WHL’s financial numbers don’t add up: lawyers
Financial numbers divulged by Western Hockey League teams failed to show the clubs can’t afford to pay players a minimum wage, lawyers behind a possible class action suit testified Thursday.
They said disclosures of data were at times incomplete, some lacked sufficient detail and in other instances cast clear doubt on the teams’ insistence paying players would bankrupt them.
“From the Portland Winter Hawks, all we received were two tax returns. We don’t have financial statements,” lawyer Ted Charney said.
One of tax returns from the WHL club listed total income of just over $5.4 million and taxable income of negative $192,000. Charney questioned many of the listed expenses.
One detailing $382,000 in payments to team officers “is a good example of an expense not to justify paying the minimum wage,” Charney said.
Charney argued it would cost each team about $300,000 a year to provide players a minimum wage.
The lawyers are waging a $180-million suit, naming the WHL, the Ontario Hockey League and the Quebec Major Junior Hockey League, their respective clubs and the parent Canadian Hockey League.
But the players must first certify a class action, which their lawyers say has attracted the interest of more than 400 former and current CHL athletes.
The leagues and their teams say paying a wage would bankrupt some clubs, a third of which they contend lose money. They also argue teams pay millions a year for players’ scholarships and serve to prepare them for the NHL.
But Charney said other records provided in a report prepared by Smith Forensics cast doubt on the argument that teams can’t afford to compensate players beyond a weekly stipend that typically amounts to $60 a week.
The Prince George Cougars claim losses of $620,000 in 2012 and $760,000 in 2014, yet the team was sold in 2014 for $6.4 million.
“There doesn’t seem to be a correlation between losing money and the value of the teams,” Charney said.
The certification hearing is expected to conclude next Wednesday.