WHL says suit doesn't fit ... Pats get forward from Chiefs ... Benson recovered from surgery

F Justin Kelly (Prince Albert, Spokane, Saskatoon, 1997-2002) has signed a one-year extension with the Bietigheim Steelers (Germany, DEL2). Last season was an injury-plagued one for Kelly, who had five goals and 10 assists in 10 games. In the playoffs, he added four goals and 11 assists in 12 games. . . . 

F Radim Valchar (Portland, Lethbridge, 2007-10) has signed a two-year extension with Csíkszereda Miercurea-Ciuc (Romania, MOL Lisa). Last season, he had 14 goals and 13 assists in 24 games. He led his team in goals and was second in points.

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A Calgary judge has given the OK for a lawsuit against the WHL and its Canadian teams to go ahead as a class action.

At the same time, Court of Queen’s Bench Justice Robert Hall exempted the WHL’s five U.S. teams.

The lawsuit is asking that teams be required to pay minimum wages and other items such as overtime, back pay and vacation pay for former and present-day players who qualify and choose not to opt out.

The WHL quickly responded on Thursday by issuing a statement.

“This was a procedural decision only and makes no determination regarding the merits of the claim and, in particular, the status of WHL players,” WHL commissioner Ron Robison said in that statement. “The claim fundamentally misunderstands the nature of amateur sport, including major junior hockey. We believe players are not employees but amateur athletes, and we believe our case is strong.”

On Thursday, while certifying the lawsuit as a class action, Justice Hall outlined the eligibility requirements, which are dependent on age and geography.

From Justice Hall’s decision:

The B.C. class is open to “all players who were or are members of a WHL team owned and/or operated by one or more of the defendants located in B.C. at some point, commencing Oct. 30, 2012, and all players who were members of a team who were under the age of 19 on Oct. 30, 2012, but excluding any players who commenced played for a team on or after Feb. 15, 2016.”

The Alberta and Manitoba class may be joined by “all players who were or are members of a team owned and/or operated by one or more of the defendants in Alberta or Manitoba at some point, commencing Oct. 30, 2012 and ending April 18, 2017, and all players who were members of a team who were under the age of 18 on Oct. 30, 2012.”

The Saskatchewan class may be joined by “all players who were or are members of any team owned and/or operated by one or more of the defendants in Saskatchewan, commencing Oct. 30, 2012, and all players who were members of a team who were under the age of 18 on Oct. 30, 2012, but excluding any players who commenced playing for a team on or after April 29, 2014.”

At the same time, Justice Hall exempted the five U.S. teams that play in the WHL.

“I believe it would be inappropriate,” Justice Hall wrote, “for an Alberta court to tell Washington and Oregon how their law should be interpreted and applied in these circumstances. There are actions available in those states, applying their rules of procedure, some of which differ considerably from Canada and Alberta procedures; such as the fact that in Canada a class member is a plaintiff unless he or she opts out, whereas in their jurisdictions a class member is not a plaintiff unless he or she opts in. It would be preferable that actions proceed in Washington and Oregon in respect to the” U.S. defendants.

TSN’s Rick Westhead, who has covered this situation extensively, tweeted yesterday that it’s “worth noting players, either current or former, can join class action lawsuit in secret . . . (without) teams or league knowing they have done so.”

A similar lawsuit brought against the OHL and its teams got the go-ahead from Ontario Superior Court Justice Paul Perell on April 27. The OHL had a 20-day window in which it could appeal, something it chose not to do.

A court hearing involving a lawsuit against QMJHL teams is scheduled for next week in Montreal.

In his statement, Robison pointed out that “our position has been endorsed by governments in the majority of jurisdictions where WHL clubs are located. The provinces of Saskatchewan and British Columbia along with the State of Washington have adopted exemptions to their employment standards acts clarifying that WHL players are amateur athletes. The WHL expects all other provincial and state jurisdictions will also pass similar exemptions in the near future.”

The WHL lobbied heavily for such changes in those jurisdictions. In fact, on Oct. 26, columnist Ian Mulgrew of the Vancouver Sun reported right here:

“The Western Hockey League did not register as a lobbyist before leaning on B.C.’s cabinet to exempt major junior players from the minimum wage law, the provincial watchdog says.”

Erin Beatty, communications director for the B.C. Office of the Registrar of Lobbyists, told Mulgrew that the regulator now is “acting on the potential incident of non-compliance in this case.”

Rob Shaw of Postmedia had reported that, according to Mulgrew, “internal government records, obtained through a Freedom of Information request, indicated aggressive lobbying by the WHL with Premier Christy Clark and Labour Minister Shirley Bond.” Bond is the MLA for Prince George-Valemount.

According to Mulgrew, “It started with a meeting in March 2015. . . . Robison appealed for protection from a class-action lawsuit launched by current and former players seeking minimum wage, holiday pay and other damages from the for-profit league for violating labour standards.”

Mulgrew added: “The direct lobbying effort worked — cabinet quietly passed an order-in-council on Feb. 15, 2016 granting the league the exemption.”

On Thursday, Robison again made the claim that if teams are ordered to pay more to their players, franchises will be in jeopardy of folding.

“Any change to the status of our players as amateur athletes would have major implications to not only the WHL but amateur sport as a whole,” Robison said in the statement. “If WHL clubs were required to provide minimum wage, in addition to the benefits the players currently receive, the majority of our teams would not be in a position to continue operating.”

Robison’s claim means at least 12 of the WHL’s 22 teams would be in danger of collapsing.

——

The Regina Pats have acquired F Koby Morrisseau, 17, from the Spokane Chiefs for a fourth-round WHL

KOBY MORRISSEAU

bantam draft pick in 2019 or 2020. The deal also includes two conditional bantam draft picks.

The Pats also get a conditional fifth-round selection in the 2020 draft, while giving up a conditional third-rounder in 2020.

Morrisseau, who is from Grandview, Man., was the ninth-overall election in the 2015 bantam draft.

Last season, he had a goal and an assist in 22 games with Spokane. In his draft season, he had 39 goals and 22 assists in 30 games with the midget AAA Parkland Rangers of the Manitoba Midget Hockey League.

Morrisseau’s 2016-17 season was cut short by concussions.

He was injured on a check-from-behind during a game against the Portland Winterhawks on Sept. 3 in a preseason tournament in Everett and spent a night in hospital.

Morrisseau returned in time to start the regular season on Sept. 24, but left a Dec. 13 game against the Seattle Thunderbirds following a hard check from D Turner Ottenbreit.

On Jan. 9, the Chiefs announced that Morrisseau’s season was over and that he had been placed on the long-term injured reserve list.

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The injury-related trials and tribulations of Vancouver Giants F Tyler Benson have been detailed at length

TYLER BENSON

over the past couple of seasons. However, not until seeing an Edmonton Sun on Wednesday while in Jasper, Alta., was I aware that Benson had undergone surgery for a sports hernia last season. Postmedia’s Jim Matheson, a Hockey Hall of Famer who covers the NHL’s Edmonton Oilers, reported that Benson “had surgery to repair (a sports hernia) late this past season.” As Matty added, Benson has “had a cyst on his spine and osteitis pubis, along with the sports hernia, and had a shoulder injury he brought to camp last fall, which ended his chances to play exhibition games.” . . . Benson, who is from Edmonton, was a second-round pick by the Oilers in the NHL’s 2016 draft. He apparently has finished his rehab from surgery and is expected to attend the Oilers’ prospects came in Jasper sometime after next weekend’s 2017 draft. . . . Benson, 19, has played only 63 games with Vancouver over the past two seasons, but has put up 70 points, including 20 goals. The Giants selected him with the first overall pick of the WHL’s 2013 bantam draft.

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The Seattle Thunderbirds have signed D Luke Bateman, who was a fourth-round pick in the WHL’s 2017 bantam draft. From Kamloops, Bateman won’t turn 15 until Sept. 9. Last season, he had three goals and 23 assists with the bantam AAA Kamloops Jr. Blazers.

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The arena in which the Seattle Thunderbirds, the reigning WHL champions, play their home games is soon to undergo a bit of a name change. The facility that has been the ShoWare Center since it opened in 2009 will become the access ShoWare Center in the fall. . . . Steve Hunter of the Kent Reporter writes: “England-based access (which used the small letter for its name, which is Italian for access or admission) bought in 2014 California-based VisionOne, Inc., which owned ShoWare.” . . . Hunter reported that “the owners of access agreed to pay $3 million to get the naming rights for 10 years.” . . . The Thunderbirds, as the main tenant, get $50,000 per year under the terms of the naming rights deal. . . . Hunter’s story is right here.

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If you’re a regular here, and even you aren’t, feel free to contribute to the feeding of the Drinnan family by making a donation to the cause. You are able to do so by clicking on the DONATE button and going from there.

BTW, if you want to contact me with some information or just feel like commenting on something, you may email me at greggdrinnan@gmail.com.

I’m also on Twitter (@gdrinnan).

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Trevor Letowski is the new head coach of the OHL’s Windsor Spitfires, the reigning Memorial Cup champions. Letowski takes over from Rocky Thompson, now the head coach of the AHL’s Chicago Wolves. . . . Letowski, 40, has been Windsor’s associate coach for the past six seasons. Prior to that, he spent six seasons on the coaching staff of the Sarnia Sting.

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Mike Vellucci is the new head coach of the Charlotte Checkers, the AHL affiliate of the NHL’s Carolina Hurricanes. Vellucci has been an assistant GM with the Hurricanes through four seasons and will continue in that role, too. . . . With the Checkers, he replaces Ulf Samuelsson, who left after one season to join the Chicago Blackhawks as an assistant coach. . . . Vellucci hasn’t coached since 2012-13 when he was the OHL’s coach of the year while with the Plymouth Whalers. He spent 14 seasons with the Whalers. 

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More financials available in Calgary court . . . WHL playoff scenario . . . Coaching change in MJHL

Unsealed documents relating to the financial statements of OHL and WHL teams were made available in Alberta Court of Queen’s Bench in Calgary on Monday.

Justice Robert Hall had ordered the teams to file statements with the court, then he chose to unseal them.

It’s all part of an attempt by more than 400 former and present CHL players to gain certification for a class-action lawsuit that asks that major junior teams be ordered to pay minimum wage and other benefits.

There are 42 teams in the OHL (20) and WHL (22) and 41 of them presented financial statements and tax returns to the court, as requested. TSN senior reporter Rick Westhead reported that only the Portland Winterhawks chose not to “despite a court order to do so.”

Westhead reported that Ted Charney, a lawyer for the plaintiffs, “said he is not continuing his pursuit of Portland’s finances. It’s unclear whether the judge will sanction the Winterhawks for their failure to produce documents.”

In a report on TSN’s SportsCentre, Westhead revealed that five WHL teams claimed more than $4 million in revenue in fiscal 2016 (July 1, 2015 through June 30, 2016), with three of those reporting a loss.

The Edmonton Oil Kings had revenues of $6.6 million, with a $1.4-million profit. The Kelowna Rockets, with $4.7 million in revenues, had a profit of $185,216.

The Red Deer Rebels, who showed revenues of $4.5 million, reported a loss of $1,245. The Calgary Hitmen, with revenues of $4.3 million, claimed a loss of $387,333. The Vancouver Giants reported revenues of $4.3 million and a loss of $725,0414.

In a story on TSN’s website, Westhead reported the Seattle Thunderbirds led the WHL for that fiscal period with Cdn$7.3 million in revenues. It’s not know whether they reported a profit or a loss.

However, there seems to be little in the way of specific information available on the expenses of any of the WHL teams.

The Rebels, for example, paid out $1.5 million in management fees while reporting that $1,245 loss. There is no information available as to what constitutes management fees or to whom those fees were paid.

In the OHL, Westhead reports, the Niagara IceDogs “paid $300,000 in dividends to their owners in 2016 and spent $649,688 on wages and benefits for their hockey department, the team reported. Another $415,980 was spent on wages and benefits for other club staff. The statements, however, do not disclose the names of the team’s employees or their salaries.”

After going over the IceDogs’ statements, Nick Angellotti of Toronto-based Williams & Partners Forensic Accountants Inc., told Westhead:

“One question is how much of those wages and benefits went to the owner or other people close to the owner and what did they do to earn that money.

“The owner of a company like this has absolute discretion. They can pay themselves and others whatever they want. I wouldn’t say there’s no accountability; I would say there’s no disclosure of who got paid what.”

Al Rosen of Rosen & Associates Ltd., another forensic accounting firm from Toronto, looked at the London Knights’ statements, then told Westhead: 

“It’s impossible to learn anything meaningful from the Knights’ records. They’re useless. They bundle everything into revenue without any explanations. We have no clue what they are including as revenue, and what they are not.”

It seems that most teams don’t have their books undergo a forensic audit, likely for financial reasons.

“Without an audit, it’s impossible for these teams to rely on these statements as evidence that they can’t pay players,” Rosen told Westhead. “There’s no way to tell where any of the money is going.”

Westhead’s complete story is right here.

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A LOOK AT THE WHL PLAYOFF SCENARIOS . . .

Western Conference

The Everett Silvertips lead the conference by one point over the Prince George Cougars and hold three games in hand. In the U.S. Division, Everett is one point ahead of the Seattle Thunderbirds with two games in hand. . . . Right now, you’re looking at Everett meeting the Portland Winterhawks, who hold down the second-wild card spot, in the first round, while Prince George would get the Victoria Royals. . . . The 2-3 match-ups would have the Kamloops Blazers meeting the Kelowna Rockets and Seattle going against the Tri-City Americans.

NOTES: This conference is far from settled. Prince George holds a five-point lead over Kamloops, with each team having eight games remaining. They will meet four times, starting with a Friday-Saturday doubleheader in Prince George. . . . Seattle beat visiting Everett 6-1 on Sunday to get within one point of the Silvertips. They will clash twice more this season. . . . Portland, with 10 games left, is seven points behind Victoria in the wild-card race and trails third-place Tri-City by 11 in the U.S. Division. It will be tough for the Winterhawks to move up, but they do play three in a row against the Vancouver Giants this week. The Giants will miss the playoffs for a third straight season. . . . The Spokane Chiefs are nine points out of a playoff spot with 11 games remaining, so they’re up against it.

—

Eastern Conference

The Regina Pats lead the conference by seven points over the Medicine Hat Tigers and have two games in hand. The Pats have a hectic schedule and have been choosing rest over practices. . . . Regina appears headed for a first-round meeting with Calgary or Saskatoon, the Hitmen holding a two-point edge on the Blades with a game in hand. . . . The Tigers lead the Central Division by six points over the Lethbridge Hurricanes, who have a game in hand. They’ll go home-and-home to close out the regular season. . . . But right now it’s looking like the Tigers will draw the defending-champion Brandon Wheat Kings in the first round. The Wheat Kings will play their first-round home games in Dauphin with the Royal Manitoba Winter Fair taking over the Keystone Centre complex. . . . That would put Lethbridge against Red Deer or Calgary — the Rebels are third, four points ahead of the Hitmen, who have two games in hand. They only will play each other once more, that on March 15 in Red Deer. If it comes down to the final weekend, Calgary goes home-and-home with the Kootenay Ice, while Red Deer does the same with the Edmonton Oil Kings. Neither the Ice nor Oil Kings will qualify for the playoffs. The Oil Kings haven’t been mathematically eliminated, but they have lost six straight (0-5-1) and are 11 points behind Saskatoon. . . . In the East Division, the second-place Moose Jaw Warriors are headed for a first-round clash with the third-place Swift Current Broncos. The Warriors hold a 3-1-0 edge in the season series and have outscored the Broncos, 13-11. They will finish the regular-season with a home-and-home series.

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The MJHL’s Swan Valley Stampeders fired Erik Petersen, their general manager and head coach, on Monday. Petersen was in his fourth season as GM/head coach of the team that is based in Swan River, Man. Before taking over the Stampeders, the native of Dauphin, Man., had played for Herning IK in Denmark; he also coached in Denmark for 10 seasons, a lot of it at the national junior team level. . . . The Stampeders were 19-33-5 and in eighth-place in the 11-team league when the move was made. . . . Assistant coach Darren Webster has taken over as interim head. . . . Petersen is the father of G Lasse Petersen, who is with the WHL’s Red Deer Rebels.

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If you have some information you would like to share or just a general comment, feel free to email me at greggdrinnan@gmail.com.

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Thank you @tigershockey for the most memorable night! It meant more than you will ever know to see my dads number retired to the rafters! pic.twitter.com/IL3YVP9v1K

— Jessie Lysiak Braun (@ChefJessieLB) February 27, 2017

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MONDAY’S GAMES:

No Games Scheduled.

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TUESDAY’S GAMES (all times local):

Lethbridge at Regina, 7 p.m.

Brandon at Swift Current, 7 p.m.

There has never been a subscription fee for this blog, but if you enjoy stopping by here, why not consider donating to the cause? Just click HERE. . . and thank you very much.

WHL in court: More facts and figures from big business of junior hockey

F J.T. Barnett (Vancouver, Kamloops, Everett, Kelowna, 2008-13) has signed a contract for the rest of this season with Timrå (Sweden, Allsvenskan). This season, he was pointless in one game with CSKA Moscow (Russia, KHL), had seven goals and three assists in 24 games with Zvezda Chekhov (Russia, Vysshaya Liga, CSKA farm team), and was pointless in three games with Amur Khabarovsk (Russia, KHL). . . . He was traded by CSKA to Amur on Dec. 13, then released by Amur on Jan 30.

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I was wrong — oh, was I! — when I wrote earlier in the week that the biggest story involving the WHL over the next while would involve the future of the Kootenay Ice in Cranbrook and the City of Nanaimo’s desire to build a new arena.

No . . . no . . . no!

The biggest story — and it’s huge — continues to unfold in a Calgary courtroom.

If you’re late to this, about 400 present and former major junior hockey players are seeking certification for a class-action lawsuit that, if successful, would result in WHL and OHL teams, which operate under

the CHL umbrella, having to pay minimum wage and assorted other benefits such as vacation pay.

This week, lawyers have been arguing both sides in a Calgary courtroom. Early on, Justice Robert Hall ordered the unsealing of financial statements and tax returns once certain personal information has been redacted, a process that now is underway.

In the meantime, some information is starting to trickle out.

On Thursday, we got our first glance at a tax-related document when Justice Hall gave permission for the media to look at and report on the Portland Winterhawks’ tax return for the period June 1, 2015 to May 31, 2016.

For that period, the Winterhawks declared gross revenues of US$5,657,050 and a net loss of $191,955, numbers that didn’t sit well with Ted Charney, a lawyer representing the players in this case.

Charney on Winterhawks: “A team with $5.6 million in gross revenue… that still ended up with a taxable loss of $191,000. (cont.)

— Rick Westhead (@rwesthead) February 9, 2017

“This is said to be the proof by KPMG that this is a team that is losing money and cannot afford to pay minimum wage to players."

— Rick Westhead (@rwesthead) February 9, 2017

According to the Form 1120 filed by the Winterhawks, they paid $382,568 in “compensation of officers” and $1,737,330 in salaries and wages. All told, $771,409 was paid in rent and $1,671,881 went to “other deductions,” for which there isn’t an explanation provided.

Total deductions added up to $5,607,710, leaving that net loss of $191,995.

According to the WHL’s attendance report for 2015,16, the Winterhawks drew 252,124 fans to 36 home games, an average of 7,004 per game. Only the Calgary Hitmen, at 8,217, had a higher average attendance.

Late last year, Justice Hall ordered teams to produce financials and tax returns for five years, starting with 2011.

In 2014,15, Portland’s average attendance was 6,980, while it was 7,329 in 2013-14, 6,687 for 2012-13, and 6,075 for 2011-12.

We haven’t yet seen earlier tax returns, but according to a report for the plaintiffs by forensic accountant Ronald Smith, the Winterhawks, under “compensation of officers,” paid out $263,025 in 2012, $292,375 in 2013, $354,781 in 2014 and $393,468 in 2015.

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Included in the same Ronald Smith-prepared chart that contained Portland’s “compensation of officers” were annual “management fees” paid by the Red Deer Rebels.

According to this chart, the Rebels, starting in 2012 and running through 2016, paid “management fees” of $652,600, $400,000, $700,000, $725,000 and $1,490,000, respectively.

Smith wrote: “Based on the large increase in the fiscal 2016 management fees, it appears that a significant portion of those management fees may be a distribution of profit.”

Red Deer management — the franchise is owned by Brent Sutter, who also is the team’s general manager and head coach — hasn’t commented.

As you'd expect, the Rebels say they will not be commenting on the ongoing lawsuit involving the CHL and its clubs #RedDeer #WHL

— Troy Gillard (@Troy_Gillard) February 9, 2017

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Rick Westhead, a senior correspondent for TSN, was tweeting again (@rwesthead) Thursday. Here are a few:

Justice Robert Hall tells CHL lawyers not to delay process of reviewing financials. Hall: “The press is a hungry machine."

— Rick Westhead (@rwesthead) February 9, 2017

CHL lawyer Patricia Jackson reiterates to court that if teams are required to pay players minimum wage, “other benefits will be sacrificed."

— Rick Westhead (@rwesthead) February 9, 2017

Charney: WHL’s Edmonton Oil Kings spent $281K in yr on promotional meals. (Not for players.) “That alone would go … to paying min wage."

— Rick Westhead (@rwesthead) February 9, 2017

Charney: Paying players min wage would cost WHL $6M a year. League made $88M in revenue in 2016. “Surely there’s a way to figure that out."

— Rick Westhead (@rwesthead) February 9, 2017

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After perusing all of these numbers and more, Ken Campbell of The Hockey News wrote:

“We’re beginning to see why the Canadian Hockey League was so desperate to keep the details of its financial situation away from the prying eyes of the media and public. But if you’re going to pay the vast majority of your employees poverty wages, you’re also going to have to justify it by opening your books for all to see.

“And what we’re seeing so far doesn’t look great for the CHL.”

As all of this continues to unfold in that Calgary courtroom — it had been hoped things would wrap up today (Friday), but they now are expected to run through Wednesday and perhaps longer — people are learning that major junior hockey is big business.

“In the coming days,” Campbell wrote, “we’re about to find out that there is some big money out there in junior hockey and not much of it is going to the players. We’re going to learn that teams are paying their non-playing employees hundreds of thousands of dollars, even more than a million dollars, while many of the players earn $50 a week. For most teams, the amount they pay in salaries and benefits to non-players dwarfs the entire expense budget (which includes equipment, travel and scholarships), and in many cases is double the entire amount they spend on players.”

There was some interesting news involving the Kelowna Rockets, too, as Campbell pointed out that Smith’s report indicates the Rockets “have a wholly-owned subsidiary that provides the team with bussing services, which means transportation costs are being paid to a company that the Rockets already own.”

Smith wrote: “We do not know if the subsidiary is profitable or not.”

In the coming days, we are going to learn that nothing is cut and dried about any of this business. The more we hear and read, the more we realize that major junior hockey is a large, multi-faceted business with a whole lot of layers. What you are seeing when you walk into an arena and the puck is dropped is only the tip of the iceberg.

Campbell’s complete piece is right here.

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If you have some information you would like to share or just a general comment, feel free to email me at greggdrinnan@gmail.com.

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JUST NOTES:

The Prince Albert Raiders have lost F Jordy Stallard, 19, for the rest of this season after he underwent shoulder surgery on Monday. The Brandon native is at home recovering. . . . Jeff D’Andrea of paNOW reports that the Raiders have more injury issues, too. “Rookie Carson Miller missed Wednesday’s 3-2 defeat to the Medicine Hat Tigers,” D’Andrea wrote, “and will be evaluated for a shoulder injury on Friday. Drew Warkentine was withdrawn from Wednesday’s game due to a lower body injury.” . . .

Meanwhile, the Saskatoon Blades have one forward ready to return from injury, with another close to getting back in the lineup. F Mason McCarty has missed 27 games with a knee injury but should play tonight against the visiting Moose Jaw Warriors. McCarty had 14 goals and nine assists in 26 games when he was injured on Nov. 25. . . . Meanwhile, F Markson Bechtold, who was injured in his third game after being acquired from the Spokane Chiefs, is close to returning but isn’t expected to play tonight. . . . However, Ryan Flaherty of Global-TV in Saskatoon tweeted Thursday that F Caleb Fantillo was “hurt at practice today. Blades back down to 19 skaters.” . . . 

F Michael Rasmussen, a 32-goal scorer and a projected first-round selection in the NHL’s 2017 draft, has an undisclosed injury and isn’t expected to play tonight against the host Seattle Thunderbirds and may also miss Saturday’s game in Spokane against the Chiefs. . . .

The Vancouver Giants, coming off a 3-2 shootout victory over the Cougars in Prince George on Wednesday, are scheduled to meet the Rockets in Kelowna tonight. The Rockets have beaten the Giants in each of their last 21 meetings in Kelowna, going back to March 19, 2011. . . . The Rockets likely will be a little ornery, having lost 6-0 to the host Kamloops Blazers on Wednesday.

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THURSDAY GAMES:

No Games Scheduled.

——

FRIDAY’S GAMES (all times local):

Everett at Brandon, 7:30 p.m.

Medicine Hat at Calgary, 7 p.m.

Regina at Edmonton, 7 p.m.

Vancouver at Kelowna, 7:05 p.m.

Prince Albert at Lethbridge, 7 p.m.

Spokane at Portland, 7 p.m.

Swift Current at Red Deer, 7 p.m.

Moose Jaw at Saskatoon, 7:05 p.m.

Tri-City vs. Seattle, at Kent, Wash., 7:35 p.m.

Kamloops at Victoria, 7:05 p.m.

There has never been a subscription fee for this blog, but if you enjoy stopping by here, why not consider donating to the cause? Just click HERE. . . and thank you very much.

WHL in court: It's about financial figures, statements, management fees, bonuses, sale prices . . .

“Two new reports filed in a Calgary court this week raise questions about the bookkeeping of Canadian Hockey League clubs and the CHL’s claim that many of its teams can’t afford to pay their players at least minimum wage,” Rick Westhead, a senior correspondent with TSN, reported on Wednesday.

Westhead has been on top of this story from the beginning and his latest piece is right here. If you are interested in this story, you are able to follow Westhead on Twitter (@rwesthead) and his stories are at tsn.ca.

More than 370 present and former OHL and WHL players have filed lawsuits in Ontario and Alberta as they seek to gain certification for a class-action lawsuit that would force the teams to pay players minimum wage and other benefits.

In a Calgary court room on Tuesday, Justice Robert Hall ordered the unsealing of financial statements and tax returns that had been handed over at his order. Also unsealed was what is known in the business as the pro-junior agreement, the contract between the NHL and the CHL, the umbrella organization under which the OHL and WHL, and the QMJHL, continue to operate. With the lawsuit having been filed in Toronto and Calgary, the QMJHL hasn’t been targeted.

The NHL-CHL agreement under which the parties now operate is of seven years in duration and is to run through the 2019-20 season. Westhead details terms of the deal under which the NHL provided a $7.6-million grant for 2013-14, a figure that will grow to $12.6 million for 2019-20. The deal also calls for the NHL to pay various other fees, including $775,000 towards officiating. All of that is included in Westhead’s story.

On Wednesday, Westhead also reported:

“One report, filed in an Alberta Court of Queen’s Bench on Monday and unsealed late Tuesday, provides an alternate perspective into the industry of major junior hockey. Written by Toronto forensic accountant Ronald Smith, the report provides details about recent team sales. Smith makes the case that clubs that lose money each year still sell for millions of dollars.

In CHL case, report of forensic accountant Ronald Smith (plaintiff expert witness) breaks out recent WHL, OHL team sale prices. pic.twitter.com/JeE0aDJ2VF

— Rick Westhead (@rwesthead) February 8, 2017

“The Prince George Cougars, for example, lost money three years in a row between 2012 and 2014 but still sold for $6.4 million in 2015. Similarly, after losing $212,902 in 2014, the Hamilton Bulldogs sold for $10.3 million in 2015.

“The Regina Pats sold for $6.8 million and the Sarnia Sting sold for $7.7 million, both in 2015. The Erie Otters in 2016 sold for $8.4 million (U.S.).

According to Smith, “Teams were sold for substantial amounts, notwithstanding that the teams earned small profits or incurred small to large losses for the most part.”

Smith also pointed out in his report that some WHL teams had revenue from fund-raising events that wasn’t included in financial statements.

Westhead reported:

“The Saskatoon Blades, for instance, through a non-profit entity that holds raffles and other fundraising events, had $790,558 in an account in 2016 that was allegedly not reflected in the team’s financial statements.

“Smith wrote that the WHL’s Edmonton Oil Kings generated $860,938 in 2013, $1,357,503 in 2014, and $1,155,772 in 2016 from concerts and other events, but said the team reported no such revenue in 2012 or 2015.”

We also learned on Tuesday that teams pay out management fees and bonuses.

Can CHL teams afford to pay players? Players’ lawyers say this chart shows teams paying their corp officers & directors well. (Smith report) pic.twitter.com/N74oBS58o8

— Rick Westhead (@rwesthead) February 8, 2017

As well, Smith pointed out that, according to Westhead, “information from tax returns aren’t enough to offer a clear view of a team’s profitability.”

Westhead writes that the Portland Winterhawks’ 2015 U.S. corporate tax return shows US$5.4 million in income with a loss of $191,995.

That return includes a deduction for $1.7 million, but there aren’t any details included.

A report written by Kevin Mongeon, an assistant professor of sport management at Brock U, was filed in court on Wednesday. He studied OHL and WHL financial documents for the past few weeks and reported that the KPMG analysis commissioner by the CHL “does not substantiate the claims of widespread financial distress” among teams.

“The defendants . . . have argued that player pay will alter or force clubs to cease operations,” Mongeon wrote. “There is no economic evidence to support this claim.”

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