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Gainey's Handicap
Gainey's Handicap(2007-08-07 21:35 posted by T.C. Denault)

In the past few weeks much has been made of the Montreal Canadiens inability to lure big name free agents into the fold. Much of the blame for this failure has fallen squarely at the feet of Canadiens general manager, Bob Gainey.

Such is the nature of the beast in Montreal, and no one is more aware of this than Gainey. When big name free agents, Daniel Briere and Ryan Smyth decided to sign with other teams, fans and the media couldnít hide their disappointment.

But are these ďfailuresĒ really Gaineyís fault? After all didnít he offer both Briere and Smyth long term contracts worth in and around $7 million dollars per season? Is it fair to blame Gainey, when Smyth took a salary that was less than Montrealís offer?

Or was it?

In listening to the media or browsing through the internet, one would thing that signing free agents should be a piece of cake for Gainey. All he has to do is offer up the contracts and the players (especially those from Quebec) will flock to Montreal. After all, no other team possesses the history and the tradition of the Canadiens. And isnít it the dream of every young Quebecois to lace up the skates for the bleu, blanc, et rouge?

Unfortunately, this is no longer the reality for Bob Gainey.

Like other general mangers in the NHL, Gainey faces obstacles in building his ideal team. With the advent of the salary cap, hard decisions must be made. Each team only has a certain amount of money to spend. For those fans that miss the Habs glory days, it must be remembered that in the present day NHL, there will never again be a team like the 1977 Canadiens. A team that talented could never be kept together using todayís salary cap. A general manager must work inside a budget, a budget that precludes wild spending sprees and the mass buying of top talent.

However, Gainey and the Canadiens also face additional obstacles that other teams do not. And it is these obstacles that are the reason for Gaineyís failure to lure high priced free agents to Montreal. And for Gainey, it is a series of handicaps, ones that he must succeed in spite of.

Handicap #1 The Taxes

If one were to look at the main reason behind the Canadiens inability to sign marquee free agents, it would definitely revolve around the tax situation in the province of Quebec. There is nowhere else where the Canadiens suffer such a profound competitive disadvantage. When a player chooses to play for the Canadiens, he also chooses to have the highest amount of taxes subtracted from his pay. With a combined 48% tax rate (federal and provincial), Montreal is the city with the highest taxes in the entire NHL. By way of comparison, Edmonton and Calgary operate in a province with a combined tax rate of 39%.

To illustrate how big this difference can be weíll use the following example.

Player A is offered a one year contract for $7 million dollars by the Canadiens. The Calgary Flames offer the same contract to Player A. On the surface the contracts look identical. And while they would be regarded as identical in counting towards their teamís salary cap, they are much more different when you scratch below the surface.

If Player A chose to play in Montreal his take home pay at the end of the year would be $3,640,000. If Player A however, chose to play in Calgary his pay at the end of the year after taxes would be $4,270,000, a difference in take home pay of $630,000 per year. Now factor in that Player A would like a five year contract. The difference between Montreal and Calgaryís offer over a five year duration would add up to and extra $3,150,000 if the player chose to play in Calgary.

As we can see the matching $7 million dollar offer doesnít really match at all. In order for the Canadiens to give Player A the same take home money that he would receive in Calgary, they would have to pay him $8,250,000 per season as opposed to Calgaryís $7,000,000. Of course, these would also be the numbers that count against the salary cap.

The handicap is more severe when comparing the Canadiens to the American franchises. Using the same example as before, Player A is offered a one year contract by the Dallas Stars at $7 million dollars per season, identical to the Canadiens offer. As weíve already stated before Player Aís take home pay with Montreal is $3,640,000, with Dallas his take home pay is $4,550,000, a difference of 910,000 per season.

Unfortunately, for the Canadiens the differences donít stop there.

In Quebec the tax rate starts at $120,000, in Texas it starts at $336,000. In addition there is more tax deductible options open to players residing in the United States. For example, mortgages are tax deductible in the U.S., but not in Canada. Also, if the player is married there are graduated tax breaks available.

But the biggest difference between playing for the Canadiens and an American team lies in the area of the signing bonus. When Daniel Briere signed his contract with Philadelphia a little over a month ago, it included a $5 million dollar signing bonus. If he had signed in Montreal, he would have been taxed on the full bonus, both federally and provincially. But by signing with the Flyers, he was able to avoid paying the state tax on the bonus. In America the individual states do not collect taxes on the signing bonus, only the federal government collects any kind of tax on the bonus.

Needless to say when it comes to taxes, Bob Gainey doesnít have many advantages over his counterparts. And even though this is the biggest hurdle facing the Canadiens as they try to lure the best players to Montreal, it is not the only one.

Handicap #2 The Language

For any non French speaking hockey player the thought of coming to play in Montreal brings into focus the language issue. If the player has a young family this issue can take on an even greater importance.

In Quebec all school aged children are required to attend French speaking schools, with a few exceptions (children who have been previously taught in English while attending a Canadian school, temporary residents of Quebec, or First Nations children). However, the child of a player from the United States is required to attend the French school. The option does exist for the child to be placed in an English speaking private school, but for many parents they would prefer to place their children in the public school system.

For many the thought of living in a place that has a foreign language can be an impediment, especially when all the other teams are located in English speaking cities.

Handicap #3 The Media

For many years the Montreal media has exerted a strong presence over the Canadiens. No other team in the NHL faces the scrutiny that the Canadiens do on a daily non stop basis. For some players the presence of the media alone is reason enough not to play in Montreal.

While many former Canadiens players have fond things to say about the team, the fans, and the city, these niceties do not extend to the media. All of this helps contribute to Montreal being considered a pressure cooker by many, and to the spread of many horror stories through the league. With this increased pressure and scrutiny it becomes a reason for some to avoid signing with the Canadiens, and instead they go to another team where the atmosphere is more relaxed.

Ask yourself this, how much pressure is on newly signed St. Louis Blue Paul Kariya? Now how much pressure would be on Kariya if he had signed with the Canadiens?

Handicap #4 The Weather

This has strangely become a factor in recent times. As was proven recently with the Chris Pronger fiasco, if given the choice some players and their families would rather spend their winterís in a warm climate like Anaheim as opposed to Edmonton. Their definitely has been a trend towards the warmer climates.

In addition to the warmer climate, there is the added benefit of lower taxes (as opposed to Canada), and far less scrutiny and media attention when compared with most of the northern teams located in the Eastern time zone.

The biggest problem facing the Canadiens and general manager, Bob Gainey is that all of these various handicapís are beyond their control. Adding to the frustration is the fact that these problems donít figure to be going away any time soon.

Now youíll never hear any complaints from Bob Gainey. Itís not his style. Heíll take the blame from the fans and the media in silence. He knows that itís part of being in his position. And heíll continue to perform his duties.

However, these handicaps have formed Gaineyís long term plan for the Canadiens. Realizing these limitations, Gainey has built the program around building through youth. By drafting wisely and developing young talent, Gainey has chosen to build from within, so that the Canadiens arenít reliant on trying to compete for high priced free agents with other franchises.

By developing his own stars from within, Gainey knows he can increase his chances of resigning these players (for example, Andrei Markov) because they will become familiar with all the great things the Canadiens and by extension Montreal can offer.

How this will work out is a question to be answered in the future. And maybe that is Gainey biggest handicap, the impatience of all the fans.

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