No tax: Daly doesn’t envision change to NHL system that benefits sunbelt teams

Bill Daly says the conversations have taken place.

The NHL’s deputy commissioner, however, doesn’t see a realistic path forward to fix the perceived issue any time soon.

Four of the league’s last five Stanley Cup winners, and seven of the last 10 finalists, play in U.S. jurisdictions without state income tax.

That supposed advantage when attracting free agents, and what might be done to even the playing field for other markets, has become a talking point around hockey.

But Daly believes the complexity of any potential changes aren’t unfeasible — at least for now.

“There are just too many variables to really control all of them,” he said Tuesday at the NHL/NHLPA player media tour’s North American leg.

Florida, Nevada, Tennessee, Texas and Washington are among the states that don’t have taxes on income. That could mean the difference of millions of dollars over the life of a player’s contract.

The Florida Panthers won their first Stanley Cup in June, a title that came on the heels of the Vegas Golden Knights’ breakthrough. The Tampa Bay Lightning, meanwhile, made three straight finals, including victories in 2020 and 2021.

“It’s something that comes up,” Panthers winger Sam Reinhart, who signed an eight-year, US$69-million contract to stay in Florida on July 1, said of maximizing tax situations. “It’s things you balance. It just so happens that it’s tax-free, and one of the better places to play.”

“Those are all factors.”

Daly said a lower salary cap for teams playing in states without income tax is unlikely under the current collective bargaining agreement because of potential pitfalls related to trades or recalls from the minors.

NHL commissioner Gary Bettman’s right-hand man added he has ideas on the issue, but declined to share those with reporters gathered at the swanky Encore hotel on the Las Vegas strip.

“If we have the next ten years similar to the last five, then maybe it’s something that needs to be addressed,” Daly said of the success of tax-free teams. “But at this stage, I’m not really running to get there.”

He’s also aware the topic is getting increased attention in the league’s seven Canadian markets.

“We always look for ways to make the system better,” Daly said. “I don’t have any obvious answers to it.”

Ottawa Senators centre Shane Pinto said it’s clear teams north of the border are at a disadvantage.

“They have to find a way to tweak it,” he said. “If you look at all these free agents, you don’t blame them for going down south. But I do think they have to find a way, especially for the Canadian teams … they’ve got to overpay guys to come to Canada every time, that messes up with the cap.

“It’d be nice to have an even playing field.”

Nashville Predators winger Filip Forsberg said every market has attractions and drawbacks.

“Taxes is certainly a part of it,” he said. “That does play quite a bit of difference on your salary … every place has its ups and downs, whether it’s living, housing prices, lifestyle — whatever you’re looking for.”

Daly said some markets with the highest U.S. tax rates, including New York and California, are desirable for different reasons.

“There’s so much that goes into the equation,” he said. “A lot of that has to do with team chemistry and how teams are constructed and how the player sees himself fitting into the team.”

Anaheim Ducks defenceman Radko Gudas signed in free agency two summers ago after three seasons with Florida, well-aware of the tax differences

“I don’t think the NHL should be stepping into tax problems,” he said. “If they want to change it, maybe we should change the playoff format, too.”

The Arizona Coyotes relocated to Utah in the spring after 28 years in the desert, but Daly remains convinced hockey can work in the Phoenix area.

“Gary and I like to joke that we’ve spent the last 20 years trying to preserve hockey in Arizona,” he said. “Ultimately, we were unsuccessful with this iteration.

“Doesn’t mean the next one won’t be successful.”

The upcoming NHL 4 Nations Face-Off tournament won’t include Russia because of the war in Ukraine.

The league plans to return to the Winter Games in 2026 after a 12-year absence, but Daly said a decision on Russia’s participation has already been made by the International Olympic Committee barring a “drastic” change in world events.

“The Summer Olympics, (the IOC) did not allow Russian team participation, unlike some of the other models that they’ve adopted in the past,” he said.

“I would expect that same rule will apply to the Winter Olympics in ’26.”

This report by The Canadian Press was first published Sept. 10, 2024.