CHL releases financial figures ... SPHL team in bus crash ... Phillips burns Oil Kings again

Possible CHL & its law firm take a different view re publicizing KPMG report, but here’s what judge’s Jan. 5 confidentiality order says: pic.twitter.com/muyO5aYhl1

— Rick Westhead (@rwesthead) January 20, 2017

While one WHL team had pre-tax net income of $9,074,157 from 2012 through 2016, another lost $6,278,354 from 2012 through 2015.

The figures are part of a summary of financial information prepared by KPMG and dated Dec. 22, 2016, as ordered by a Calgary judge last year. 

The Canadian Hockey League, the OHL and WHL are facing a potential class-action lawsuit in which more than 370 former and present major junior players are asking to be paid minimum wage and such things as holiday pay and overtime.

Teams were ordered by a Calgary judge to compile and submit financial information, including tax statements, from 2011 through 2016. Twenty WHL teams prepared the information through 2016, while two — the Portland Winterhawks and Prince George Cougars — filed through 2015. All of this was audited by KPMG, which also prepared affidavits for the court.

Teams in the report aren’t identified; rather, they are numbered 1 through 22.

Team 8 averaged a net pre-tax income of $1,814,831 for the five years, while Team 18 lost an average of $1,569,589 in the first four of those years.

According to a five-year summary, the WHL had 11 teams show a profit over that period, with the other 11 losing money.

Team 8 was far and away the most profitable of the teams, with Team 15 next in line, showing an average net income of $509,593 for the five years, boosted by a net income of $1,238,831 in 2016.

The report shows just how volatile the major junior market can be. For example, Team 11 claimed a net loss of $807,627 in 2013, a net income of $193,133 for 2014 and $849,128 for 2015. In 2016, that figure was $349,318. Meanwhile, Team 13 followed four straight profitable years with a loss of $890 for 2016.

Five of the 22 teams showed a profit in each of the five years, while three others lost money each year.

While Team 8 showed a seven-figure profit in four of the five years, only one other team had such a single-year profit. Team 15 showed a net income of $1,238,831 for 2016. 

The report shows that the WHL had five-year total revenues of $375,718,507, with operating expenses of $347,047,705, meaning that its five-year operating profit was $1,670,802.

Factoring in other income and expenses, defined by KPMG as “income and expenses resulting from transactions that are outside of regular operations,” the WHL as an entity showed a pre-tax loss of $1,065,792 over the period in question.

There are enough figures in all of this to choke a horse, but of interest . . . 

In 2012, each WHL team received $76,400 — a total of $1,680,800 — from the World Junior Championship that was held in Calgary and Edmonton.

In 2013, each WHL team received $148,913 — a total of $3,276,088 — from the Memorial Cup that was held in Saskatoon.

In 2015, each of the 22 teams got $43,043 — a total of $946,946 — from the WJC that was held in Montreal and Toronto.

In 2016, each team got $118,477 — a total of $2,606,494 — from the Memorial Cup that was held in Red Deer.

The report also shows that WHL teams have paid out $9,675,219 in education money over the five years, an annual average of $1,935,044. That includes $2,195,925 in 2016.

Interestingly, all of this information was turned over to the court after which TSN’s Rick Westhead reported that “the CHL has asked a judge to seal those records, which will be used to establish the profitability of the teams and major junior leagues.” The CHL issued a news release Thursday night that included all of the information.

That news release is right here.

It is believed that the parties are to appear in court in Calgary on Jan. 24.

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Special thanks to our @PWHBC who made the trip up to Prince George to support the boys! [cred: @PGCougars] pic.twitter.com/PG8xE48xpX

— Portland Winterhawks (@pdxwinterhawks) January 19, 2017

The Portland Winterhawks Booster Club is rolling this week with 43 members riding a bus as it follows the team on a four-game B.C. Division swing. Club members had a great time in Prince George on Tuesday and Wednesday nights, will be in Kamloops for a game tonight and in Kelowna on Saturday night. . . . Included on the trip is ‘Rowdy’ Ardyce Moore, who, according to Ted Clarke of the Prince George Citizen, “considers herself the troublemaker of the bunch.” Ardyce is 91 years of age and has been attending games since the Winterhawks relocated from Edmonton in 1976. . . . Clarke’s story is right here.

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The City of Nanaimo is expected to hold a referendum on March 11 that will involve the potential building of an events centre that will include a hockey arena. Before then, however, there are a lot of questions to be answered, including: Exactly what will be the referendum question?

Kendall Hanson of CHEK News has more right here.

Meanwhile, the BCHL’s Nanaimo Clippers are wondering what might be in their future. “We’re in a precarious situation,” David LeNeveu, who owns a piece o the franchise and is its president and governor, told Mario Annicchiarico of the Victoria Times Colonist. “Obviously, if a WHL team comes to Nanaimo, that could displace the Clippers. There’s been no decision made on that side. We’ve been working with the league to protect the league and protect ourselves and everyone involved, but there’s not much to say until March 11 happens. Everything is up in the air until that vote goes one way or another.”

That story is right here.

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G Brandon Jaeger of the SPHL’s Columbus Cottonmouths was in hospital being treated for what is believed to be a broken leg on Thursday night after the team bus rolled as it made its way to Peoria, Ill., for a Friday night game. . . . Jaeger, 26, is from Champlin, Minn., who played two seasons with the Wenatchee Wild when that franchise was in the NAHL. He is in his second season with the Cottonmouths. . . . Originally, all 24 people on board the bus were taken to hospital. That included Jerome Bechard, the general manager and head coach. Bechard, from Regina, played four seasons (1986-90) with the Moose Jaw Warriors. . . . Allan Dawlford of Smiths Station, Ala., the 74-year-old bus driver, also remains in hospital in fair condition. He is to be charged with failure to reduce speed in order to avoid a crash. . . . The Columbus roster includes at least two former WHLers — D Spencer Galbraith (Brandon, Lethbridge, Calgary, 2010-14) and D Petr Senkerik (Kootenay, Prince George, 2009-10). . . . David Eminian of the Peoria Journal Store has more right here.

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THURSDAY’S GAME:

At Edmonton, F Matt Phillips scored three times and F Tyler Soy had four assists as the Victoria Royals

MATT PHILLIPS

doubled the Oil Kings, 6-3. . . . Phillips, who has 32 goals, put up his fourth career hat trick. Three of those, including two this season, have come against Edmonton. . . . D Will Warm (7) gave Edmonton a 1-0 lead at 8:41 of the first period. . . . Phillips tied it, on a PP, at 12:16. . . . F Trey Fix-Wolansky scored his 13th goal, on a PP, at 15:07 to give the home side a 2-1 edge. . . . Victoria tied it when F Jack Walker scored No. 22, on a PP, at 16:48. . . . Edmonton went in front again at 1:57 of the second period when F Artyom Baltruk scored his second goal of the season. . . . D Chaz Reddekopp (8) pulled the Royals back into a tie, with a shorthanded score, at 5:38. . . . Phillips broke the tie at 17:33. . . . F Jared Dmytriw added insurance with his ninth goal, at 6:42 of the third period, and Phillips completed his hat trick at 15:07. . . . Soy drew the primary assist on each of Phillips’ goals and also set up Reddekopp’s shorthanded goal. . . . Victoria D Marsel Ibragimov had two assists, with Walker and Reddekopp adding one each. . . . Fix-Wolansky also had an assist. . . . G Griffen Outhouse stopped 18 shots for the Royals, while Edmonton’s Patrick Dea blocked 36. . . . Victoria was 2-8 on the PP; Edmonton was 1-4. . . . The Royals (25-18-4) have won three in a row. They hold down the Western Conference’s first wild-card spot and are two points behind the third-place Kelowna Rockets in the B.C. Division. . . . The Oil Kings (18-23-4) have lost six straight and are two points out of a playoff spot. . . . Announced attendance: 6,389.

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FRIDAY’S GAMES (all times local):

Victoria at Calgary, 7 p.m.

Seattle at Everett, 7:35 p.m.

Portland at Kamloops, 7 p.m.

Moose Jaw at Prince George, 7 p.m.

Prince Albert at Red Deer, 7 p.m.

Medicine Hat at Regina, 7 p.m.

Brandon at Saskatoon, 7:05 p.m.

Kootenay vs. Tri-City, at Kennewick, Wash., 7:05 p.m.

Kelowna at Vancouver, 7:30 p.m.

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The CHL is the umbrella under which the three major junior leagues — the OHL, QMJHL and WHL — operate.
You might expect then that they would operate with the same rules and regulations.
And while that is true in some areas — two European players per team, three 20-year-olds, etc. — it turns out that it isn’t when it comes to the area of player benefits.
In fact, you may be as surprised as I was to find out how much difference there can be.
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On Nov. 28, when the WHL disciplined the Portland Winterhawks for spending money on what it called “illegal benefits,” some people involved with QMJHL teams must have gone: “Whoa! What’s the big deal?”
To refresh our memories, the WHL fined the Winterhawks $200,000, suspended GM/head coach Mike Johnston for the remainder of the season, prohibited them from taking part in the first five rounds of the 2013 bantam draft, and took away first-round draft picks in 2014, 2015, 2016 and 2017.
The WHL was adamant that the sins of the Winterhawks didn’t include any thing to do with the illegal recruitment of players or education packages. There weren’t any payoffs to agents. There weren’t any under-the-table payments to players.
Instead, the Winterhawks were convicted of flying parents in to watch their sons play hockey, paying for some offseason workouts, and providing cell phones for team captains.
According to a source familiar with the situation, the Winterhawks, in committing those sins, spent $23,850 over a five-year.
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Meanwhile, in the QMJHL, it seems that there were some crazy things happening. And it all was perfectly legal and above board.
One agreement that has been making the rounds shows that one team ended up on the hook for potentially far more than $100,000 to one player who no longer is with that team and isn’t likely to play for it in 2013-14.
For starters, the education commitment to this one player works out to more than $100,000.
Here’s how part of the agreement reads:
“After the Player’s QMJHL career the Club will provide Educational Assistance to the Player in the amount of US$23,750 per year for four (4) years while the Player attends an accredited college or university on a full-time basis.
“Upon receiving official notification of the Player’s enrolment as a full-time student at an accredited university or college (the) Club will make payment of US$11,875 to the player. . . . These semi-annual payments by the Club will continue for four consecutive years while the player is a full-time university or college student. Total Educational Assistance will not exceed US$95,000.”
Under terms of the deal, the player has to begin his “full-time university or college studies no later than the year of his 23rd birthday.”
As well, the player forfeits all education assistance “if Player signs a contract with a National Hockey League Club.”
The QMJHL team also agreed to pay any educational costs incurred while the player was with the team.
“Such educational costs . . . shall be in addition to the US$95,000 payment for Post-QMJHL Educational costs stipulated in this Agreement,” the contract reads.
The WHL’s standard player agreement calls for a team to “pay or reimburse or cause to be paid . . . the player’s educational expenses to enroll in and attend a designated publicly funded post-secondary educational institution based on the assessment for a full-time student . . . including tuition fees, compulsory student fees and textbooks directly related to the Player’s course of study . . .”
Those educational expenses are believed to run about $5,000 per year in instances where a player has activated his education policy.
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As well, according to the agreement between the QMJHL team and the player in question, “The Club will provide US$3,000 per season to defray costs of Player’s family to travel to (the team’s city) during the time the Player is with the Club.”
There is nothing in the WHL’s standard player agreement covering such expenses. A player’s travel expenses incurred in reporting to the team and returning home at season’s end, and a return trip at Christmas, will be paid by his WHL team.
The WHL apparently has a set of rules and regulations in which it is stated that paying parental travel expenses is against the rules. However, the WHL has never shown those rules, regulations or bylaws to the media, despite repeated requests, especially from working media in the Portland area. (You may want to read this May 3 piece right here from Kerry Eggers of the Portland Tribune.)
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The QMJHL club also agreed to “provide to the Player an allowance of US$2,500 per season . . . to be used to defray the costs of the Player’s off-season conditioning.”
Again, there is nothing in the WHL standard player agreement covering off-season workout programs. Again, it apparently states in a different set of WHL rules that such payments aren’t allowed.
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While the agreeement between a QMJHL team and a player referred to earlier was legal and approved by the league office, all of that since has changed.
Three years ago, the QMJHL took a look at the situation regarding player benefits and chose to change whatever rules were in place.
According to QMJHL commissioner Gilles Courteau, teams now are able to offer a maximum of $10,000 per year in scholarship money.
“We made adjustments,” Courteau said Wednesday, “and since then a team is not allowed to give more than $10,000 per year on a scholarship package. That is what has been adopted.”
As well, a team is able to provide up to $5,000 per season to cover parental travel expenses should the money be needed.
Courteau explained: “We do give them a maximum of $5,000 per season . . . if a kid is playing in the Montreal area and his parents are living in the Montreal area, they won’t get anything. When we’re talking about travel, we’re talking about parents who have to travel a good distance and they have to stay overnight . . . we give them a maximum of $5,000 for travel expenses.”
Also, a QMJHL team now is able to provide a maximum of $1,500 in offseason training money if a player is in need of it.
“It’s not all of them,” Courteau said. “Just if a player needs to have some specific training . . . he can apply for offseason training to the team.”
In the case of the QMJHL, its office, under Courteau’s supervision, monitors all of this.
“Teams have to submit each and every player standard contract plus that special agreement has to be submitted to the league office for commissioner’s approval,” Courteau said.
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Asked about the specific contract that is referred to earlier in this piece, Courteau stated that it was not “a standard” agreement.
“It was a special case,” Courteau said. “It was an American player. For those American players, special scholarship packages were allowed for them.”
That isn’t the case now, though.
“That’s done,” Courteau said. “They have to go through the same rules as what we adopted three years ago.”
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CHL president David Branch, who also is the commissioner of the OHL, chose not to comment, referring questions to Courteau.
Branch, however, did allow that “each of the three leagues has different policies as relates to such matters.“
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One person who covers major junior hockey and whom I had occasion to come in contact with this week, offered this:
“One of my friends who used to be a QMJHL team media relations person asked me what Portland did . . . I can't even remember the particulars now, but basically everything I said (cell phones for players, plane tickets for parents) he said, ‘We did that, too.’
“And they never got busted.”

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