902
vCash: 500
Wouldn't franchise revokation be a separate issue from circumvention? Plus, that would be an internal league matter and not something involving the NHLPA so it wouldn't need to be collectively bargained. I'd imagine if payments of this type were somehow a violation of the NHL bylaws or franchise agreements that the BOG might have the authority to terminate a teams franchise agreement with the NHL. I'd imagine a team making these payments would also be trying to hide the revenues attached to them from the league to make the books balance. Cooking the books to the league might be something that could warrant that. I'm not familiar with the NHL Constitution or the current league bylaws so I'm not sure.

FissionFire is offline   Reply With Quote
Old
08-17-2009, 12:41 PM
  #6
KevFu
Registered User
 
Join Date: May 2009
Location: New Orleans
Country: United States
Posts: 4,058
vCash: 500
Quote:
Originally Posted by kdb209 View Post
Methinks you are slightly ovestepping the leagues authority here.

The penalties for Circumvention are circumscribed by Article 26.13 of the CBA. Draconian yes, but they do not hold grounds for revoking a franchise.

And violation of the terms of the CBA would not fall under the grounds in the NHL Constitution for Involuntarily Termination of membership under Article 3.9 (violations of the CBA do not fall under the "Violation of this Constitution or the By-Laws or Rules of the League" clause) - especially since the itself CBA contains the explicit mechanisms for investigating and punishing those violations.
It's not like the NHL actually lets Involuntary Termination happen...
technically, the Phoenix Coyotes membership was terminated when Moyes placed the team in bankruptcy.

KevFu is offline   Reply With Quote
Old
08-17-2009, 03:55 PM
  #7
Crazy_Ike
Cookin' with fire.
 
Crazy_Ike's Avatar
 
Join Date: Mar 2005
Country: Canada
Posts: 9,072
vCash: 50
Quote:
Originally Posted by LadyStanley View Post
It's a circumvention of the CBA and cap to do so. While NCAA fines teams/schools and can keep them out of playoffs, the penalties are a bit more severe for NHL. Teams can lose draft picks, be fined (team, personnel and player), forfeit games or even lose their franchise.
I would actually say its more severe for the NCAA schools if they get caught with something severe. They can and do get suspended right out of their leagues.

It's pretty dirty through and through though.

No NHL team has been caught doing this.

Crazy_Ike is offline   Reply With Quote
Old
08-18-2009, 01:12 AM
  #8
RandV
It's a wolf v2.0
 
RandV's Avatar
 
Join Date: Jul 2003
Location: Vancouver
Country: Canada
Posts: 15,822
vCash: 50
Quote:
Originally Posted by LL Kyle View Post
I was reading Grisham's Bleachers, and one of the protagonists (a college athlete) would "find" large sums of cash (illegal, "anonymous" payments from his school).

So it made me think; do NHL players "find" sums of cash at times? Do franchises "anonymously" pay players in this illegal manner, as a means of slightly sneaking around the salary cap?
I don't know how 'large' these sums of cash the college athletes are finding in your book, but I would think it's apples and oranges compared to professional athletes. In the college situation it wouldn't be that hard of an accounting trick for the school to 'lose' a few grand, and this becomes easily disposable money for a college student to play with. I mean, who audit's college students anyways?

To do this at the NHL level from the owner to the millionaire player, you could be talking 7 digit money laundering. First ownership has to find away to discretely raise this money, followed by the player being able to use the money, all without raising any red flags in accounting or on their taxes. I don't think it's nearly as plausible.

RandV is offline   Reply With Quote
Old
08-18-2009, 01:30 AM
  #9
Kritter471
Registered User
 
Kritter471's Avatar
 
Join Date: Feb 2005
Location: Dallas
Country: United States
Posts: 7,719
vCash: 500
Send a message via AIM to Kritter471
Generally, the illicit money in college athletics comes from boosters and not the school itself. Much easier to hide that way.

Kritter471 is offline   Reply With Quote
Old
08-23-2009, 11:58 AM
  #10
kyle evs48
No words needed
 
kyle evs48's Avatar
 
Join Date: Feb 2008
Location: New Jersey
Country: United States
Posts: 30,056
vCash: 500
Quote:
Originally Posted by RandV View Post
I don't know how 'large' these sums of cash the college athletes are finding in your book, but I would think it's apples and oranges compared to professional athletes. In the college situation it wouldn't be that hard of an accounting trick for the school to 'lose' a few grand, and this becomes easily disposable money for a college student to play with. I mean, who audit's college students anyways?

To do this at the NHL level from the owner to the millionaire player, you could be talking 7 digit money laundering. First ownership has to find away to discretely raise this money, followed by the player being able to use the money, all without raising any red flags in accounting or on their taxes. I don't think it's nearly as plausible.
In the book, which takes place in the 80's I think, the kid reminisced finding something like $50,000 in his trunk one night. Which means that was in the 70's, so it was a decent chunk of change.

But just imagine this:
A player decides to get some work done on his house. It doesn't matter what type of work it is really, anything that is done by guys who show up at your house in a panel van.

His GM "suggests" this one company. In reality, they're being paid off (handsomely, to entice them to involve themselves in a money laundering scheme) by the GM. The guys show up at the athlete's house in an ordinary van, looking like normal workers. In a toolbox or two in their van, is a large sum of money.

The athlete gets his bonus, and nobody aside from the guilty parties knows anything.

kyle evs48 is offline   Reply With Quote
Old
08-23-2009, 02:14 PM
  #11
Irish Blues
____________________
 
Irish Blues's Avatar
 
Join Date: Dec 2002
Country: St Helena
Posts: 21,804
vCash: 500
Let's see ... so you're suggesting
-- circumvention of the cap,
-- evasion of federal taxes, and
-- money laundering.

Yeah ... I can really see team executives and players [who've worked hard for years to get to where they are] try something like this. Considering that every GM [and/or team president and/or CFO] must attest every year that
-- they have not violated the provisions of Article 26, and
-- they will not violate the provisions of Article 26 in the upcoming year.

and that the penalties for violating Article 26 are not trivial, any team executives and players involved in such a scheme would very likely find themselves barred from the league for quite a while. For something as blatant as you're suggesting, the league would go medieval on everyone involved.

Oh, I know - "but it would be off the record, no one would say anything." The NHL's power to investigate this is broad and fairly unlimited, and not restricted by time - and the inability by the party or parties involved to explain an act or acts under investigation may be construed as a Circumvention by the System Arbitrator [meaning circumstancial evidence can be sufficient], and penalties levied as a result.

We've had this discussion in this forum numerous times. Anyone stupid enough to try doing this would be the nail to the NHL's hammer.

Irish Blues is offline   Reply With Quote
Old
08-23-2009, 02:18 PM
  #12
hfboardsuser
Registered User
 
Join Date: Nov 2004
Posts: 12,281
vCash: 500
Quote:
Yeah ... I can really see team executives and players [who've worked hard for years to get to where they are
That hasn't stopped a number of owners from trying worse outside of the game.

hfboardsuser is offline   Reply With Quote
Old
08-23-2009, 02:56 PM
  #13
Irish Blues
____________________
 
Irish Blues's Avatar
 
Join Date: Dec 2002
Country: St Helena
Posts: 21,804
vCash: 500
Quote:
Originally Posted by Mr Bugg View Post
That hasn't stopped a number of owners from trying worse outside of the game.
1. We're talking about GM's and team presidents, not owners - but what they heck, let's include them too. That said,
2. We're talking about violating Article 26 of the CBA. When one of the owners does this, then you've got a point.

[discussion about all teh bad that owners have done reserved for another thread - which everyone can probably identify, and where said discussion has been hashed out about 12,000,003 times now.]

Irish Blues is offline   Reply With Quote
Old
08-27-2009, 02:38 PM
  #14
kyle evs48
No words needed
 
kyle evs48's Avatar
 
Join Date: Feb 2008
Location: New Jersey
Country: United States
Posts: 30,056
vCash: 500
Quote:
Originally Posted by Irish Blues View Post
Let's see ... so you're suggesting
-- circumvention of the cap,
-- evasion of federal taxes, and
-- money laundering.

Yeah ... I can really see team executives and players [who've worked hard for years to get to where they are] try something like this. Considering that every GM [and/or team president and/or CFO] must attest every year that
-- they have not violated the provisions of Article 26, and
-- they will not violate the provisions of Article 26 in the upcoming year.

and that the penalties for violating Article 26 are not trivial, any team executives and players involved in such a scheme would very likely find themselves barred from the league for quite a while. For something as blatant as you're suggesting, the league would go medieval on everyone involved.

Oh, I know - "but it would be off the record, no one would say anything." The NHL's power to investigate this is broad and fairly unlimited, and not restricted by time - and the inability by the party or parties involved to explain an act or acts under investigation may be construed as a Circumvention by the System Arbitrator [meaning circumstancial evidence can be sufficient], and penalties levied as a result.

We've had this discussion in this forum numerous times. Anyone stupid enough to try doing this would be the nail to the NHL's hammer.
How the hell do you come to the conclusion that I'm suggesting this happens?

Does it not say "Question" in the thread title? I was looking for speculation. No need to make me feel like an idiot.

kyle evs48 is offline   Reply With Quote
Old
08-27-2009, 02:45 PM
  #15
Egil
Registered User
 
Egil's Avatar
 
Join Date: Mar 2002
Posts: 8,832
vCash: 500
The simple answer is that a NCAA athlete makes nothing, and hence, $50k is a lot of money for them, whereas a NHL player, and particularly one who needs extra payments, is making millions per year, so $50k is a nothing amount. Doing the same thing with $1 mil becomes much more difficult to hide, and much more difficult for the player to spend, and requires some serious tax evasion.

Egil is offline   Reply With Quote
Old
08-27-2009, 04:40 PM
  #16
Irish Blues
____________________
 
Irish Blues's Avatar
 
Join Date: Dec 2002
Country: St Helena
Posts: 21,804
vCash: 500
Quote:
Originally Posted by kyle evs48 View Post
How the hell do you come to the conclusion that I'm suggesting this happens?

Does it not say "Question" in the thread title? I was looking for speculation. No need to make me feel like an idiot.
From your own post: [letters in bold inserted by me as a reference to the comments that follow]
Quote:
Originally Posted by kyle evs48 View Post
But just imagine this A:
A player decides to get some work done on his house. It doesn't matter what type of work it is really, anything that is done by guys who show up at your house in a panel van.

His GM "suggests" this one company. B In reality, they're being paid off (handsomely, to entice them to involve themselves in a money laundering scheme C) by the GM. The guys show up at the athlete's house in an ordinary van, looking like normal workers. In a toolbox or two in their van, is a large sum of money.

The athlete gets his bonus D, and nobody aside from the guilty parties knows anything.
A = your hypothetical scenario. [Unless "imagine this" means something completely different than what just about everyone else here would believe it to mean - in which case, ]
B = the method by which the parties involved [both the GM and the player] circumvent the salary cap system, a blatant violation of Article 50 [and thus punishable under Article 26].
C = the "money laundering scheme" [you labeled it as such - if that's a problem, it's yours, not mine]
D = the "bonus" is taxable income; failure to report it is easy grounds to get rung up for tax evasion.

Here's my speculation: it will never happen unless people really want to get tossed from the league for years, have to pay huge fines to the League, and face legal problems along with it.

Irish Blues is offline   Reply With Quote
Old
08-27-2009, 05:09 PM
  #17
MAROONSRoad
f/k/a Ghost
 
MAROONSRoad's Avatar
 
Join Date: Feb 2007
Location: Maroons Rd.
Country: Canada
Posts: 4,069
vCash: 500
Here's a slightly different senario:

A team is trying to sign a free agent and lists all the benefits of playing in their market. One of the benefits mentioned is that there could be a lot of ways for the player to make supplemental income in the market by, for example, appearing in advertisments/commercials. The player joins the team and later signs a number of lucrative contracts to appear in commercials etc. for some of the team's main sponsors. Query: does the CBA address these types of situations at all?

GHOST

MAROONSRoad is offline   Reply With Quote
Old
08-27-2009, 09:28 PM
  #18
kdb209
Global Moderator
 
kdb209's Avatar
 
Join Date: Jan 2005
Posts: 13,051
vCash: 500
Quote:
Originally Posted by GHOSTofMAROONSroad View Post
Here's a slightly different senario:

A team is trying to sign a free agent and lists all the benefits of playing in their market. One of the benefits mentioned is that there could be a lot of ways for the player to make supplemental income in the market by, for example, appearing in advertisments/commercials. The player joins the team and later signs a number of lucrative contracts to appear in commercials etc. for some of the team's main sponsors. Query: does the CBA address these types of situations at all?

GHOST
Yes. It is addressed.

It is permitted for a player to receive money from a sponsor (who is not a Club Affiliated Entity) as long as the payments do not exceed fair market value - ie the team cannot funnel extra money to the player through it's sponsors.

It is OK for a player to appear (for example) in a local car dealer commercial.

It is not OK for a player to appear (for example) in a local car dealer commercial and be paid $2M dollars - unless the team/player can show to the satisfaction of the System Arbitrator that the $2M is not in excess of fair market value).

It is not permitted at all for the player to be paid by any Club Affiliated Entity.

Quote:
Originally Posted by CBA Article 26.3(e)
(e) No Club or Club Actor may provide, directly or indirectly, any Player or
Player Actor, with anything of value from a Club or Club Actor other than his Player
Salary and Bonuses set forth in, and in accordance with the terms of, his SPC, and his
share of Benefits and Government Mandates/Other Programs, as set forth in this
Agreement or as otherwise expressly permitted by this Agreement. A Player or Player
Actor may not receive, directly or indirectly, anything of value from a Club or Club
Actor other than his Player Salary and Bonuses set forth in, and in accordance with the
terms of, his SPC, and his share of Benefits and Government Mandates/Other Programs
as set forth in this Agreement or as otherwise expressly permitted by this Agreement.
Notwithstanding the fact that a Player must disgorge anything of value he may have
received in violation of the prior sentence, a Player shall not be guilty of a Circumvention
in the absence of knowledge that the entity from which he received something of value,
was a Club Actor. No Club or Club Actor or Player or Player Actor may engage in any
conduct that is intended to pay or provide, or has the effect of, paying or providing to a
Player, anything of value other than that which the Player may properly receive through
his SPC, and his share of Benefits and Government Mandates/Other Programs, or as
otherwise expressly permitted by this Agreement. For example, a Player is prohibited
from entering into an agreement with a broadcasting company that is a Club Affiliated
Entity, in which the Player agrees to host a weekly television show, for which he is to be
compensated the fair market value of such services, as this would be something of value
other than which the Player may properly receive through his SPC, or his share of
Benefits and Government Mandates/Other Programs, or as otherwise expressly permitted
by this Agreement.
(i) However, nothing in this Section 26.3(e) is intended to prohibit a
Player from entering into a sponsorship, endorsement or other
commercial arrangement with a local sponsor or entity with which
his Club does business but which is not a Club Affiliated Entity, in
which the Player receives something of value, provided the thing
of value received is commensurate with (i.e., not clearly in excess
of) the fair market value of the services rendered by the Player on
behalf of the sponsor or entity.
With respect to any sponsorship or
endorsement arrangement between a Player and a national sponsor,
any thing of value provided to a Player under such arrangement
shall be presumptively acceptable (i.e., such thing of value need
not meet the "fair market value" test set forth in the preceding
sentence), provided that such arrangement was not made at the
behest of the Player's Club or any other Club Actor. However, the
NHL shall have the right to challenge before the System
Arbitrator, through an expedited arbitration proceeding pursuant to
the third sentence of Section 26.13(a) below, the bona fides of any
such national sponsorship or endorsement arrangement on the
grounds that it was actually provided for the benefit of a particular
Club.

(ii) Each Club shall maintain a list of sponsors with which it does
business, which lists shall be updated as necessary and shall be
provided to the NHLPA periodically.

kdb209 is offline   Reply With Quote
Reply

Forum Jump


Bookmarks

Thread Tools

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off



All times are GMT -5. The time now is 03:39 AM.

monitoring_string = "e4251c93e2ba248d29da988d93bf5144"
Contact Us - HFBoards - Archive - Privacy Statement - Terms of Use - Advertise - Top - AdChoices

vBulletin Copyright ©2000 - 2015, Jelsoft Enterprises Ltd.
HFBoards.com is a property of CraveOnline Media, LLC, an Evolve Media, LLC company. 2015 All Rights Reserved.