Taxes, insurance, and poor salary prospects deter NHL players from Finnish League

Insurance alone could cost EUR 50,000 a season

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The Finnish Hockey League, the country’s elite series in the sport, appears not to be in the best of health. There are plenty of empty spaces in the ice-halls on match nights, and the public who do turn up are wondering why it is that there aren’t dozens of returnee NHL players out there, considering the lock-out that is in progress over the Atlantic. The principal reason for their non-arrival looks to be money.
      The Finnish tax authorities would give the players a break if the NHL professionals were to play in Finland for less than six months. If their time here goes beyond that (and the prospects at the moment are that the NHL lock-out could last all season) , then things get appreciably tougher tax-wise.
      A bigger obstacle than the potential tax-burden, however, is the combination of high insurance premiums and modest salary potential.
     
Consider the example of Swede Michael Nylander, who is the first highly-paid NHL star to come to Finland. The 32-year-old will be donning a Kärpät jersey next week, but in addition to the Oulu club, JYP of Jyväskylä would have liked to sign their former import for the season.
      Nylander’s salary for the time he is with Kärpät will probably run to hundreds of thousands of euros, but simply the man’s insurance premiums are enough to make small clubs weak at the knees: he announced to JYP that his insurance would cost USD 60,000, or around EUR 50,000.
     
JYP sought to get Nylander’s services to the very end. The Swede had played with the club during the last NHL lock-out in 1994-95. However, the offer made by Kärpät of Oulu was more favourable this time.
      Nylander had called Jyväskylä in person and had negotiated without an agent as an intermediary. The JYP executive manager Jukka Seppänen freely confessed that their offer had been more from the heart than the head, with an ample dose of nostalgia for the previous occasion when Nylander had played for them. Seppänen admitted that there was no way they could have recouped the necessary sums of money in shirt-sales, season tickets, and increased attendance figures alone.
      The price of a player’s insurance is the result of several factors, including the length of the player’s contract, his age, the size of his salary, and so on. Nylander, for instance, signed a 3-year contract with the New York Rangers in August, worth USD 7.3 million.
     
Reportedly Kärpät will pick up EUR 20,000 of the insurance tab for Nylander, and he will pay the rest. Kärpät are the defending Finnish Champions, and the club has a relatively large budget, but they were able to remain inside the walls of their spending plan only by simultaneously terminating a contract with a Czech player on the roster.
      HIFK of Helsinki have secured the services of two players from the NHL, Marek Zidlicky and Jarkko Ruutu. Ruutu is believed to have asked for EUR 200,000 for his stint, but this has not been confirmed by HIFK sources.
      Few Finnish League teams can afford the huge insurance payments, let alone the salary demands of the temporarily available NHL stars.
     
Many had eagerly anticipated a rush of Finnish stars "coming home" for the duration. A good many of the foreign players in the NHL have in fact elected to come back to Europe, but their destinations have predominantly been the Czech Republic, Sweden, and Russia.
      Hopes that the likes of Saku Koivu (a former TPS Turku player) or Olli Jokinen (formerly of KalPa Kuopio and HIFK Helsinki) would be gracing the ice here seem somewhat unlikely to materialise at present.
     
One former big-spending club, Helsinki Jokerit, is now reporting pointedly that they have steered clear of securing expensive imports from North America. And Jokerit can afford to be smug about it: they are currently leading the table, with a 100% record after five matches. They host title-holders Kärpät in a big game in Helsinki tonight.


Links:
  Finnish Ice Hockey League (in Finnish)
  Europe welcomes locked out NHL players (CBS Sportsline, 21.9.2004)

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