Hockey's Business and Legal

Hockey’s Business and Legal Bi-Monthly Highlights July 16 Through July 31 Featuring More Troubles for Alex Galchenyuk

Alec Roberson

It’s that time of the month when we take a look at what’s been happening in hockey’s business and legal world. Twice a month we cover the big and not so big stories in this arena. We also include a featured story of the period. Let’s take a look at what has been happening this period.

Hockey’s Business and Legal News

Nike Ends Partnership with Hockey Canada

In hockey’s business and legal highlights last period, following Hockey Canada’s instillation of new leader Katherine Henderson, Bauer reinstated its sponsorship of Hockey Canada. However, Nike decided a different path. After the revelations related to Hockey Canada’s handling of sexual assault allegations were release, Nike, the over twenty-year partner with Hockey Canada, paused its partnership. It now announced that the pause has turned into a permanent termination.

While Nike made the decision and is looking to separate itself seemingly for reputational reasons, Hockey Canada may use this as part of their own reputational rebuild. Nike has also been under some fire for certain actions in the last few years. Meanwhile, Nike may also see this as an opportunity to slowly get out of hockey. Nike owned Bauer until 2008. Like Reebok, they may be looking at moving away from hockey to focus on other sports. This move affects both hockey’s business and legal landscapes. Regardless, this is another shakeup in Hockey Canada to keep an eye on.

Erik Johnson and Gabriel Landeskog Join Ownership of Leeds United

Following a trend of athletes investing in other sports, Colorado Avalanche captain Gabriel Landeskog and former Avalanche, now Buffalo Sabres, defenseman Erik Johnson have joined Big League Advantage in purchasing English soccer club Leeds United FC. It is common to see athletes invest in ownership of other teams in different sports. Just last period we saw Tim Tebow investing in an ECHL team. Even though the athlete owners are not usually the deepest pockets in the groups, they provide the team with “high profile” ownership that can help in exposure and publicity.

As competitive athletes, keeping that passion to win translates into sports ownership as both a potential revenue source and involvement in sport after retirement. While this could be a good move for Johnson and Landeskog, the U.S. Supreme Court’s ultimate decision in Moore v. U.S. related to taxing unrealized gains on foreign investments may become closely intertwined with this deal.

Martin Kaut Claims AHL Coach Forced Him to Fight

Martin Kaut left the San Jose Sharks organization this summer and signed in his native Czech league. While it may not be the only reason he left, Kaut claimed a coach with the San Jose Barracuda, the Sharks AHL team, told him to fight certain players during the game. Kaut was a former first-round selection of the Colorado Avalanche. They later traded him to the Sharks. While historically, it was not uncommon to hear stories of players being “asked” to fight, Kaut is not really a fighter. As a 16th overall pick, Kaut should be more of a potential offensive threat that has just taken some time to develop. Kaut’s allegations also include that the coach told him that his refusal to fight is why he was not in the NHL. Meanwhile, the Sharks denied these allegations.

In the past, (assuming the allegations are true) this would not only be more accepted, but also commonplace. You have to pay your dues and sometimes that includes fighting. But now, with multiple concussion and abuse lawsuits and increasing pressure on the hockey community to make the sport safer, this more “old school” coaching might be losing its place in the game. This is becoming a big topic in hockey’s business and legal world. There may not be a specific rule against it now, but if these allegations keep progressing don’t be surprised to see something more formally change.

NHL and MVPindex Enter into Strategic Business Partnership

Ah, the digitally enhanced dasherboards (DED)….a success for the NHL but maybe not the most for the fans. DED debuted in the 2022-23 season. The NHL now announced it has partnered with MVPindex for the DED program. The idea was honestly pretty smart. The boards visible on television would display advertisements that were digitally placed there versus spectators at home seeing the advertisements permanently on the boards. This allows for bigger ads that can change while also being tailored to the location of the spectator or the network.

However, there were numerous glitches and hiccups with the DED that fans noticed when watching games. And sometimes, even if not a glitch, the advertisements were distracting due to their quickly changing nature. With that said, these should be issues that the NHL can fix. Where MVPindex will really provide value, however, is in its ability to monitor and assess the value of the advertisements shown through DED. Specifically, MVPindex has specialized asset-first detection technology to pick up and provide precise, true, and reliable media and brand values for a logo, slogan, and image on DED signage. This will allow the NHL to truly capitalize on this technology to maximize results and success. Hockey’s business is taking another step forward here with the changing times.

New NHLPA UNLMT Program Offers Guidance to NHL Players

On average, NHL players’ careers are short. In such a physical sport, even without serious injury, the wear and tear is a lot. For most, hockey has been their entire life. So, what happens when their career is over? There are almost endless opportunities for ex-players, but being intentional about it can be tough. Especially while focusing on hockey. To help players plan and prepare for a life after hockey, the NHLPA created the UNLMT program.

The program provides one-on-one assistance to players who wish to participate. Players can take part in assessments to figure out their interests and strengths. They then link with mentors to provide guidance. This program also provides specified courses and modules to help players develop. Some players have already taken advantage of this program including Lars Eller.

UVM Men’s Hockey Coach Fired for Inappropriate Text Messages

The University of Vermont fired men’s hockey coach Todd Woodcroft following an investigation into inappropriate text messages with a UVM student. Woodcroft, the brother of Edmonton Oilers head coach Jay Woodcroft, was under investigation for about four months for the alleged conduct. After someone filed a complaint with UVM’s Office of Affirmative Action and Equal Opportunity (AAEO) in March of this year, the investigation commenced. During that period, Vermont did not put Woodcroft on leave. He was, however, required to work away from campus and end all communication with any students involved. The day after the investigation’s conclusion, UVM let Woodcroft go.

It will be interesting to see how this situation plays out. UVM did not provide Woodcroft with any compensation subsequent to his firing. He and his attorney have denied the allegations and expressed disagreement with the entire process. Keep an eye on how this moves forward as Woodcroft may challenge the firing either administratively or in court. Regardless of that result, it is an important lesson to coaches out there to be very cognizant of their actions on and off the ice. While the text messages in question may turn out to be innocent, people in a places of leadership have to be very careful.

Internal NHLPA Issues

A former NHLPA employee argued in court in Canada on July 26, 2023 that the NHLPA should hand over all documents related to an alleged fraud scheme. The employee claims he was fired after failing to keep quiet about another NHLPA employee who was allegedly defrauding the organization. The employee, fired in 2019, specifically claims the NHLPA covered up the fraud and created a toxic work environment while also engaging in tax and insurance fraud. The NHLPA argues the claims are meritless as well as “scandalous and inflammatory.”

The alleged fraud covered up occurred when a former director of technology for the NHLPA used his own company to misappropriate money and purchase expensive computer equipment. Said former director was supposedly allowed to resign under previous NHLPA director Donald Fehr. The ex-employee filed the lawsuit in 2019. He claimed $4 million for general damages, $2.5 million in punitive damages, and future income loss and earning capacity additional damages. This may be a big battle for new NHLPA leader Marty Walsh.

Developments in the New Women’s Professional League

Since the takeover of the women’s Premier Hockey Federation (PHF), movement has been constant and quick in the development of a new league. However, much work needs to be done. In a new development, a job posting was made public looking for six general managers to lead teams in the new women’s league. Interestingly, no compensation was noted nor was the specific location for each role. None of the PHF’s previous general managers were retained as general managers post-acquisition so any of them may apply. But it is interesting to see the public posting and that location and compensation are not specified. If this league is to become the singular women’s league, good leadership will be paramount.

Meanwhile, many former PHF players have already signed in Europe versus waiting to see this new league shake out.

A New Junior A League in Western Canada

Under the Hockey Canada umbrella, the CHL is the premier level of junior hockey. Under that is Junior A. Arguably the top Junior A league in Canada was the BCHL. However, a few months ago the BCHL announced it was going to operate independently and no longer be under Hockey Canada. Now Hockey Canada and BC Hockey announced they are forming their own new Junior A league to play in western Canada.

This league is comprised of three current Junior B leagues. These include the Kootenay International Junior Hockey League (KIJHL), the Pacific Junior Hockey League (PJHL), and the Vancouver Island Junior Hockey League (VIJHL). The hope is that this new league will begin at a tier II Junior A level then progress to tier I. Ideally, this will provide another enhanced level of hockey opportunity for players across western Canada and beyond.

NHL KHL Relations TBD: Ivan Fedotov’s Contract

As last period’s hockey’s business and legal highlights covered, the Philadelphia Flyers contract with Russian goaltender Ivan Fedotov is in limbo. The Flyers signed the goalie in May of 2022, but he was unable to play due to Russia requiring him to serve one year in the military. That one year of service ended in June this year. The Flyers and NHL requested from the IIHF that Fedotov’s contract be “tolled” for one year so that it would start this season versus last. This is not really new from last period. But the ongoing released information makes this a noteworthy story with huge implications.

However, the KHL felt he was not under contract since technically his one-year deal was up. CSKA signed the goalie to a two-year deal. The IIHF is currently considering this decision and will make a decision hopefully soon. This situation is impactful on many levels. The NHL suspended its memorandum of understanding (MOU) with the KHL following the situation in Ukraine. The previous MOU had anti-contract poaching language in it where each league would respect the other’s contracts. However, the MOU is not in place so technically speaking, there is no written agreement preventing this.

But if you look at this closer, even under the MOU, this also comes down to contract applicability interpretation and international law. This is where the IIHF steps in to ultimately make the decision. The leagues may could disregard the decision technically, but that would have negative consequences affecting international play and relations. Fedotov really just wants to get back to hockey and will likely respect the IIHF’s decision.

The Chicago Steel Have a New Owner

The Wirtz Corporation has picked up another hockey team to add to its portfolio. This time that team is the USHL’s Chicago Steel. The Wirtz Corporation is a real estate holding company headquartered in Chicago. Most notably, it owns the Chicago Blackhawks and partially owns the United Center. Both the Blackhawks and Chicago Bulls play there. They also own the AHL’s Rockford IceHogs. The Wirtz Corporation were led by Rocky Wirtz until his recent death.

Meanwhile, the Steel are arguably one of the most prominent USHL teams. Notable recent alumni include Owen Power and Adam Fantilli. Larry Robbins has owned the team for eight years and served as its CEO. However, he decided to pass the reins on to the Wirtz Corporation. The team will remain operations as normal with the new ownership group taking over immediately. Robbins will remain involved in advisory role. Like the purchase of an NHL team, the process for this type of sale takes league approval and additional I’s to dot and T’s to cross. This is a deal affecting hockey’s business and legal sides. With the new owner, the Steel enter into a new era and the Wirtz Corporation remains tied to hockey in Chicago.

Hockey’s Business and Legal Featured Stories: Alex Galchenyuk Enters NHL/NHLPA Player Assistance Program

In hockey’s business and legal highlights last period, we saw the Arizona Coyotes terminate Alex Galchenyuk’s contract only a few days after signing it due to off ice conduct. Specifically, the Scottsdale police stopped Galchenyuk due to disorderly conduct while he may have been under the influence. He continued to act noncompliant and made threatening remarks to the officers. Following that termination, Galchenyuk announced that he has entered the NHL/NHLPA Player Assistance Program (the “Program”).

The NHL and NHLPA established the Program over twenty years ago. This program assists players and their families who are going through mental health, substance abuse or other issues. The assistance includes counseling and other resources. If under contract, the players continue to get paid while in the program. Even though there is no set time limit for the program, players in the program cannot leave until cleared. Spencer Knight recently entered the program as well. Due to privacy concerns, and rightfully so, the specific reasons players enter the program, and the inner workings are not publicly disclosed.

Galchenyuk has had a hard time making much of an impact in the NHL even though he was top five draft pick. Maybe unrelated to these issues, but that can be hard on many players. It’s not where you are picked that guarantees success. However, getting picked that high can make it tough to deal with underperformance. Hopefully Galchenyuk can get the help he needs and find his way back to the NHL soon.

Hockey’s Business and Legal Featured Stories: More Galchenyuk Issues

In a matter unrelated to Glachenyuk’s exit from the Coyotes and entering into the NHLPA Player Assistance Program, the Royal Bank of Canada is suing him for repayment of a defaulted loan. The amount involved is around $400,000 CAD plus interest. This stems from a loan that Galchenyuk took out in 2014 while playing for the Montreal Canadiens. After serving Galchenyuk with a Notice of Forfeiture of the Benefit of the Term following multiple missed payments, the Royal Bank moved forward to file suit seeking repayment.

This is a tough time for Galchenyuk. It’s possible there has been more going on than meets the eye over the last few years. We see players run into financial trouble from time to time. Unfortunately, it can be tough for them to get out too. Evander Kane is one recent example that has had to deal with his own set of similar troubles. If the judgement is granted, the Royal Bank could potentially attempt to garnish Galchenyuk’s wages. However, he currently is not under contract so other remedial actions may be necessary. Hopefully the Player Assistance Program can guide Galchenyuk out and he can return to focusing on hockey. But this certainly throws another wrench in Galchenyuk’s story right now.

Post image attribution: By Lisa Gansky from New York, NY, USA, CC BY-SA 2.0 https://creativecommons.org/licenses/by-sa/2.0, via Wikimedia Commons

Alec Roberson

Alec Roberson grew up in coastal North Carolina, taking a somewhat unconventional path to hockey. With hockey being almost nonexistent in that area, Alec found his passion for the game following the success of the Carolina Hurricanes in 2001 and 2006 and later played club hockey in college. After going through law school and practicing for some time, he now continues his love for the game through writing. Find him on twitter @roberson_alec

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