Marleau testified that the Maple Leafs coach told him that the tax cap on signing bonuses is used to get people to come play in Toronto
In the multi-million-dollar tax trial about the word “inducement” and how it relates to income tax on professional hockey contracts, former NHL superstar Patrick Marleau’s use of the word “entice” made ears prick up Wednesday morning in the downtown Toronto courtroom.
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“Enticing” someone sounds like “inducing” them to do something, on the face of it. So when Marleau testified about negotiating a three-year contract with the Toronto Maple Leafs in 2017 that would see him leave the San Jose Sharks after two decades, and how then Leafs coach Mike Babcock said one of the ways they “entice” elite players like him to sign deals was a cross-border tax break spelled out in a treaty, his legal team were suddenly metaphorically on the power play.
A few minutes later, Marleau drove the point home. He testified that after he signed this deal with Toronto, and was having dinner with team leadership, Babcock again told him that this tax cap on signing bonuses for athletes is well known as “a lever that teams are able to use to get people to come play in Toronto.”
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Marleau, according to his testimony, was a prime example of how this worked. Signing with the Leafs as a free agent was “a chance to cash in on all the hard work you’ve done throughout your career,” Marleau testified. It also paid most of its value as a signing bonus, including two payments of $3.5 million in the first year, as a rare perk to make sure he gets the most money as soon as possible. A signing bonus is also protected against lockout and buyout in a way salary is not.
