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Bruce Dowbiggin

Winning Olympic Medals A Taxing Experience

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There’s an old British racing expression that says what you lose on the swings you make up on the roundabouts. That’s also the attitude off predatory governments around the world as they see the spoils athletes are enjoying and want an undeserved piece of the action.

The Olympics are a prime target. Athletes who win a gold medal will receive US$37,500, while a silver medal will provide US$22,500 and a bronze medal US$15,000.  In addition, World Athletics, the international governing body for athletics, has pledged to award $50,000 to gold medalists in track and field events, with relay teams splitting the money. Plus bonus money under personal contracts are also targeted.

As reported by Sportico, “Under a U.S-France tax treaty, “artistes and sportsmen”—a classification that covers Olympic athletes—are exempt from paying French taxes on up to $10,000 or its equivalent in Euros for services performed while in France. After $10,000, those earnings are taxable.

A $15,000 with-holding tax is being used by France on visiting athletes during the Games. (Athletes typically do get a credit in their home tax jurisdiction versus any deductions made outside their home area.)

Gold, silver and bronze medals all carry prizes that exceed $10,000, and the amounts exceeding the $10,000 threshold will be subject to French taxes. Those taxes generally range from 11 percent to 45 percent depending on the level of earnings. A leading expert on French tax law told Sportico that U.S athletes must “declare all French source income” and will be subject to a “15% withholding [that] is offset against personal income tax due.”

The French are hardly unique. For some time now municipal, state, provincial and federal governments have docked athletes for the amounts of their contracts paid for time spent in their jurisdictions. These so-called “jock taxes” deduct a figure proportionate to their salary relative to the number of days they do business in a jurisdiction.

When Canadian NHL teams were suffering from a low dollar in the early 2000s provincial governments introduced the tactic. Combined with the Canadian Assistance Program, this kept Canada from losing more than just Winnipeg and Quebec City to American markets. While not universally employed jock taxes are used in many places where the highest-grossing athletes play.

Naturally, athletes and their agents are looking to fight back against the encroachment of the tax man. (Ever notice that no one complains about making the term more inclusive? Tax Woman?) One of the ways they are doing this as salaries zoom to $50 million a year for more is to minimize their tax hit by heading to a state or province with a more conservative tax regime.

As we point out in our book Deal With It: The Trades that Shook The NHL & Changed Hockey, the 2022 defection of Matthew Tkachuk and Johnny Gaudreau from Calgary to American markets illustrated the peril faced by Canadian teams playing within a high-tax regime. Both players had expiring contracts— Gaudreau’s in 2022, Tkachuk’s in 2023. While Calgary was willing to meet their market value, they could not equal the after-tax packages both wanted.

Tkachuk, in particular, used the threat of walking away from Calgary to force a trade to Florida, a state with no state income tax. The Flames ended up trading him in a deal to the Panthers who made two Stanley Cup Finals— winning the Cup this year. The defection of Tkachuk and Gaudreau (to Columbus) gutted the Flames who are now re-tooling with younger players who are years from being able to use the NHL’s draconian salary cap to force a move.

There are five states with NHL teams that have a no-state-tax regime (Florida, Texas, Tennessee, Nevada, Washington). That makes them highly attractive to a player seeking to maximize his top contract. (Warm weather and anonymity away from the rink are also big draws.) The inequity is particularly punitive for Canadian teams which all function in very high tax regimes.

Leading some to demand the NHL tweak its salary cap to mitigate against tax breaks. As Eric Duhatschek writes in The Athletic, “The problem is that while there’s a lot of grumbling about the advantages that teams such as Florida and Tampa Bay may have, there isn’t a lot of belief that the system is about to change. For one thing, a change of this magnitude would have to be collectively bargained, and so the default position of the league is, if we need to address this at all, we’ll address it in 2026 when we need to go back to the bargaining table with the players’ association.”

Duhatschek points out that it takes more than low taxes to lure prime players. One executive told him, “His point was that Florida, Tampa Bay and Vegas all did something far better than any other team and that was why they won. Not because of the state tax codes. Tampa Bay found value in Nikita KucherovBrayden PointOndrej PalatAlex Killorn as players chosen deeper in the draft.

“Florida found gold on the NHL scrap heap: Carter VerhaegheGustav Forsling, Oliver-Ekman Larsson. Sam Bennett  came for a second-rounder and a prospect. Brandon Montour was practically a giveaway too (third-round pick). Sam Reinhart provided great value (2022 first-rounder, plus goalie prospect Devon Levi). And trading the No. 2 overall scorer in the 2021-22 season (Jonathan Huberdeau) as part of a package for Matthew Tkachuk took enormous guts by GM Bill Zito.”

It’s not just Americans wanting to avoid Canadian taxes. One agent privately admitted that Canadians would be shocked to know bow many Canadians have high-tax Canadian market on their no-trade-to list. So we might soon be saying that the only assurances in a hockey life are death, taxes and the power of the U.S. market.

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. His new book Deal With It: The Trades That Stunned The NHL And Changed hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via brucedowbigginbooks.ca.

BRUCE DOWBIGGIN Award-winning Author and Broadcaster Bruce Dowbiggin's career is unmatched in Canada for its diversity and breadth of experience . He is currently the editor and publisher of Not The Public Broadcaster website and is also a contributor to SiriusXM Canada Talks. His new book Cap In Hand was released in the fall of 2018. Bruce's career has included successful stints in television, radio and print. A two-time winner of the Gemini Award as Canada's top television sports broadcaster for his work with CBC-TV, Mr. Dowbiggin is also the best-selling author of "Money Players" (finalist for the 2004 National Business Book Award) and two new books-- Ice Storm: The Rise and Fall of the Greatest Vancouver Canucks Team Ever for Greystone Press and Grant Fuhr: Portrait of a Champion for Random House. His ground-breaking investigations into the life and times of Alan Eagleson led to his selection as the winner of the Gemini for Canada's top sportscaster in 1993 and again in 1996. This work earned him the reputation as one of Canada's top investigative journalists in any field. He was a featured columnist for the Calgary Herald (1998-2009) and the Globe & Mail (2009-2013) where his incisive style and wit on sports media and business won him many readers.

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Bruce Dowbiggin

Mamas, Don’t Let Your Babies Grow Up To Be Running Backs (Pt.2)

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We were watching the NFL on U.S. Thanksgiving Day with a posse of passionate Detroit Lions fans. In between their efforts to convince us to return as Lions fans after our nasty divorce with the team a few years ago, they excitedly talked about the team’s dynamic running backs David Montgomery and Jahmyr Gibbs.

Montgomery is Thunder and Gibbs is Lightning as the Lions head toward what might be their first Super Bowl appearance. Ever. As in, not a sniff of a title since they played the NFL championship game in 1957. But we digress. Montgomery, who has 11 TDs, is signed at a comfortable $5.056 M per year on a two-year contract. Gibbs, who has 10 TDs, is on the second year of his rookie deal that averages $4,461,283 a year.

Naturally, the Lions fans want Gibbs signed to a deal so they don’t lose him when he’s a free agent in 2027. But here’s where it gets tricky. In a previous NFL, when RBs were prime attractions, Gibbs would be among the NFL’s top money earners when he’s free to take offers. It doesn’t work that way anymore. The days of Walter Payton and Barry Sanders are over. Even with a slight resurgence in the NFL’s running game in 2024 RBs are still values as penny stocks.

Last July we looked at the reality of two star backs coming off rookie deals. “Las Vegas Raiders RB Josh Jacobs looked at the reality of being a running back in today’s NFL and caught the 6 AM flight out of Vegas. New York Giants RB Saquon Barkley looked at the reality of being a running back in today’s NFL and signed a one-year deal for $10.1 million. The incentives in the deal will be very challenging for Barkley. He said he had an “epiphany”. Or maybe a chat with his banker. 

Same situation. Different response. As players coming off their rookie-capped contracts both Jacobs and Barkley found a market that valued running backs just above place kickers on the economic totem pole. Prone to injury and undercut by a steady stream of star running backs emerging from the Draft, veteran running backs across the league now found themselves squeezed on short-term deals for what constitutes pocket change for quarterbacks.”

In the offseason Barkley ditched the Giants for a three-year deal with the Eagles that earns him $13 M with a lowly $3.8 M cap hit. The man who could well be the NFL MVP is 13th on the Eagles salary cap, squeezed between Milton Williams and kicker Jake Elliott. He’s hoping this breakthrough season will recoup the money the Giants declined to pay him coming off is rookie deal.

Jacobs, meanwhile, has become the Green Bay Packers MVOP playing for $ 12 M in the first year of a four-season contract. But the two of them are small fry next to QB Patrick Mahomes’ $450 M contract, Joe Burrows’ and Trevor Lawrence’s $275 M deal or Deshaun Watson’s guaranteed $230 M to stink it up in Cleveland. To say nothing of the $140.6 M going to Tampa Bay’s LT Tristan Wirfs or the $140 M deals for WRs Davante Adams of TB and Minnesota’s Justin Jefferson. How come?

It is, of course, all a matter of sports caponomics . (For more on the evolution of salary caps in sports leagues read our book Cap In Hand: How Salary Caps are Killing Pro Sports and Why the Free Market Could Save Them. brucedowbigginbooks.ca)

Scarcity drives value, and the most scarce commodity is not excellent running backs. It’s excellent quarterbacks. Scarcity is why left offensive tackles make more than guards and centres. It’s why cornerbacks make more than middle linebackers. It’s why these positions are drafted in the first round while running backs and others slide to the later rounds. Gibbs’ first-round selection by Detroit was widely seen as too early for the position and, thus, a cap mistake.

As we remarked in Cap In Hand, the NFL knew it was a two-tier league back in 1987 when it busted a strike by the NFL Players Association for free agency. “There had been no new CBA since the 1982 agreement expired in 1987. To drain the NFLPA’s bank account, the NFL had previously created a “Quarterback Club” marketing arm separate from other players. While the league’s top QBs and select others were handsomely compensated with bonuses and percentages of sales, the move denied significant marketing revenues to the rest of the players and the union.”

End of strike. You’d think that with agents advising RBs and the market establishing value running backs would put pride aside. Nah. Running back Le’Veon Bell described the process when he turned down guaranteed wealth in Pittsburgh in 2022. “My franchise tag was $14.5M, and I walked away from it,Bell said on the AP Pro Football Podcast. “It’s a respect thing. You told me you were going to do this for me but you didn’t… I could’ve just ignored it, went inside the locker room and had been playing. 

“But that wouldn’t have made me happy, and I’m sure inside the locker room, everybody would’ve felt it, and, as a team, we wouldn’t have been good. I feel that’s the same with Saquon. He’s trying to be the best he can, but obviously deep down, he’s not happy, because he wanted to be compensated. He still wants his teammates to be good, so he showed up.”

Bell’s own gamble didn’t work out, as he’s drifted from the Jets to the Ravens to the Buccaneers. Now he’s training to be a boxer. From leading man to bit player. He’ll never make up the money he’s lost by choosing to be a glamourous-but-unappreciated RB. But ask yourself, at what other position in what other league would the three best players at a single position be allowed to switch team from 2023-24?.

That’s what happened last winter when top candidates for 2024 OPOY— Barkley, Jacobs and Derrick Henry— all departed their former teams for slightly better paydays on the Eagles, Packers and Ravens. Doesn’t seem to make sense. Till you see 49ers star RB Christian McCaffrey injured again Sunday night in Buffalo with a PCL tear. Then you understand why teams are unwilling to take a longterm gamble on the man carrying the rock.

And why we’ll stay fans of the Buffalo Bills and their QB $258 Million QB Josh Allen for the time being.

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. His new book Deal With It: The Trades That Stunned The NHL And Changed hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via brucedowbigginbooks.ca.

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Bruce Dowbiggin

Climate & Covid: How The Certainty of Elites Destroyed A Decade

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It probably wasn’t meant as an epitaph for the years since 2008, but a speech from the recent movie Conclave might serve all the same. In the film, a British Cardinal Lawrence (Ralph Fiennes) must be deacon to the Conclave electing a new pope. He is hesitant to accept the responsibility in times of intolerance. His homily explains why.

“Certainty is the great enemy of unity. Certainty is the deadly enemy of tolerance. .. If there were only certainty and no doubt there would be no mystery. And therefore no need for faith. Let us pray God will find us a pope who doubts.” (Spoiler alerts forbid further plot developments.)

Cardinal Lawrence might well have been describing the deadening effects of certainty since the election of Barack Obama (2008) and Justin Trudeau (2015). Under the guise of enlightenment Obama and then Trudeau have employed certainty as a battering ram. Those who expressed doubt were eliminated. Those bending a knee were spared— for now. Those at the top got great Taylor Swift tickets.

While artfully claiming disinformation/ misinformation as dire threats to humanity they used censorship to eliminate opposing views to their radical progressive agendas. The two most prominent of those agendas were, of course, the toxic twins of Climate and Covid.

While the global warming… oops, climate-change hustle had been around for some time it was only under the auspices of Obama and then Trudeau that it gained its ability to punish dissent. Who can forget Obama’s sneering admonition to doubters that 97 percent of scientists were onside with Al Gore and Greta Thunberg because The Science Was Settled? This was certainty on steroids.

In short order, newspapers banned letters to the editor disputing the manipulative programs of the UN and the IPCC (among the many drawing hundreds of millions in public funds). Opposing climate voices disappeared from CBC television panels. To dispute controversial claims was an invitation to disastrous law fare, as Canadian journalist Mark Steyn discovered. Our piece The Right To Criticize Climate Change Has Cost Mark Steyn Almost Everything highlights the decade-plus ordeal he suffered in D.C. courts for pointing out the fraudulence of Michael Mann’s hockey-stick oeuvre.

All for disputing the certainty of the science behind a global scheme to move billions from the first world to developing nations. (Which is then reportedly laundered back to the U.S.) Were Steyn’s case an exception we might grant his oppressors leeway. But the certainty principal of Obama and Trudeau on climate cost thousands of scientists their livelihoods, bankrupted others and blackened their life’s work. To no effect on climate itself.

In Canada, Trudeau named a convicted criminal and ruthless zealot as his climate minister. Steven Guilbeault took certainty to its illogical end, dragging the faculty lounge of idiots in Trudeau’s cabinet along with him. Again, career scientists and researchers were crushed by his onslaught of a useless carbon tax, EV mandates and ridiculous bans on workable solutions such as nuclear. Dispute was fruitless. They were that certain of their holiness.

But climate certainty was simply the appetizer for the banquet of Covid. Here both Trudeau and Obama (and his successors in the the U.S. health industry) wielded certainty into a script that not even Hollywood would have considered plausible in 2000.

Most now recall the Rod Serling scenario of an engineered Chinese virus somehow wiping out civilization. This plot was employed to suspend everyday activity and lock the population in their homes across much of the West and Asia. (Surprisingly Africa declined the invitation to insanity and survived nicely, thank you.)

Lock downs, masks, distancing, surface wiping, police raids, government bans— all were the poisoned fruit employed by bureaucrats and fanatics in service of their certainty. Everyone has their pained memory of overreach, from arresting surfers on the beach to locking arriving Canadian travellers into hotels to seniors dying alone in quarantined wards.

Citing the worthlessness of masks was always accompanied with the admonition that defying the new normal was a fatal threat to someone’s grandmother. It is a truism that people cannot remember the pain of dental extraction or childbirth. But the dystopian effects of Covid are likely to be carried to the grave by young people isolated from schools and grieving citizens denied a final farewell to parents.

While authorities sought to keep their grip, certainty finally began to erode. It was revealed that six-foot distancing was an invented standard, masks were useless in stopping the spread of the virus and the avalanche of positive tests were largely false positives and unlikely to make anyone sick. Soon Covid humour became accepted. Compliance was mocked. Citizens chucked the mask and re-started life.

Those certain in their power recoiled at the insubordination. Armin Rosen noted their stunned disbelief in Tablet, “Perhaps the higher levels of the American media complex, masquerading in the clothing of a different century, should embrace their essentially patrician urges and accept their permanent bafflement at the inscrutable, inexplicable passions of the American polity, thus exempting themselves from any deep concern about what the rest of us are up to.”

Donald Trump’s call to reject those who’d prospered in Covid found willing ears in the United States. His resounding sweep in the 2024 elections— every state in the union moved rightward in voting—  was the final rebuke to those who preached certainty. The same people who sloughed off not one, but two assassination attempts on a presidential candidate as mere distractions.

It remains to be seen whether docile Canadians, always deferring to authority first, will shake off the certainty crowd in the next federal election. The Liberals are still hoping they can fool them with the Pierre Poilievre-as-Trump-as-Hitler narrative, a scare tactic that failed miserably down south. (One recent poll shows the Conservatives winning 240 seats, the Liberals with 19.)

Cardinal Lawrence’s appeal in Conclave to a higher purpose than certainty should be a stake in the heart of those who’ve oppressed their families and neighbours to no perceptible gain. The Trump comeback signals an opportunity with RFK Jr. and Elon Musk for a revival of healthy debate and skepticism. Whether it holds and prospers is still uncertain. But we have learned that uncertainty is a thing to be wished for.

Bruce Dowbiggin @dowbboy is the editor of Not The Public Broadcaster  A two-time winner of the Gemini Award as Canada’s top television sports broadcaster, he’s a regular contributor to Sirius XM Canada Talks Ch. 167. His new book Deal With It: The Trades That Stunned The NHL And Changed hockey is now available on Amazon. Inexact Science: The Six Most Compelling Draft Years In NHL History, his previous book with his son Evan, was voted the seventh-best professional hockey book of all time by bookauthority.org . His 2004 book Money Players was voted sixth best on the same list, and is available via brucedowbigginbooks.ca.

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