Hockey's business and legal highlights July 1 through 15

Hockey’s Business and Legal Bi-Monthly Highlights July 1 Through July 15 Featuring Tim Tebow and the ECHL in Lake Tahoe

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

Katherine Henderson Hired as CEO and President of Hockey Canada

Following the fallout involving Hockey Canada’s handling of sexual assault incidents and an extensive search for a new president and CEO, Hockey Canada’s search committee announced that Katherine Henderson would be taking over in those roles. Her work will begin on September 4, 2023 and she will take part in the Beyond the Boards Summitt in Calgary. Henderson spent the last seven years as CEO of Curling Canada and the elected co-chair of the Winter Caucus of Sport (Canadian Winter Olympic and Paralympic Sports). With Curling Canada, she was instrumental in advancing pay equity between men and women and leading other initiatives to enhance diversity and exposure in the sport. For such actions, she was awarded an International Olympic Committee Diploma in 2022.

Hockey Canada should be in store for a new era as Henderson looks to move the organization and the sport further. Notably, Bauer Hockey immediately reinstated its sponsorship of Hockey Canada following the announcement of Henderson’s appointment. As far as hockey’s business and legal news, this is a big step forward for Hockey Canada regaining its name. But Hockey Canada will certainly need more work moving forward.

Moore v. U.S. Could Implicate Hockey Players

The United States Supreme Court agreed to hear the case of Moore v. U.S. This case concerns the 16th Amendment to the U.S. Constitution and specifically the constitutionality of the IRS taxing unrealized gains in significant investments in foreign corporations. At first this doesn’t seem directly tied to hockey’s business or legal issues. However, with many NHL and other professional hockey players becoming more heavily involved in investing in foreign corporations, including foreign sports teams, the outcome of this case may lead to some unfortunate tax consequences. Stay tuned.

Hockey Diversity Alliance Updates and Response to NHL/NHLPA Player Inclusion Coalition

Last period in our hockey’s business and legal highlights, we discussed NHL/NHLPA’s Player Inclusion Coalition to combat racism and promote diversity in hockey. Following that announcement, the Hockey Diversity Alliance had the following to say:

While both groups are aiming to achieve similar goals, the Hockey Diversity Alliance clearly felt a little hurt and frankly skeptical of the NHL’s actions. They explained (above) how they too approached the NHL for support and funding but were denied. Ultimately, the two groups should be able to operate simultaneously, but it does feel like an unnecessary splitting of resources. The Hockey Diversity Alliance also appears to be skeptical of the NHL’s involvement, claiming that the NHL doesn’t really have an interest in partnering in such a cause. They claim the NHL wants to control the process closely instead of partnering with an established organization. Hopefully this divide will not negatively affect the work these groups could do.

Meanwhile, Evander Kane announced his exodus from the Hockey Diversity Alliance. He specifically stated that he believed some involved were pushing individual agendas. He also provided that he did not support the “combative position” that the group appeared to be taking towards other like-minded organizations.

Connor Bedard Endorsements

Without even putting on an NHL jersey yet, the 2023 first overall draft pick Connor Bedard already has endorsement deals. These include sports supplement and drink company Biosteel, clothing company Lulemon and most recently, Hyundai. For a young kid with big expectations, these deals set him up for the near future and beyond. There are certainly horror stories in all sports about young athletes blowing money or even friends/family/advisors taking advantage of them. However, with the right people in his corner, this can be a big opportunity for Bedard.

Meanwhile, with Bedard potentially being a generational talent in the same conversation as Sidney Crosby and Connor McDavid, swooping the player up to an endorsement deal can be a more than worthwhile gamble. These hockey business deals are in addition to any hockey specific endorsements he has. I’d expect more deals coming down the pipeline for Bedard.

The NHL’s Support for the PWHPA

Last period in our hockey’s business and legal highlights we discussed how the group funding the PWHPA had acquired the PHF and the impacts it could have on women’s hockey. While there are rightfully a lot of qualms about how this takeover is unfolding, specifically its impact on former PHF players, teams and employees, this does seemingly create a singular women’s professional hockey league.

Even though all three groups met to discuss potential NHL support in 2022, no dialogue has occurred since. Specifically, Gary Bettman wanted to wait until there was a singular women’s league before offering NHL support. It seems that time is now as the parties have resumed talks. It will be interesting to see how the NHL lends itself to this new league. The NBA helps support the WNBA and this arrangement could follow that path in many ways. Keep an eye out on this as the summer moves on.

The KHL Makes First Move Against its (Now Canceled) MOU with the NHL

Shortly after the conflict in Ukraine, the NHL announced it was cancelling its memorandum of understanding (MOU) with the Russian KHL. The NHL and KHL have a different relationship than most other leagues worldwide. There are no player transfer agreements between the leagues. The MOU largely provided that each league would honor the contracts of the other league. Under other player transfer agreements, there are arrangements where players can join the NHL while under foreign contract in exchange for some consideration. This does not exist for NHL/KHL arrangements.

Even though the NHL canceled the MOU, both sides had generally been respecting the terms of it in practice….until now. The Philadelphia Flyers signed Russian goalie Ivan Fedotov in 2022. However, he had another year of military service to fulfill. With the Flyers anticipating his arrival, HC CSKA of the KHL signed the goalie to a two-year deal.

This is the first time either side has disregarded the NHL/KHL MOU in practice. Each of the KHL, NHL and IIHF are looking to settle it. While it is possible there was nothing done incorrectly “by the book”, this could have lasting impacts on the relationship between the leagues. For example, there are many NHL prospects under a KHL contract unable to cross the pond due to honoring the MOU. One example is Alexander Nikishin of the Carolina Hurricanes. But could these actions change this?

Additionally, reports provide that the KHL may impose punishment on players who leave the league to go play in the NHL. The NHL/KHL relationship is fairly rocky right now. The way this plays out could be telling on how that relationship continues to develop.

The NHL Gets into the NFT Game

While other leagues, teams and players have ventured into the world of non-fungible tokens (NFTs), the NHL finally decided to release two of its own. This came after a pretty long delay following the others. NFTs are essentially a mix between a trading card and cryptocurrency. NFT values can range from nominal to thousands of dollars. The licensor of the NFT can continue to collect royalties every time it is resold and could be a reason the NHL decided to jump into this game. However, it is somewhat strange to see the NHL jump into this at a time when both cryptocurrency and NFTs have lost lots of popularity. Will this result in a big payoff for the NHL? Only time will tell.

NHL/NHLPA Join with Jimmy V Foundation

The NHL and NHLPA announced that they joined with the Jimmy V Foundation to combat cancer. This is part of the NHL/NHLPA 25-year initiative entitled Hockey Fights Cancer. This unprecedented collaboration should allow for the success and power of both organizations to combine to not only raise as much money as possible, but also ensure the practice of the best cancer research. The NHL and NHLPA see this as a big opportunity moving forward. More details will be released later on this but expect to see much from this in November when the NHL hosts Hockey Fights Cancer month.

Arizona Coyotes Terminate Alex Galchenyuk’s Contract Due to Material Breach

The Arizona Coyotes signed free agent forward Alex Galchenyuk on July 1 this offseason. Only 12 days later, they put him on unconditional waivers with the goal of cutting him loose. A day later, they terminated the contract due to off-ice issues. Later reports by the Scottsdale Police Department showed these issues included charges for private property hit and run, disorderly conduct, failure to obey, resisting arrest and threatening or intimidating. Specifically, Galchenyuk made threatening remarks and racial slurs to police officers after being stopped due to disorderly conduct involving hitting property with his vehicle.

Following the incident, the Coyotes made the NHL aware of the situation and decided to move to terminate the contract following the path provided in the NHL CBA. While NHL Standard Players Contracts (SPCs) are typically guaranteed, the team may terminate it following a “material breach of the terms of the SPC.”

Paragraph 14 of the SPC provides that the team may terminate the SPC upon written notice to the player (but only after obtaining waivers from all other teams) if the player shall fail, refuse, or neglect to obey the team’s rules governing training and conduct of players, if such failure, refusal or neglect should constitute a material breach of the SPC. Neither the SPC nor the CBA indicate clearly what a material breach is, but there are some situations more obvious than others. Essentially all “questionable cases” have resulted in settlements. This includes the Tampa Bay Lightning terminating a player’s contract for being out of shape. However, this case seems more likely to hold. The NHLPA will have 60 days from the date of the termination to file a grievance challenging this decision.

A New ECHL Team in Lake Tahoe

Our featured hockey’s business and legal story looks at a brand new ECHL team in Lake Tahoe. Much like a new NHL expansion, ECHL expansion requires many steps. Notably, this expansion takes place around two years after the NHL’s outdoor game in Lake Tahoe between the Colorado Avalanche and the Vegas Golden Knights. Even more notably, David Hodges (chairman and CEO of Hodges Management Group and founder/owner of 925 partners) and former college football standout Tim Tebow will co-own this team. This is Tebow’s third investment in an ECHL franchise as he owns minority interests in the Savannah Ghost Pirates and Jacksonville Iceman. Zawyer Sports & Entertainment will manage and operate the team.

The new team will be the 29th ECHL franchise and will play at the new Tahoe Blue Event Center. This could be a big boost to an already busy, tourist driven area bolstered largely by skiing and casinos. With no other sports team in the immediate area, this team could be hockey’s business boost in the region. It should draw both people living in and visiting the area. Even though it is not legally required to have an AHL or NHL affiliation, don’t be surprised to see one announced. Reportedly, that announcement should come in February 2024 with the team beginning play in the 2024-25 season.

Post image attribution: By Sports Spectrum, CC BY-SA 4.0 https://creativecommons.org/licenses/by-sa/4.0, 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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