Gary Bettman and the NHL Officially Take Action to End Tax Disadvantages After New Findings

NHL Commissioner Gary Bettman and the league are changing the signing bonus structure in the next CBA to finally combat tax disadvantages for some teams, as discovered by The Athletic.

The Florida Panthers have aggressively utilized signing bonuses in the last five years to take advantage of the no state income tax benefit.

They signed 10 deals with a cap hit in excess of $5 million, and eight of them had at least 80% of the funds paid as signing bonuses.

There are six total teams that have no state income tax

In comparison, the remaining five no-tax NHL clubs collectively have inked 39 such deals, but just two of them (Victor Hedman and Jake Guentzel) reached the 80% threshold.

Just five others even broke the 50% threshold, with Mitch Marner at 62.5% headlining the remainder. Together, Florida has paid out $420 million in signing bonuses in these gargantuan contracts, an astonishing 81% of the total cost of the contracts.

The other five no-tax teams collectively have spent $515 million altogether, but only 30% of that is through bonuses.

The Kraken, however, have collectively spent only $27 million in signing bonuses, an amount Florida has individually exceeded for seven players.

This is how the Panthers have surpassed other no-tax teams like Vegas and outwitted cap-intelligent rivals like Colorado.

That edge is being brought back in check now by the NHL's future CBA, one that will cap signing bonuses at 60% of a contract's value.

'It's also something that the next CBA is addressing by limiting signing bonuses to 60 percent of a player's cap hit. For those hoping for the tax advantage to be addressed by the league, the NHL did actually do something about it (to an extent). It will still exist, but likely not to the same degree.'

- Dom Luszczyszyn